Why do my cable TV rates go up each year?
- Date: April 16, 2019
- Author: Troy Radermacher - Accounting & Business Manager
Do you get frustrated when you see your cable tv bill go up year after year? If you’re like most I’m sure the answer is yes. DRN feels the same way since cable tv is a service DRN offers to our cooperative members where we set our margins to breakeven at best. What that means is any extra costs we incur then need to be passed onto the consumer year after year.
Your monthly bill has two major components which are programming costs and costs to provide service. Programing costs are fees the cooperative pays to a programmer for every household that receives a certain channel whether that person watches the channel or not. These fees account for the bulk of your monthly bill. Costs to provide service are fees associated with maintaining and upgrading our network infrastructure to receive and deliver content to our subscribers along with normal business expenses like employee salaries and utilities.
So why do programming fees make up the majority of your bill? It all started because the government wanted everyone to have access to local television news and information. The agreement was broadcasters could have free use of the American Airwaves if they provided communities with free programming. To make money, broadcasters could charge others for commercials. Over time, Congress wanted to strengthen local programming, so they passed laws that allowed broadcast stations to charge cable and satellite companies to carry their signal. That’s when big media conglomerates that own the stations and other networks became crafty. What these networks now do is bundle their popular channels along with their less popular channels, so they can charge a larger fee. One option is we could threaten to not carry the weaker channels, but the problem is 8 media companies control 90% of the networks carried so they can threaten to remove local stations or just don’t care if we leave since we’re just a small fish in the ocean and their loss of revenue has less of an impact than taking the service away from our members. Local broadcast fees for FOX, ABC, NBC and CBS combined have increased by 324% since 2014.
As you can see it’s not easy trying to keep rates down, but we try the best we can. To learn more, you can visit www.tvonmyside.com and you will get more information like I gave above. This group advocates for small independent cooperatives like us to keep rates lower. Ways our subscribers can help is to voice your concerns to our members of Congress and let them know programming costs are costing you too much.