Sunday, December 28, 2014

Your unfair cable bill: Most expensive channels aren't the most watched

LOS ANGELES (TheWrap.com) - Love "The Walking Dead," but hate "SportsCenter"?

Too bad.

Cable providers pay only a fraction as much for AMC - the network that airs TV's top-rated drama - as they do for ESPN. And they pass their fees on to you, the consumer.

Many consumers are worried that bills will only go higher if Comcast, the country's biggest cable provider, is allowed to buy Time Warner Cable.

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  • Comcast-TWC deal may prompt a la carte pricing
  • The average cable bill in the United States has increased about 4.5 percent annually over the past 15 years to more than $90 today, according to the Federal Communications Commission. One major reason is the increase in the prices networks charge cable providers to carry their programming - known in the industry as carriage fees.

    But those fees don't always correlate to networks' popularity.

    ESPN charges the most per subscriber by far - $5.54 - taking up on average about 6 percent of basic cable bills, according to numbers SNL Kagan compiled exclusively for TheWrap.

    But ESPN finished 2013 as the third-most-watched network overall. The most-watched network, USA, commands only the sixth- highest carriage fee, collecting a modest $0.71 per subscriber on average.

    In fact, a comparison of SNL Kagan and Nielsen numbers shows that four of the Top 10 most-watched basic cable channels - History, A&E, FX and AMC - don't crack the list of the Top 10 most expensive.

    Meanwhile, four of the 10 most expensive networks are not among the most popular. They are the NFL Network, ESPN 2, Nickelodeon and CNN.

    The ESPN disparity can be explained in part by the hugely expensive professional sports contracts the network holds to broadcast games. But cable providers are afraid to play too much hardball with the sports networks, because they consider them too valuable.

    Cable providers also pay more for 3D networks. But 3D channels aren't a huge factor because relatively few people opt in. ESPN 3D charges $2.79 per subscriber on average, and 3Net charges $1.33.

    L.A. Ross and Tony Maglio Reuters
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