Cable companies fear more than the Internet

TV remote

JEREMY HOBSON: The Cable TV industry is in Chicago today for its annual get-together. And this year the Internet isn't the only threat to cable.

In this economy it's getting too expensive for a lot of people, as Sally Herships reports.


SALLY HERSHIPS: This statistic is getting a lot of play this week at the Cable Show.

MARK ROBICHAUX: The bottom 40 percent of U.S. households have already exhausted their disposable income.

Mark Robichaux is Editor in Chief of Multichannel News.

ROBICHAUS: So there's not a whole lot left for clothing, or for cable. You can't have a business if people can't afford your product.

That hasn't stopped the big cable operators from raising prices. Robichaux says the average subscription costs 30 percent more than it did five years ago.

Kartik Hosanager teaches Internet media at Wharton. He says some cable industry execs have talked about offering lower cost options but so far there's been little action.

KARTIK HOSANAGER: It might change in the distant future but it's not going to happen in the immediate future.

Hosanager says first cable companies will need to accept that the old model is in danger. This week's downbeat meeting may have signaled a first step.

I'm Sally Herships for Marketplace.

About the author

Sally Herships is a regular contributor to Marketplace.

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