Television bundles are raising prices and ruining cord-cutting
Tired of yearly price hikes and poor customer service, cable and satellite subscribers in recent years cut the cord en masse. As an alternative, many choose an over-the-air internet television service. Unfortunately, these have slowly morphed into something very familiar — the cable service these folks had once dropped.
This week, YouTube TV and FuboTV both announced significant price hikes that could force many to rethink once again how to spend their home entertainment dollars. Unfortunately, a long-time industry trick almost certainly means none of the choices are ideal. You can either give up some of your favorite channels or suck it up and accept regular price hikes.
First introduced in early 2017, YouTube TV was among the last of the so-called over-the-air internet television services to launch in the United States. At launch, the Google service was priced at just $35 per month and included around 40 different channels, including all U.S. networks.
Since then, YouTube TV has steadily increased both the number of channels it offers and the monthly price. In March 2018, rates were increased by 25%. A year later, they rose again, this time by around 17%. On June 30, Google announced another price hike of 30%, while also announcing its number of channels has risen to over 85.
Today, instead of paying $35 per month, YouTube TV subscribers are being charged $65.
One day later, FuboTV also announced a price hike with its family bundle now priced at...$65 per month. Competitors like Sling TV and Hulu Live TV have also announced price hikes in recent months as the number of channels each offer has risen.
It's not the price hikes themselves that are the problem. Instead, it's why companies like Google must raise prices in the first place.
Just as they do with cable and satellite providers, industry forces continue to push an anti-consumer television bundle system. By doing so, customers must purchase channels they don't want alongside the few that they do. Further, as more of those channels get added, the higher the monthly price becomes.
Even at $65 per month, some would consider YouTube TV and similar services a bargain. For this, you get unlimited streaming and unlimited cloud storage across multiple devices. And yet, there's another cost to take into account. Even before one subscribes to an over-the-air internet television service, one has to pay for the internet itself. In large swaths of the United States, this means paying a monthly cable bill, regardless of where they get their television entertainment.
Put another way, each time a service like YouTube TV issues a price hike, the closer it's becoming more like a cable TV service. And as that happens, budget-conscious customers might get a better deal by sticking with cable and using it for both internet and traditional television services.
Some streaming advantages remain
All is not lost for over-the-air television services, however, as unique benefits remain.
First, unlike cable/satellite providers, there's no lengthy contract you need to sign. Instead, you can go back and forth between plans any time you want and even decide not to subscribe one or more months.
Second, internet streaming still requires far less equipment. To get online, you simply need a mesh network (or a router with a few access points) versus physical cable or a satellite dish outside.
No easy answer
For many years, rumors suggested Apple wanted to develop and release a physical television that would offer a la carte programming. Unfortunately, distribution power-brokers held firm and wouldn't give up on their reliance on television bundles. If Apple couldn't convince them to re-think their long-held strategy, perhaps no one can, short of government intervention. Until then, consumers should pick and choose wisely and not be afraid to change service plans regularly.
What do you think? Leave your comments below.
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Bryan M. Wolfe has written about technology for over a decade on various websites, including TechRadar, AppAdvice, and many more. Before this, he worked in the technology field across different industries, including healthcare and education. He’s currently iMore’s lead on all things Mac and macOS, although he also loves covering iPhone, iPad, and Apple Watch. Bryan enjoys watching his favorite sports teams, traveling, and driving around his teenage daughter to her latest stage show, audition, or school event in his spare time. He also keeps busy walking his black and white cocker spaniel, Izzy, and trying new coffees and liquid grapes.
Like you said, what is nice is not being locked into a contract. YTTV decided to raise their rates, and I dropped them the next day. Was simple and not a hassle like trying to cancel comcast cable. But yeah it is more of the same as with cable. Until the owners allow people to buy the channels they want, and not subsidize the channels they don't, prices will continue to rise and value will continue to diminish.
Personally I don’t watch any broadcast TV, I am fine with Apple, Netflix, and Hulu. It’s like the cable companies are trying to hold onto an era that is gone. A long time ago entertainment was out of the home with stage shows in night clubs, then we had the dawn of the TV and subsequently VHS and cable. Then came the couch potatoes and entertainment in the home. It may be me but I feel like aside from the epidemic we are going back to entertainment outside the home and what time we are now spending it in front of the proverbial TV while sitting on the couch is more limited in time and We do not spend as much time on as before. I see no reason or value in paying those type of prices for a service that is hardly used.
The amount of money cable companies have to pay for content is insane. I work for a small ISP/cable company and there is no way to break even. If you charged what was needed no one would sign up. We were at an industry convention a couple of years ago and one of the speakers (number cruncher) said that if the content providers kept going up on what they charged the cable companies, the industry would implode by 2023.
Well let them continue to be greedy and destroy themselves.
You are exactly right, the programmers have held the ax over cable systems for years. They know very well that our customers demanded to be able to watch ESPN so they could watch their favorite teams, so ESPN required that we carry a dozen other channels that NO ONE wanted to watch or cared about in order to be allowed to carry ESPN. So we had to acquiesce and go along with that demand and raise our prices in response, angering our customers in the process. The same happened with our local ABC affiliate, which was owned by Hearst-Argyle, so in order to be allowed to carry (and pay for) that local ABC affiliate, we were required to carry Lifetime, Lifetime Real Women, and Lifetime Movie network, and carry them on certain low channel numbers, which raised our costs again. We eventually said "Enough" and dropped ALL video services and switched to offering only internet service, and have never looked back. It was the smartest decision our company has ever made. Screw the programmers, they can bundle themselves into oblivion for all we care. YouTube TV is now going through that same process, being required to carry dozens of channels that viewers have no desire to watch, in order to carry a few that they do want to watch. Everything that goes around, comes around.
I started out a few years ago with AT&T U-Verse TV powered by AT&T GigaPower internet. Things were great until I got a bill that went from $140 for both to $220. I dropped the U-Verse TV making my internet bill $80/month and picked up DirectTV Now for $35/month (Got a free ATV 4K as well). Over the last couple years the DirectTV Now re-branded as AT&Tv Now has gone up to $65 but this last month AT&T decided my internet should now be $90/month. I called AT&T and decided to tell them to cancel all my AT&T services including my Cell Phone Plan that is unlimited with 9 phones and 2 watches on it. All of a sudden, "POOF" how about $60/month for internet? I said OK. Moral of the story? Call them kicking and screaming. They'll drop the price.
I've learned I don't need to keep paying more and more for just less. For what the content creators what. You can't get blood from a stone and i'm all bled out. Now I'll watch pluto for free, sling is still more reasonable for what I watch. YouTube for more personal content. For anything else I know where to look (Ahoy!). Previously I had DTVN and YTTV, both had their benefits. Now though with the constant price hikes those benefits have shriveled to nothing for me. So ill take my free year of TV+ then when it's over i'll see if it's worth what they'll be asking for. At the moment there really isn't anything that's worth it for me.
I saids for years that cord cutters would be in for a surprise if they thought a la carte tv was going to save them money or freedom. Bundling is away for the content providers to foist their meager offerings on people in exchange for guaranteed income.