Have you looked at your cable bill recently? Probably not — and that’s kind of what the cable industry is counting on.
“Just keep auto-paying your bill every month! Nothing to see here!” they scream from a fortified bunker 11 miles beneath the Earth.
But if you did examine your bill, you might find a confusing list of bundles, taxes and surcharges that somehow add up to way too much money for the privilege of watching “Better Call Saul.”
A few months ago, my own bill had crept higher than $200 for no reason I could discern, so I finally gathered all my courage, carved out a six-hour block and did the other thing the cable industry is really hoping you don’t do: I picked up the phone and called them.
After a lengthy round-and-round and a demand to eliminate some services, such as home phone, I got my costs down to a manageable $110.
But a few weeks later, I looked at my bill again, and it was back up — to more than $150.
And for what? The Ultimate 200 Upgrade for $20? Variety Pass for $7.67? A regulatory recovery fee?
What are these charges even about?
So I called again in an attempt to eliminate services to return my monthly cost to its previous level. My bill is itemized with a list of specific charges, so it stands to reason that if I wanted to get rid of something, my bill would fall by that specific amount.
Not so much.
“Let’s get rid of HBO,” I told the customer service person. “It says here I’m being charged $11.35 for that.”
Sure, I could lose HBO, I was told — except it would actually increase my bill by $2. This is not a joke. This is what they said.
If math like that makes sense, chances are you work for Time Warner Cable. It’s no wonder the nation’s cable giants are consistently ranked the most hated companies in the country.
According to the American Customer Satisfaction Index of some 14,000 people, pay TV is the most despised industry of the 43 the index covers — and Time Warner ranks dead last of all the cable companies when it comes to customer happiness. The thing is, the cable companies could probably take simple steps to foster goodwill — they just don’t seem all that interested.
How about starting by simplifying pricing? Pay TV billing practices are among the fastest-growing complaints to the Federal Trade Commission. Missouri Sen. Claire McCaskill, one of the outspoken critics of the cable industry, has called the billing “confusing” and “deceptive.”
This is because much of what the cable industry thrives on is so-called promotional pricing.
“The cable companies have these ridiculous promotional pricing structures where they’ll get you in at one price, then suddenly your bill will jump 20 percent or more when the promotion ends,” says Linda Sherry, director of national priorities for Consumer Action, an advocacy group. “This isn’t the way things should work.”
Remember when dropping HBO was going to cost me $2 more? A Time Warner Cable spokesperson says, “I suspect you might be in a promotional plan where we’re providing more value to you.”
That value, if it exists, is hardly apparent. Cable TV prices — which generally have risen much faster than the rate of inflation — aren’t transparent. We all know roughly how much, say, a quart of milk should be, based on how much it costs to produce one and by figuring out an average across many stores.
But for cable? No idea.
“The true cost is completely non-transparent,” adds Sherry, who recommends signing petitions or contacting your representatives to complain about cable pricing. “They have an awful lot of wiggle room in the prices.”
Regardless of the price, the cable companies are probably making out OK. One analysis of Time Warner’s publicly released financial information found that the cable giant was making a 74 percent profit on home phone service and a staggering 97 percent margin on Internet service.
These margin calculations aren’t perfect and ignore some costs, but still — 97 percent? No wonder the customer service rep magically finds a $5 off coupon every time I call to complain.
You’re also being charged to rent equipment. On my bill, it’s $11.25 for a set-top box and $8 for a modem every single month. That’s like a restaurant adding a “silverware borrowing surcharge” to your check.
And what’s especially galling is that you’re also paying for a ton of stuff you’re not even using. The cable industry thrives on bundle pricing, in which customers are forced to pay for dozens — or even hundreds — of channels they never even asked for.
According to Nielsen, the average cable customer watches just 17 channels. Despite those limited viewing habits, from 1995 to 2005 the number of channels in the average cable bundle doubled in size.
Each of these networks charges a fee to the cable company — meaning you’re left shelling out cash for whatever not-must-see programming is on (looking at my bill here) Aspire, Youtoo America and Pivot.
In the industry’s defense, it’s contractually obligated to bundle certain channels. Some providers, including Verizon and Charter Communications (which is in the process of acquiring Time Warner Cable), are interested in creating so-called “skinny bundles” consisting of fewer channels, but the effort has been stymied by the networks, most prominently Disney.
The House of Mouse owns lucrative ESPN, for which each subscriber ponies up an astonishing $6.04 per month, according to the Wall Street Journal. (TNT, the second most costly network, pulls up the rear at $1.48 per month.)
Time Warner Cable spokesman Eric Mangan says some consumer dissatisfaction with the industry is driven by the high cost of programming.
“Broadcast and sports programming costs are by far the biggest drivers of higher TV prices,” he says. “Our fees paid to local broadcast channels have soared 60 percent the past two years alone, and the cost of cable sports networks has increased 91 percent since 2008.”
(Much of that increase, however, can be blamed on regional sports networks — some of which are owned by the cable companies. In 2013, for example, the Dodgers partnered with Time Warner Cable on a $7 billion deal to launch SportsNet LA.)
Mangan also says customer service has improved. That old bugaboo of four-hour appointment windows for repairs has been whittled to one.
“Consumer perceptions take time to catch up to reality,” he says of the industry’s hated standing. “Customers often need multiple positive experiences, over time, before their impressions change.”
For the industry’s sake, here’s hoping it changes in a hurry. With all the cord-cutting going on, there might not be anyone left to hand over 72 cents a month to watch “America’s Next Weatherman” on TBS.