Study: Pay TV Bills Increasing Six Percent a Year

April 10, 2012 Updated Apr 10, 2012 at 3:44 PM EDT

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Study: Pay TV Bills Increasing Six Percent a Year

April 10, 2012 Updated Apr 10, 2012 at 3:44 PM EDT

(NPD Group news release) The cost for Pay TV is increasing at an average of six percent a year, according to a study by The NPD Group.

According to The NPD Group news release:

The average pay-TV subscription for basic pay-TV service and premium-TV channels in the U.S. reached $86 in 2011. As TV program licensing fees have risen, pay TV monthly rates have also grown an average of 6 percent per year, even as consumer household income has remained essentially flat. If nothing changes, NPD expects the average pay-TV bill to reach $123 by the year 2015 and $200 by 2020.

According to information from NPD’s recent “Digital Video Outlook” report, 16 percent of U.S. households do not currently subscribe to pay-TV services.

“As pay-TV costs rise and consumers’ spending power stays flat, the traditional affiliate-fee business model for pay-TV companies appears to be unsustainable in the long term,” said Keith Nissen, research director for The NPD Group. “Much needed structural changes to the pay-TV industry will not happen quickly or easily; however, the emerging competition between S-VOD and premium-TV suppliers might be the spark that ignites the necessary business-model transformation of the pay-TV industry.”

Read the entire news release from NPD HERE.