Fans of "House" and "American Idol" got a reprieve on Friday when Time Warner Cable and News Corp. reached an agreement that kept Fox shows on the air for Time Warner subscribers. Details of the Time Warner deal haven't been made public, but they likely included a new fee for Fox broadcasts paid by Time Warner per subscriber, per month, analysts say. So consumers shouldn't get too excited — Time Warner also raised its rates that same day, and further increases are likely, according to an analysis conducted by the New York Times. (SmartMoney.com is a joint venture between Dow Jones, which is owned by News Corp., and Hearst.)
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As media companies demand higher fees from cable companies for access to their programming, cable firms will undoubtedly pass some portion of those costs on to consumers, says Thomas Eagan, an analyst who covers Time Warner Cable for Collins Stewart. And whether these retransmission fees increase throughout the industry, cable subscribers are likely to see rate increases of between 3% and 5% this year, Eagan says.
Of course, higher cable bills are nothing new. The price of basic cable service grew more than 122% between 1995 and 2008, according to the Federal Communications Commission, while the consumer price index, a measure of inflation, grew only 38.4%. The price of the most popular digital packages grew even faster, more than 163% in the same 13 years. With rates high and likely to keep climbing, now could be a good time to take a look at your cable bill and make sure you're getting the best possible deal. Here are three ways to cut your bill without cutting yourself off from your favorite shows:
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Evaluate Your Viewing Habits
Americans watch an average of 140 hours of TV a month, according to the most recent survey from Nielsen. But you may not need the priciest cable package to get your favorite shows. Think carefully about how much TV you're really watching, and which channels you can't live without, and see if you can cut back to a cheaper package, says Gail Cunningham, a spokeswoman for the National Foundation for Credit Counseling. "I always say to cut back rather than cut out," Cunningham says. It'll be easier to stick to a budget that doesn't require drastic behavior changes.
For a family trying to cut costs, evaluating cable package options can be a "teachable moment" if kids are asked to suggest a plan and justify the expense, Cunningham says.
Ask for a Better Deal
If you simply can't give up some of those premium channels, see if you can get your provider to offer a better deal. First, find out if you're committed to a contract that limits your options for walking away if you can't get the deal you want, says Catherine Williams, a spokeswoman for Money Management International.
Do your research and find out what other providers are offering, or what introductory offers your current provider may be promoting. For example, new Comcast subscribers in eastern Pennsylvania can get a basic cable package for $29.99 for six months — but a customer paying the full price of $58 a month might be able to get the promotional price if armed with competing offers. Chances are, simply asking for a better deal will work because the company wants your business, Williams says. "Never threaten an action that you're not willing to do," she says. In other words, don't say you'll take your business elsewhere unless you plan to follow through.
Get Your Shows a la Carte
With many shows now available free on web sites like Hulu.com, you might find you don't need cable to stay current. Hulu and a Netflix subscription helped J.D. Roth cut back from a premium cable package that cost $65.82 a month to a basic package for only $11.30 a month. Roth writes about his experiences paying off $35,000 in debt at GetRichSlowly.org. To keep up with favorite shows like "The Office" and "The Biggest Loser," Roth and his wife purchase season subscriptions from iTunes. Subscriptions typically cost about $35 for a season. "We know what shows we want, so we know if we want to buy them or not," Roth says.
If it's the movie channels that keep you paying for premium, try cutting back and checking out DVDs from your local library, Williams says. "Most people can't just cut out one particular item out of their budget," but shaving even a few dollars each off of several different regular expenses can make a difference, she says.
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