And they call it a “free” market! Hah, hah!
When Georgia-based medical student Cathy Vu called Comcast Corp. CMCSA +0.12% last month to cancel her TV service and keep just Internet, she got a shock. Taking the Internet alone would cost her more, not less, a month.
Assuming she wanted to keep the same Internet speed, her bill would rise by $20 a month from what she was already paying, Comcast told her. The 23-year-old, who says she watches video mostly online, decided there was no point in canceling TV.
Comcast: TV + Internet for about $50/month for the first 6 months vs. standalone samespeed Internet for about $70/month.
Verizon FiOS: TV + Internet for about $85/month (two-year contract) vs. standalone Internet for about $80/month.
Time Warner Cable: TV + Internet for about $50/month for 12 months vs. standalone Internet for about $45/month for 12 months.
*Offers available in select markets“People are pretty much forced into buying both services, and it just doesn’t make sense to me,” she said.
Comcast confirms the pricing strategy, saying it is more valuable for the cable operator to pursue customers who will take multiple services than “single play” customers.
Ms. Vu’s experience may shed light on a debate raging in the television industry in the past few years: whether the rising cost of cable TV and growing online video options are prompting people to cut the cord of pay TV. Quarterly subscriber numbers from pay-TV operators have done little to resolve the debate: in some periods, the industry as a whole has grown slightly, and in others, there has been a marginal decline in the number of cable TV subscribers.
Several pay-TV executives say that cord-cutting is still a small trend that has largely stemmed from weak economic conditions. But one little-discussed factor is cable operators’ pricing policies, which can prompt people to keep TV even if they don’t particularly want it.
