It’s become a cliche: “Why am I forced to buy more cable channels I never watch?”
Now, new data show the common consumer complaint is true.
Last year, U.S. cable subscribers got a record average of 189 channels in prepackaged bundles but watched only 17 of those channels, according to a report this week by Nielsen. And the appetite to view more channels, even when offered vastly more television content, hasn’t changed much in years. In five years, cable companies added 60 more channels for the typical subscriber, but viewers haven’t increased their consumption of new content. They have consistently watched an average of 17 channels.
Consumers have long decried the cable bundle. Senator John McCain (R-Ariz.) and other lawmakers have tried and failed to break apart channel bundles forced on consumers with legislation that would allow consumers to pick programs a la carte. The average monthly cost of a cable television subscription is $90, and some analysts expect that to increase to $125 in a few years.
But the cable model is under siege, and the Nielsen report demonstrates how difficult it will be for the industry to keep consumers locked into subscriptions. Frustrated consumers are beginning to leave cable services for what they consider to be better options online. Netflix, Hulu and Youtube have struck crucial content deals with HBO,Walt Disney and other popular programmers for content once only available behind the cable TV wall.
The top two cable television providers — Comcast and Time Warner Cable — lost a combined 1.1 million subscribers last year, according to a report by the Leichtman Research Group. Netflix, meanwhile, has 35 million subscribers, 5 million more than Comcast.
Cable companies argue that bundling hundreds of channels is the only business model that allows consumers to afford some of the most popular programming, such as ESPN. The high licensing costs for ESPN, for instance, are spread across a cable firm’s subscriber base. Popular channels such as AMC and Bravo, meanwhile, would not have been discovered if they weren’t packaged in cable bundles, the firms say.
“This data is significant in that it substantiates the notion that more content does not necessarily equate to more channel consumption,” the Nielsen report said. “And that means quality is imperative — for both content creators and advertisers. So the best way to reach consumers in a world with myriad options is to be the best option.”