SAN FRANCISCO (CBS 5) – Increasing numbers of Americans are dropping cable and satellite television service, and the weak economy is to blame, according to the Associated Press.
People are complaining about the already high costs getting worse, not wanting to pay for channels they will not watch, and preferring to use streaming services such as Hulu or TV network websites.
According to the AP, nearly 200,000 people dumped cable and satellite between April and June. Eight of the nine top companies had losses, including AT&T, Dish Network, and DirecTV.
Experts say not only people are canceling subscriptions, but some are not even signing up in the first place.
According to the Federal Communications Commission, the 1995 average monthly cost of a cable bill was $22.35. By 2009 it rose to $52.37. DirecTV said their average is now $75—and the costs are going up.
The stagnant housing market may also play a role. Satellite and cable industry consultant Steve Effros said that people are moving home and consequently eliminating subscribers.
Effros says the rising costs can be chalked up to a ladder of costs that ultimately hits consumer wallets. For instance, Effros says, if a sports team increases the pay of the players, that costs goes from the league to the sports network to the cable operator and finally to the customer.
Some consumers say access to sporting events is worth the extra cost, since few online outlets provide live events. But for those who are not sports fans, internet TV is a growing alternative.
While Effros believes streaming online television is partially to blame, the biggest factor is the bad economy and people wanting to save money.
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