— Chuck Hoover and his wife pay more to Verizon every
month not to subscribe to its cable television.
this makes no sense, welcome to the complex and
overwhelming Wild West of content providers,
"skinny bundles" and a la carte streaming
in their marriage, the Hoovers, who live outside
Pittsburgh, were offered Verizon cable and Internet.
This is known as bundling, and cable providers often
throw in landline phone service as well. In many cases,
these services offered separately cost more than the
bundled price, which is how the Hoovers — who had no
desire to purchase cable TV — wound up paying about $5
a month more for just Internet than if they’d gotten
the Internet-cable bundle.
bundling is a one-price-fits-all time-tested model. It’s
easy to sign up, tough to cancel. Subscription prices
for such bundles have soared over time, often topping
$100 a month.
because of price, the past five years has seen a growing
number of people who are "cord cutters" (those
who give up cable) and "cord nevers" (those
who never had it in the first place). Many people use
their cell phones exclusively, so goodbye, landlines.
24 percent of Americans have no cable or satellite
service. And according to a December 2015 Pew Research
Center report, home broadband adoption has plateaued,
with 67 percent of U.S. households subscribing, down
about 3 percent since 2012. A growing number of folks,
such as the Hoovers, subscribe only for the Internet.
when it comes to cable subscription, subscribers are
demanding more say in what’s available in those
bundles. According to a 2014 Nielsen "Advertising
& Audiences" report, the average American home
receives 189 channels. We watch just 17 of them.
must pay for the other 172, regardless of whether they
watch. Imagine going into a grocery store to buy apples
but accruing a $20 tab because you are required to buy
milk, detergent and dog food as well.
little surprise then that streaming services are picking
up steam. The biggest, including Netflix, Hulu and
Amazon Prime, now are producing quality original content
to complement a vast array of TV and movie choices. But
there’s also a surge in stand-alone versions of former
cable-only and broadcast networks such as Univision, HBO
Now and CBS All Access.
FiOS introduced a "skinny bundle" last year
that promised subscribers more choice and lower fees. In
an investor event statement, Fran Shammo, Verizon
executive vice president and chief financial officer,
said that about a third of Verizon’s subscribers have
opted for Custom TV.
Verizon skinny bundle works this way: According to its
website, customers can pay $79.99 a month for about
three dozen basic cable and broadcast channels. Then
they add two of seven "add-on" packages that
comprise themed networks such as "sports" or
"news and info."
that $79.99 a month figure is deceptive. It includes
Internet and digital voice, and bumps up to $99.99 for
the second year of the two-year contract. By the time
equipment fees are thrown in, not to mention sundry
taxes, that skinny bundle could wear the same dress size
as a standard Verizon subscription. Disney, which owns
ESPN, is in a legal dispute with Verizon, which does not
offer the sports giant as part of its standard skinny
is significant for Disney because ESPN has the most
expensive network carriage fees in the business. It
costs more than $6 per subscription per month for cable
providers to carry it, which is passed to the consumer.
And because, by some estimates, only 20 percent of cable
subscribers actually watch ESPN, having it on the basic
tier is a nice cash cow for Disney.
said Verizon has been disappointed few subscribers are
adding optional $10-a-month bundles to Custom TV. And,
of the seven add-on packages, sports options don’t
appear to be a priority, he added.
sports are still the carrot to the cable stick when it
comes to live network broadcasts. Although CBS All
Access has a great deal of archived and original
content, for example, it does not include NFL football.
Chase is in sports media relations at Robert Morris
University. As such, her interest in following her
favorite teams goes beyond a personal interest. As a
Verizon Custom TV subscriber, she has purchased the
working in sports media for several years, I find myself
more of a fan of the athletes than any particular
team," she said. "For me, it’s more fun that
way. That’s a big reason why I like having NHL Network
and NBCSN, giving me access to other teams around the
NHL and a variety of international competitions like the
Olympics and World Juniors."
Hoover said most of his peers who still subscribe to
traditional cable do so because of sports. "For
now, people say, ‘I can’t get rid of it, that’s
how I get ESPN.’"
the tech savvy, cable is not a requirement to watch many
sporting events, not to mention local programming; an
over-the-air HD antenna can catch the signal. Dave
Culyba and his wife, Sabrina, live in Pittsburgh. They
employ a bevy of platforms to watch without cable: a
Roku box for streaming, an antenna and a Mac mini hooked
to a TV.
of us wanted cable enough to pay for it. … Our push
was to only have Internet and nothing else, something
the cable-phone companies make rather difficult,"
have Netflix and Amazon Prime, and they pick up PBS
over-the-air for "Downton Abbey" and kids’
shows for their young daughter. When "The Daily
Show With Jon Stewart" was in full swing, they were
regular watchers through the Comedy Central website.
for many who grew up with cable television, breaking up
is hard to do.
is phenomenon called ‘loss aversion,’ and people are
much more averse to give up things they are used to than
getting something new," said George Loewenstein, a
professor of economics and psychology at Carnegie Mellon
University. Loewenstein, who has a doctorate in
economics, is an expert in the how and why of spending.
surprises him is that many people who could save money
by renegotiating their cable contracts hesitate to do
so. "They just think that whatever they’re
offered is what’s out there. But that’s not true.
All of these companies offer all these different deals,
and if they sense you might not sign up, all of a sudden
they’re going to pull another deal out of the