As part of its At Issue written debate series, CQ Researcher asked TF’s Berin Szoka and Free Press’ Derek Turner, “Is the price for watching TV unfairly high?” Read both essays as printed, or check out Berin’s “no” argument below:
We live in a “golden age” of television, as The New York Times’ David Carr puts it: “The vast wasteland of television has been replaced by an excess of excellence.” We love TV, and it’s getting better all the time — but we hate paying for it, even when we’re getting a better deal.
Since 1996, the cable industry has invested $210 billion in infrastructure. That’s meant faster broadband, higher video quality and new TV features like DVRs and smarter interfaces. Adjusting for inflation, basic cable video prices rose 2.7% annually from 2005 to 2012.
But adjusting for quality is hard, so consider how much cable companies paid programmers during that period: 5.61% more annually. Indeed, programming costs, which have more than doubled since 1992, represented 56% of cable bills in 2012 — and are rising, largely due to the cost of sports programming.
Cable’s become just another distribution channel, watched by fewer than half of American households. Viewers have switched to satellite (a third), telco services like Verizon FiOS (15%), or entirely to online services like Netflix and iTunes (5%).
Studios are also investing in quality because they face unprecedented competition. The number of channels has exploded, from 565 in 2006 to over 800 today. Some of today’s most popular programming comes from once-stale channels like AMC (e.g., Breaking Bad and Mad Men). And new entrants like Netflix now offer enormously popular, original content like House of Cards.
Understandably, people hate paying for channels they don’t want. Yet economists have found that mandating a la carte pricing would raise prices per channel, perhaps costing consumers more overall while hurting new and smaller channels. Meanwhile, the availability online of individual episodes is pressuring video programmers to change how they do business. There’s no reason to think the market won’t find the right balance — without more government meddling.
In fact, government has increasingly helped to drive costs up, not down. Most egregiously, Americans shouldn’t have to pay for broadcast stations when they buy basic cable. Repealing other privileges for broadcasters might also help ensure that the prices distributors like cable pay for content reflect its value.
More broadband competition could help make Internet television viable. That means lowering local barriers that make it hard for companies such as Verizon and Google Fiber to compete with cable. But at the end of the day, no matter how it’s delivered, quality television costs money.