Donald W. Reynolds National Center For Business Journalism

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TV consumers spend more, watch less: The cost?

May 21, 2014

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Who needs a TV. These kids are watching Netfix on a phone. Photo: Josh Kenzer

A $49 billion cable television merger is a pretty big headline, and one that’ll keep audiences talking for days if not weeks, especially when it concerns a product that’s in pretty much every household’s living room.  As reported Sunday, AT&T wants to buy satellite television provider Direct TV in a $95-a-share merger that will affect about 25 million combined subscribers to the companies’ services.  (That’s closing in on one-quarter of the households in the U.S.)


” Why not use the
AT&T / DirectTV deal
as the springboard for a
personal finance feature “

But localizing these big mega-deals is a tough task, unless the corporations in question happen to be in your backyard.  Because most readers’ and viewers’ ties to the deal are as consumers, that’s the mostly likely path for going beyond a wire story in a local publication.

The monthly cost to many households of telecom and entertainment have reached levels most of us probably didn’t dream about even 10 years ago, before smartphones began to seem a necessity and cable TV whole-house DVR packages came with free computer tablets, wireless systems and other gizmos. The convenience and the pizzazz of the technology is great, but I wonder if some sort of tipping point isn’t being reached now in terms of just how much consumers are willing to stomach when the bills roll in.

The Los Angeles Times posits that the latest mergers won’t save money for service purchasers, nor broaden consumer choice.  Why not use the AT&T / DirectTV deal as the springboard for a personal finance feature about what real readers in your market are spending on telecom, the bang for the buck and strategies to manage or reduce costs?

A recent report from the market analysis firm NPD Group has said that the average monthly pay-TV bill will reach $123 next year and top $200 in 2020, the Consumerist reports.  Yes a just-out Nielsen report says the average cable TV household clicks on only 17 of the record 189 channels it receives – or, as the Washington Post put it in an anti-bundling screed, “Cable forces more channels down unwilling viewers’ throats.”

And Ars Technica reported that according to a fourth-quarter 2013 survey, consumers of the big four smartphone service vendors were paying between $120 and $148 a month for their wireless service.

So basically, households in the U.S. are spending about $250 a month, or $5,000 a year, on wireless and video services that in large part they aren’t using – amid stagnant wages and inflation in core areas like food and fuel.

In addition to cable operators (not sure how forthcoming they will be about subscriber stats) and some consumer case studies on a variety of households (with kids, without kids, sports fans, younger/older viewers etc.) and what they are doing to manage costs, you might talk with area electronics stores about sales of equipment that helps consumers bypass cable TV, from set-top boxes to, as USA Today reviews in this recent article, DVRs you can own.

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