Cable companies rarely lower prices when they drop channels

  • Article by: DAVID LAZARUS , Los Angeles Times
  • Updated: September 2, 2014 - 8:41 PM

Though it seems that the price should be lowered when a channel is dropped, TV providers don’t follow those rules.

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Time Warner Cable is at the center of a debate in the LA area as they are trying to charge all customers $5 per month for the channel that airs the Dodgers.

Los Angeles Mayor Eric Garcetti recently stepped up to the plate in the Great Dodgers Blackout, calling on federal regulators to look into why most people in the region can’t watch their favorite team on TV.

At issue is the ongoing spat over how much should be charged for SportsNet LA, the Dodgers channel exclusively distributed by Time Warner Cable. The company is seeking as much as $5 a month from all pay-TV subscribers, regardless of whether they’re sports fans.

It’s an important issue: Should people have to pay for something they don’t want? But there’s a flip side to the Dodgers debacle that also has pay-TV customers stewing.

Shouldn’t your bill be reduced when a channel goes away?

That question was posed to me by Maria Laduca, 61, after one of her favorite channels, Cloo, was dropped this month by Verizon’s FiOS service.

Cloo, owned by NBCUniversal, which is itself owned by cable giant Comcast, describes itself as offering “the best mystery and crime dramas.” That mostly means reruns of shows like “CSI,” “Monk” and “MacGyver.”

“I loved Cloo,” Laduca said. “I have insomnia, so I watched it all night.”

As of Aug. 18, however, Laduca’s nights became decidedly less criminal when Verizon yanked Cloo from the airwaves.

That was bad enough. But when her most recent bill arrived, Laduca realized that it was the same as always. She was still paying about $75 a month for FiOS, along with other sums for other Verizon services.

“That’s not right,” Laduca said. “If they take something away, you should pay less.”

Hard to disagree. If McDonald’s is selling a Happy Meal containing a burger, fries and a drink, and then it stops including the drink, there’s no economic rationale that would explain charging the same price. Other than greed, that is.

Cloo, formerly called Sleuth, has just a tiny fraction of the 2.6 million viewers claimed by ratings leader ESPN, which is estimated to account for about $6 of each pay-TV subscriber’s monthly bill. The monthly cost of Cloo could be as little as a few cents.

But that’s not the point. The point is, if you’re no longer receiving a product, you shouldn’t be paying for it. Laduca and other Verizon customers no longer receive Cloo, yet their bills remain unchanged.

What if it had been ESPN the company had axed? Would Verizon have kept each customer’s $6 a month for itself?

Jarryd Gonzales, a Verizon spokesman, said that “from time to time, we review the FiOS-TV channel lineup to make sure that all content is providing commensurate value to our customers, and occasionally that results in removal of particular channels.”

He said removing a little-watched channel “often helps us to forestall price increases.” But people’s bills might not go down, Gonzales said, because Verizon continues “to add more content and features to our FiOS customers.”

Keeping bills high even when a service is discontinued seems like business as usual for the pay-TV industry. Last month, Comcast shut down the horror channel Fearnet in favor of its scare-centric channel Chiller.

Subscribers of AT&T’s U-verse TV service were among those losing Fearnet. A company spokeswoman, Georgia Taylor, acknowledged that nobody’s U-verse bill went down as a result of the channel disappearing. I asked why. “Because we are adding content continuously,” Taylor answered, though she declined to name any content added since Fearnet’s demise.

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  • Roughly two-thirds of TV viewers in LA area are unable to watch the Los Angeles Dodgers, like Joc Pederson, above, due to a channel being dropped.

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