City fathers in Olympia, Wash., are using the increased popularity of over-the-top (OTT) viewing as a reason to wring more money from an already stressed source, raising the tax on Comcast (NASDAQ: CMCSA) cable customers by $5 a month starting Jan. 1, 2015.
The city's finance director, Jane Kirkemo, told The Olympian that revenue levels in the city coffers are sinking "because more and more people are shifting from cable to other Internet services."
Since Olympia can't tax satellite or Internet service providers, it's going after Comcast's subscriber base for money to finance projects such as building maintenance. The city expects an annual income of $800,000 a year from the tax, Kirkemo said, but collections are expected to decline by $10,000 to $15,000 a year.
Depending on how many Comcast subscribers the city has, this could be a politically unwise decision when elections roll around, Councilwoman Jeannine Roe told the newspaper.
"I think we pay too much for our cable right now," she said, adding that cable is caught in a generational bind, as is the city. "Young people just don't watch their TV anymore."
And that, said Mayor Stephen Buxbaum, leaves the city with "very limited options available as a municipal corporation to raise revenue."
- The Olympian had this story
Second quarter pay TV results a 'mixed bag,' analyst firm says
Cord-nevers unlikely to ever buy pay TV, while OTT providers step up 4K game
Cord cutting slows to only 400K subs a year, report says