We’ve previously discussed cord-cutting, a phenomenon of questionable veracity even among tech bloggers such as yours truly. Many feel that cord-cutting is more of a tech blogger fad than an ongoing current in the tech wars. And they may be right, but not for the reasons they may think.
According to the Wall Street Journal, cable companies have started charging an up-front premium for going Internet-only:
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.
Cable operators “recognize that their most advantaged product is broadband,” said Craig Moffett, analyst at Sanford C. Bernstein. “They don’t want to sacrifice that advantage by giving the opportunity for customers to cherry pick their best product at a low price and take the rest of your services from somebody else. In effect, they are pricing the broadband at a price that discourages you from taking broadband only.”
In effect, they’re discussing the deals you see in bus shelters and on billboard: Get TV and Internet from one company, and save on the bundled price. The piece points out that these are promotional deals that last six months, which is true, but fails to note that they’re de-facto market prices, as all you really have to do is call, make vague noises about canceling your service and suddenly you’re right back at the price you wanted.
This raises, though, an interesting question: How many people have cable but don’t want it and essentially don’t use it?
It’s an important question because eventually, ratings systems are going to have to be updated to reflect technological progress and also reality. In fact, Microsoft has patented a method to do just that, among other things. So, what happens when cable channels discover that nobody’s watching them… and cable company investors discover their customers are haggling down prices for a product they don’t use and don’t want?