Is Cable Really Recession-Proof?
June 25, 2008 11:49 AM
Prevailing wisdom gleaned from past recessions would suggest it is, with a few caveats. During recessions, cable subscribers always trim the sails a little. They drop pricey premium services, only to restore them when the good times roll again.
But this go-round, the economic headwinds are much stronger, with people feeling the double whammy of high gas prices and skyrocketing food costs.
The Associated Press today reports about two kids in Salt Lake City who took to the streets to protest higher gas prices that led their mother to opt out of cable.
And the headwinds are likely to get stronger. The next wave of adjustable rate mortgages will reset, while nearly half of the tax rebate checks have already been issued and spent or saved, likely driving the economy into a deeper hole.
Maybe it’s time for cable to introduce price discounts to keep its customer base. Satellite TV has been aggressive lately, offering unbelievable discounted rates for new subscribers.
Even I, the queen of inertia, am thinking about DirecTV’s offer—it looks tempting.
Anyone out there make the switch yet?