This subject is particularly interesting to me right now as I'm looking at investing in a company that purports to have found a way to add another $5 to a cable bill for a great value added service. It's a neat business and I think it will work, but I won't get in to that. I'm fascinated by the amount of money that we've started paying for automatically on a monthly basis.
We can break it down directionally (these numbers are made up and I'm not expert):
- Mobile Phone - $50
- VoIP - $25
- CableTV - $75
- Satellite Radio - $12
- TiVo - $13
- Netflix - $20
- Internet Access - $40
The Washington Post has also commented on this topic, and I excerpt:
This lock-'em-in-and-keep-'em-loyal routine has roots going back 100 years, with King Camp Gillette, who at one point gave away his innovative safety razor, then made his fortune selling the disposable blades. High-tech companies have found a way to raise the stakes. The foundation of their new business model may have been pioneered by the cable industry in the early 1940s when it began offering consumers, for a small monthly fee, access to a better television picture. In its early stages, cable charged less than $5 a month for a service that was nothing more than retransmission of local TV stations. Now the industry has become a telecommunications and entertainment behemoth that offers hundreds of channels, high-speed Internet access and telephone service, among other things. The monthly cable bill for millions of subscribers now totals well over $100.I've heard that story before, with different actual figures. And, it's just astounding!
