Customers Say to Cable Firms, 'Let's Make a Deal'
By LAUREN A. E. SCHUKER
Want cheaper cable television? Try asking for it.
Every three to six months, when his most recent promotional deal expires, Carey Anthony blocks out an hour of his day to negotiate with his cable company. Each time, the president of a software company in Los Angeles says he can knock $20 to $30 off his monthly bill.
Lauren Schuker on The News Hub has some tips on how to trim your cable bill, such as asking your service provider for unadvertised deals.
"Negotiating works every time," says Mr. Anthony, 46, who estimates he has saved more than $350 a year over the past decade. "Sometimes you have to threaten to cancel service, or switch to another provider, or sit on hold for an hour, but I've never failed to get a discount," he says. "You just have to be diligent."
As prices for cable services have surged over the past 10 years and the faltering economy has pressured household incomes, a growing number of cable customers face skyrocketing bills.
Today, the average cable TV subscriber pays about $128 a month in fees for all services, including TV, Internet and phone—nearly three times the $48 they paid each month in 2001, according to estimates by research firm SNL Kagan.
The increase is largely the result of sharply rising costs of programming, particularly sports. The TV networks pass those additional costs onto the operators, which in turn pass them onto consumers.
Cable-company executives have said publicly that they're worried rising costs could drive consumers away.
The largest U.S. cable company, Comcast Corp., lost 442,000 video subscribers in the first nine months of this year, though this was fewer than in the same period last year. No. 2 Time Warner Cable Inc. lost 319,000 over the same period.
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Telecommunications companies including Verizon Communications Inc. and AT&T Inc. are now offering more competitive services. And a growing number of early adapters are severing ties to cable altogether to rely on broadcast TV and Internet distributors, such as Netflix Inc. and Amazon.com Inc., though getting live sports can be difficult for these so-called cord cutters. Even in rural areas, where customers often have only one cable TV option, competition from satellite service is increasing, though satellite providers are facing similar cost pressures and passing on higher bills.
To stanch the bleeding, some cable companies have begun to quietly offer stripped-down plans to retain viewers. They frequently go unadvertised in many regions and customers might have to hunt for them on providers' websites to find out exactly what to ask for.
Comcast, for example, has a "digital economy" tier that sells for between $29.99 and $39.99, depending on the area. The next tier up in service Comcast offers, which includes ESPN, often sells for around $58 a month.
The digital economy tier includes local broadcast channels, as well as popular cable channels, such as USA, Lifetime, but no ESPN. The company says it will work with customers to find a package to fit their needs.
Time Warner Cable late last year introduced a "TV Essentials" package in the same vein. It can cost as much as $49.99 but the company also offers promotional rates as low as $29.99 a month. It includes broadcast channels as well as 38 additional channels, but not ESPN.
Fans of premium channels and their shows, such as HBO's 'Game of Thrones,' can add them to the most basic cable service.
."TV Essentials is geared towards a segment of our customers who are having trouble affording the larger packages, even though they want [them]," a spokeswoman for Time Warner Cable says, adding most people who call about it end up taking a "more robust" package.
Some cable operators and DirecTV also offer a family packages, which usually cost $30 to $40, and give households all the broadcast channels as well limited cable channels such as the Disney Channel and Food Network.
Other subscribers are dumping bulky packages of 190 channels or more in favor of the most basic service—often known as the "Lifeline" tier in the industry. These usually include public broadcast stations and the handful of over-the-air channels, and usually cost $13 to $16, compared to the $40 to $60 it usually costs to get the more widely-distributed level of digital cable service, which includes ESPN, MTV, TNT and other basic cable channels.
Although cable operators don't widely market it, a federal law requires them to allow consumers to tack on premium channels such as HBO or Showtime for roughly $17 a month, even if they only have the most basic cable package.
Some consumers say they can finagle long-term extensions of special promotional rates used to attract new subscribers that normally expire after a year or two.
Getting Down to Basics
Negotiate. Many providers offer less-expensive packages with fewer channels but don't advertise them widely. Providers often will allow customers to continue cost-saving promotions well after they expire. Other providers will cut you a new deal every six months—but you have to call and ask. Often, if customers threaten to cancel service, they are transferred to the "retention department" staffed with representatives who are trained to offer customers deals to stay put.
Don't be beholden to the bundle. Service representatives are trained to push various bundled services (cable, Internet, telephone) because it's more profitable for the company. Some customers don't need a landline and can save a lot by avoiding that service. If you are offered a promotion or discount, suggest how it could be modified to meet your needs and make the company a counter-offer.
Go basic. If you love premium channels, you can still get HBO, Showtime and others with the most basic, broadcast-channels-only service—and knock your bill down to less than $50 a month. Just ask to add those channels onto the most basic offering.
Give up the DVR. Digital video recorders can increase bills by as much as $20 to $30 in some cases. When companies introduced the DVR in the early 2000s, charges were roughly $8 to $9 in addition to the cable box. Now they often cost as much as an additional $12.
Keep tabs on promotions. Place reminders on your calendar for when a special offer expires so you can negotiate a new deal before the promotion ends and you end up paying full price.
Russell Bailyn, a 29-year-old wealth manager in New York City, says he has threatened to switch service in order to keep the new-subscriber promotional rate for television, broadband, and telephone service, even though he originally signed up for Time Warner Cable back in 2004.
Mr. Bailyn says he keeps meticulous notes of his conversations, but it isn't always an easy negotiation. "Time Warner has people trained to deal with people like me," he adds. "They won't just give into an angry, articulate New Yorker easily."
A spokesman from Time Warner Cable declined to comment on customer negotiations and extending promotional pricing.
Other subscribers say they bend the truth to score promotional rates years after signing up by cancelling service and asking someone else in the household—a spouse, grandparent, or older child—sign up for service at the cheaper, "new customer" rate.
Switching to a bundled TV, phone and Internet package can work, if you really need all three services.
Mark Nitzberg, who lives with his wife and two kids in Westmont, N.J., says he now saves about $70 a month as a result of switching his family from Comcast TV and Internet service and Verizon phone service to bundling everything together with Verizon's FIOS service earlier this year.
They used the extra money to buy a new flat-screen TV and upgrade the living room couch to a new sectional sofa. "After seeing how much we're saving, our friends constantly ask how we got the $79.99 deal," he says.
Write to Lauren A. E. Schuker at lauren.schuker@wsj.com
Copyright 2011 Dow Jones & Company, Inc. All Rights Reserved
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