U.S. Pay-TV Costs Up 7.2 Percent

DURHAM: The average U.S. household spends $78.63 per month for multi-channel video service, which is up 7.2 percent from a year ago, according to new consumer data from Leichtman Research Group.

However, this price hike hasn’t resulted in widespread cord-cutting. The percentage of households that subscribe to pay-TV service is at 87 percent, which is consistent with the past two years, and up from the 80 percent reported in 2004.

The study, Cable, DBS & Telcos: Competing for Customers 2012, finds that overall, 42 percent of individuals agree that changes in the economy have negatively impacted their households in the past year—this figure is down from the 50 percent reported last year, 47 percent in 2010 and 44 percent in 2009. Of those negatively impacted, 39 percent say they have reduced spending on TV, Internet and phone in the past year. Sixteen percent of those negatively impacted say they are likely to switch video providers in the next six months.

"The penetration of U.S. households subscribing to a multi-channel video service has leveled off at about 87 percent nationwide over the past three years," said Bruce Leichtman, the president and principal analyst for Leichtman Research Group. "The defining characteristic of those who do not subscribe to a multi-channel video service remains the level of household income. In addition, those facing economic challenges are most likely to switch provider, or reduce spending on services."