Charter Spectrum 'Competes' With New $20 Streaming TV Service Featuring $6 In Entirely Bogus Fees

Failures

from the the-illusion-of-competition dept

You may have noticed that things aren’t going particularly well for the traditional cable TV industry. Ratings for many channels are in free fall, the rate at which customers are cutting the traditional TV cord is accelerating, and the number and quality of competing streaming services is only growing. Cumulatively, this has forced many previously myopic cable and broadcast executives to stop denying the obvious and to candidly admit there’s an actual market (r)evolution afoot, even if most of them still aren’t quite exactly sure how to adapt to it.

And while the headlines are often filled with dire warnings about traditional cable TV being “doomed,” that’s not really true. Cable operators still lay claim to somewhere around 98 million paying customers. And keeping these users from fleeing to competing streaming services really isn’t that complicated. These companies just don’t want to do what’s necessary. Namely, listen to their customers, offer more flexible and convenient services, shore up their atrocious customer service, and finally begin seriously competing on price.

Many traditional cable providers have responded by offering a new suite of so-called “skinny bundles” that profess to offer lower costs and to offer greater channel flexibility. But more often than not old habits die hard, and the industry often saddles these offerings with numerous murky restrictions, or layers of misleading fees. The end result is that these offers either aren’t really competitive, or wind up costing nearly as much as traditional cable.

Case in point: Charter (Spectrum) is currently hyping a new $20 bundle of a few dozen channels they’re testing in a handful of markets. Usually these trials exist to give the impression the cable company is being innovative, but are never launched nationwide for fear of mass-cannibalization of traditional customers downgrading from more expensive plans. But most news outlets were quick to lavish praise on Charter’s new offering, many posting the ad for the $20 price point alongside their reports on the new service:

Except that “$20” isn’t really $20, since the cable industry just can’t let go of some bad habits.

Trial participants who actually have tried the service say it not only doesn’t work all that well, but Charter has chosen to hide a number of obnoxious fees that dramatically jack up the price of the service. Of particular note is the fact that Charter saddles the offering with a $6 per month “broadcast TV fee.” As we’ve noted previously, this increasingly-utilized fee simply takes some of the cost of programming and buries it below the line. Why? It lets the cable provider falsely advertise a lower price. And despite being false advertising, regulators from both parties traditionally haven’t given much of a damn.

Some companies, like Comcast, have gone so far as to try and claim the broadcast TV fee is just their way of being transparent with consumers, since nothing quite says transparency like customers having no idea what a service they’re buying will actually cost. But as the market floods with alternatives from the likes of Hulu, YouTube, Sling TV and more increases, cable and broadcast executives are eventually going to have to realize that the threshold for tolerating this kind of bullshit — in the face of real competition — isn’t going to be quite at high as they’re accustomed to.

Filed Under: cable tv, competition, cord cutting, fees, hidden fees, over the top, streaming, tv
Companies: charter, charter spectrum