Pricing Power and the Beginning of the End for Cable TV?

Wesabe’s Marc Hedlund writes on the Wesabe blog about what his Comcast cable TV service costs – and how those costs have grown – for the exact same service – from $27.88 per month in 2006 to an average of $70.97 per month during 2008. “Same channels, same house, same everything.”

Here’s the graph he posted:

Without a service like Wesabe to make this behavior by Comcast blindingly obvious, many of us might not notice in increasingly bigger hand reaching into our pockets!

Anyway, that’s what is called having “pricing power” – the ability to take prices up without losing demand. Those are great businesses where they exist – but often greed takes over and eventually reactions begin to occur – provoking replacements (where monopolies don’t exist) or substitutions.

As a result of his anger about Comcast’s seemingly endless price increases, Marc’s now moving to Internet-based video delivery instead of cable – and canceling Comcast. One worry, of course, is that Internet costs could also rise – as most of us don’t have all that many choices for Internet service. But, we almost always have more than one to choose from – and having more than one choice is usually all it takes.