The not-so fine print of corporate TV
July 18, 2014
The modern private sector equivalent of “lions and tigers and bears, oh my” is the world of corporate advertising, which shifted sometime back from presenting merits of products to selling lifestyles. Along the way, they have become adept at obscuring the consumer’s net value.
Case in point is the endless cycles of TV cable and satellite subscription sales. While by no means the worst at selling hypocrisy — “special deal if you act now (just don’t read the fine print)” — these hucksters are pretty good about being pretty bad for the unwary consumer.
What consumers see is the hype: “double savings!” “free!” “over 100 channels!” (most of which are either mediocre reruns running back decades or 24/7 advertising channels). Just sign up for two years and get the “great rates” for one year.
What is never disclosed is the net cost and even with a college degree you may be hard pressed to figure out what that is. This truly is one of the great marketing scams of modern times.
Let’s do the math. This requires strong coffee, a pretty good English, math, business and legal background and a magnifying glass to read the microscopic small print contract language (hint: it’s small and complicated for a reason).
One recent pitch for satellite TV offers basic “select” programming for 12 months at $29.95/month (normally $49.99/month) — “No, wait, if you act now, it’s only $24.99/month and we’ll throw in the good stuff (HBO, Showtime, etc.) for three months.”
So at first glance, it appears you are getting over a hundred (!) TV channels for less than a dollar a day, arguably a good deal (ignoring the fact of how much of the programming is truly for the brain dead).
Now try to interpret the microscopic fine print to attempt to see what you are legally bound to with the least expensive two-year contract. One year intro pricing at $24.95 = $299.40, plus one more year at $20/month if you cancel (another $240) gets you to $539.95 over two years, or about $22.50/month. Remember, however, you really got only 12 months of TV and 12 months of penalty, so you are really paying $44.99/month for the TV you actually get to watch ($539.95 divided by 12).
Want to keep service? After 12 months, if you do not contact the vendor, then services go to prevailing rates, $49.99/month for the remaining 12 months — maybe. Did you not see “pricing subject to change at any time”? Assuming $49.99 for 12 months, you are now at $299.40 for the first year and $599.88 for the second year, for a total of $899.28, or $37.47/month.
Do you need a receiver? It’s not clear whether you need one or get one provided, but an “advanced receiver” is another $25/month (unless you link payments to your private bank account and email address; then it is “only” $15/month). Your two-year total is now $899.28 plus $600 (24 multiplied by $25), or $1499.28 for programming and receiver (a total of $62.47/month). Not clear what triggers the “non-activation fee of $150 per receiver may apply” clause. A law degree may be helpful.
Heaven forbid if you don’t do the math on the “free” short-term bonuses. Careful reading yields another $30/month (after “three free months”) for HBO and Showtime (another $630 over the two years — $30 times 21 months) and another $48/month (after the “three free months”) for the movie package (for additional $1008 over the two years — $48 multiplied by 21 months).
So if you keep the least expensive package for two years ($539.95), then add a receiver (with discount, $360), HBO, Showtime ($630) and the movie package ($1,008), you are now on the hook for $2,537.95, or $105.75/month.
To recap: the least expensive option (canceling after 12 months) costs $539.95 for two years (one year of TV and one year of penalty). Add premiums (hey, don’t get me started on the “special” sports packages), and you are in for $2,537.95 for two years, or over $100/month. Or you could buy a used car on payments.
But wait, there’s more! “Taxes not included.”
Consider an alternative: you can rent recent movies and TV shows from local vendors and have total control over your choices, unlike the corporate model, where you have to take tons of junk to get the good stuff. This is what they mean by “menu” versus “bundling.”
I’ll support local vendors any day over corporate monopolies.
Terry Lamphier is the Nevada County District 3 Supervisor.