This week The Washington Post released an opinion piece called “You think you hate your cable bundle. You’re wrong.” As you would expect this story raised a lot of eyebrows in the world of cord cutting.
Americans Don’t Love Bundles
The short version of the story is that while many Americans hate bundles in reality they love them. “Yes. America, I have some bad news for you: For all your complaints, you actually love bundles,” said Megan McArdle, the author of the story.
To support her argument she used staying in a hotel to argue that if you didn’t get your soap you would be unhappy in an effort to push the idea that cable bundling is a lot like renting a hotel room.
“Bundling, it turns out, is valuable. You aren’t willing to give up complimentary shampoo and towel service when you’re traveling, because that turns every shower into a financial decision. The hotel, meanwhile, would need more staff to field requests for trivia, raising the price of the room. Much better for everyone to sell you a bundle that we call a ‘hotel room’ but that really includes a bunch of ancillary products you might like to use during your stay.”
McArdle went on to say, “Right now, cable companies sell you phone, Internet service and entertainment products, all of which share one wire, one maintenance operation and one customer service staff. Without those other services, the Internet division would have to cover all that overhead. So if you pay less for the entertainment, you’re probably going to have to pay more for connectivity.”
So what did McArdle get wrong here? She ignored the fact that how Americans consume content is different. One the best examples here is landlines. Most Americans no longer want a home phone because they now use cellphones. According to recent reports from the US Health Department over 50% of American households now do not have a landline phone.
Just like how Americans are increasingly walking away from home phones, they are also walking away from the flood of programming they don’t want to pay for: The average cable TV bundle offers over 100 channels while the average American typically watches less than 10 of them.
This argument that you really love the ease of a bundle ignores the fact that cord cutting can save over $100 a month for many Americans.
You can try to say that we love bundles because we expect soap in a hotel bathroom but if that soap costed more than bringing soap from home I bet millions of hotel visitors would start to bring their own soap.
Cord Cutting Does Not Look Like Cable
One of the points in The Washington Post story is an argument that if you “Start adding up the cost of the subscriptions you’d need to replicate your current viewing habits, and you’ll quickly see that it looks . . . surprisingly like a cable bill.”
That just ignores the fact that most cord cutters are saving over $100 a month. Yet let’s take a look at the argument that cord cutting costs the same as cable TV.
So if it would be true that cable TV and cord cutting cost the same (they don’t) you ignore the fact that cord cutting gives Americans more control over what they pay for. Unlike with cable TV, which dictates what bundles you pay for and forces you to agree to a two-year contract, cord cutting lets you pick the services you want and lets you drop them at any time.
While you may love soap with your hotel room that does not mean you love paying for channels you don’t use on your cable TV bill. Bundles are not the issue for most Americans its the crazy high bills with hidden fees and content they don’t want. Trying to compare cable TV to a hotel room misses why most Americans want to become a cord cutter.
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