Cable, satellite prices soar 43%; Internet, TV prices decline

Online video and over the top delivery aficionados have more reasons to be smug about the continuing growth of the medium. A Bureau of Labor Statistics report says that while the price of Internet services and even televisions has dropped in the past 10 years, the cost of cable and satellite service has dramatically out-paced inflation, rising nearly 43 percent in the same time frame.

While the rise in prices can, to some extent, be attributed to the "More Effect," as is more channels, more technology, and more picture quality, some of it, says In-Sat analyst Mike Paxton, is attributable to consumers who haven't looked for alternatives.

"Historically, particularly when the economy is poor, one of the last things households will consider cutting is their pay TV," Paxton said. "They will cut back on vacations, food costs, won't go out to eat, won't go to the movies, turn the thermostat up or down--but in-home entertainment is one of the last things they cut. ... The cord-cutting phenomenon has been kind of a myth."

And, he says, a major reason people keep the service they already has is simply to avoid dealing with the annoyance of having to change.

With online video and OTT, that's less of a problem, since any high-speed Internet connection will give a consumer access to an array of content on multiple services like Hulu, iTunes and more.

Some analysts say that OTT video delivery actually is generally seen as more of a supplement to Pay TV than a replacement. Nonetheless, OTT revenues are forecast to reach $5.8 billion by 2014 .

For more:
- see this Charlotte Observer article

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