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TV Set-boxes are a Glaring Exception from a Competitive Market

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Thanks to various advances in technology, we have come to enjoy an impressive choice in how we view news, entertainment, and sports programming. American consumers basically watch what they want, where they want, when they want.

However, there’s one dark cloud hovering over the consumer choice, as the TV set-boxes are a glaring exception from a competitive market. Statistics say that “99 percent of pay-TV subscribers lease set-top boxes from their cable, satellite or telco providers.”

For the lack of a better alternative, pay-TV customers are left spending an average of $231 a year to have these boxes installed in their homes. While televisions, computers and mobile phones have dropped by 90 percent in cost, cable set-top boxes prices have gone through the roof with a 185 percent increase over the last two decades.

If you’ve ever subscribed to a $99-a-month bundle for cable, Internet and phone and then received a significantly higher bill, this problem right here is part of the reason. Even by the time the provider has obviously recovered the cost of the box, the consumer continues to pay for it.

All in all, the business of leasing these devices makes U.S. consumers spend around $20 billion annually. But it doesn’t have to be this way.

In fact, Congress mandated 20 years ago that consumers should have the ability to choose their equipment when they connect to a pay-TV service, just like they would do when signing up for phone service.

Seeing that the regulations issued back then by the Federal Communications Commission are woefully out of date, consumers are now stuck with limited choices for commercially available set-top boxes.

Therefore, the great majority of consumers stick to leasing a box from their pay-TV provider, even though it doesn’t pair well with the wealth of online video content. In order to receive streaming Internet video, users need to have a smart TV that doesn’t have access to the channels and content that pay-TV subscribers have already paid for.

So we end up with higher costs due to multiple devices and controllers, viewing a constrained program choice. But the Federal Communications Commission (FCC) seems to have a solution to this situation, as it proposed how to make way for a more competitive marketplace in the cable business.

The FCC proposal is about one thing: providing the consumer with choice. If the industry should be democratized, cable companies would likely be forced to lower their prices for set-boxes, so consumers will be enticed to stick to their traditional offer.
Image Source: TechX 1

About Ariana Whitmore

She has been writing columns on consumer gadgets since 2010. Her areas of interests include smartphones, tablets, mobile OS and apps. She holds M.C.S. degree and working on her startup, which aims to solve IT support issues.

5 comments

  1. The choice usually comes down to either the single cable company that is in your area or dishdirect tv.

    Honestly i don't see this making a difference, if they can't make money off these boxes they'll just shift it to some sort of fee.

  2. Yay clickbait! This article is awesome in how poor it is. It doesn't really explain anything. There is no mention of TIVO as an altrernative that has been around for a while. There is also that last paragraph that mentions an FCC proposal as if it had been explained at any point in the article, which it hasn't. It just shows up in that last line like the reader will have any clue what you are talking about.

  3. Cable is dying. This article is means nothing. Who actually still pays for TV????

  4. Whatever the FCC proposes to do will not work. Government is force. You cannot force freedom of choice on people or companies. The best thing for the FCC to do is to close its doors and let each individual person decide what they think is best.

  5. Not sure if I'd say it's dying – cable subscriber growth is contracting, down 1% over the last 3 years. That's still 100 million subscribers. Someone is still paying obviously. The one thing that will probably keep some subscribers is sports. If Netflix or Hulu get live sports – THEN cable will die.

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