Cable and satellite companies should urge lawmakers to forbid the bundling… (Mark Lennihan / Associated…)
It's New Year's Day, a time for new beginnings. So here are some resolutions I'd like to offer on behalf of some of our friends in the business world.
Cable and satellite companies should resolve to throw their lobbying clout behind urging lawmakers to forbid the bundling of channels by broadcasters.
As it stands, companies like Disney and Fox can insist that a Time Warner Cable or a DirecTV satellite take most or all of their channels as part of any programming deal, regardless of whether subscribers want them. Non-sports fans thus end up paying extra for ESPN and non-Spanish speakers have to pay for MundoFox.
Broadcasters argue that such packages create more programming diversity and allow niche channels an opportunity to find an audience. That may be true.
But it's not how a free market is supposed to operate and it basically means that a manufacturer (in this case, of TV content) is forcing unwanted products down consumers' throats.
Would lawmakers stand for it if Hearst Corp., say, required that you subscribe to House Beautiful and Redbook if all you wanted was Car and Driver? Would they look the other way if Random House demanded that you purchase "Crafting With Cat Hair" (yes, that's a real book) along with "Fifty Shades of Grey"?
Only TV broadcasters get away with such blatantly uncompetitive and anti-consumer behavior, and we pay dearly for their market power and greed.
NPD Group, a market researcher, estimates that the average cable bill will reach $123 a month by 2015 and $200 by 2020. Meanwhile, ratings company Nielsen says the typical viewer watches only about 17 channels on a regular basis.
This is nuts. The solution, clearly, is to allow people to subscribe only to the channels they want. Cable and satellite companies have indicated that they'd be open to so-called a la carte programming. The problem, they say, is that broadcasters refuse to back the idea.
So do something about it. Time Warner Cable spent $5.6 million on lobbying activities last year, according to the Center for Responsive Politics. How about devoting some of that money to persuading lawmakers to crack down on broadcasters' monopolistic behavior?
Broadcasters obviously have no incentive to budge. They make too much money under the current system. It's time for a legislative fix, and cable and satellite companies should be at the forefront of that effort.
Speaking of pricing, it's time for the telecom, banking and airline industries to end their practice of nickel-and-diming customers. Hidden or barely advertised fees have gotten way out of hand and have made it increasingly difficult to shop for the best deal.
Want to fly? Brace yourself for extra fees for baggage, seat assignment, reservation changes, snacks, drinks, even blankets. Airlines pocketed more than $36 billion in revenue from fees last year, according to the Amadeus Worldwide Estimate of Ancillary Revenue, an annual industry report.
Banks will hit you with fees for having a checking account, wanting paper statements, making too many withdrawals, even closing your account once you get fed up with the miserly treatment. Overdraft fees alone bring in about $30 billion a year, according to the Pew Charitable Trusts.
As for wireless companies, the consulting firm KSE Partners crunched the numbers and found that taxes and fees now account for 17.2% of the average monthly bill, up 5.5% over the last two years. Nearly half of Americans with mobile phones pay $100 or more a month, and more than 1 in 10 spend at least $200 a month, according to a recent survey by Harris Interactive.
All these industries use roughly the same business model: Advertise dirt-cheap prices for basic services and then smack you upside the head with add-on fees. I suggest that things be turned around.
List prices should include all routine taxes, fees and services, and then discounts could be applied as customer incentives. Not only would this make comparison shopping easier, but it also would place pressure on companies to lower prices, rather than raise fees.
The problem is one of transparency. No one begrudges a business earning a reasonable profit. The trick is trying to figure out how much profit they're pulling down amid a blizzard of jargon and fine print.
Last but not least, a resolution for all companies about customer service: Take it seriously.
Businesses seem to believe that there's no downside to cutting employees and outsourcing customer support. Shareholders see more profit, managers see more bonuses and customers, well, they just suck it up.
The Internet takes customer loyalty and throws it out the window. We can take our business almost anywhere. Moreover, thanks to Yelp and other review sites, a single bad experience can be amplified into a full-on cri de coeur.
Only the most shortsighted company will ignore customer sentiment amid such variables. Yet all too often, businesses subject customers to uninformed salespeople, long waits at the cash register and the kind of support that seems designed solely to anger and frustrate.
The customer is always right -- that's what they used to say. I wish it was still the case.
Heck, I'd be satisfied to be given the benefit of the doubt just a small fraction of the time.
David Lazarus' column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send tips or feedback to email@example.com.