Gilded Age for Cable

The Globe’s Derek DeCloet has a terrific piece on the fat profit margins for Canadian cable giants – bigger than those in the U.S. due to massive price increases and no foreign competition.

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  1. Another reason for those tidy UBB profits …
    For the two boys and father JR Shaw, the company faces a future retirement bill of some $147 million, according to its own actuaries. The amount these three men have paid into this plan: zero.In the end, the Shaw family gets away with it only because the other shareholders don’t complain about it. Why don’t they complain? Because despite all the fat, the company remains ridiculously profitable, just like the rest of the major players in the Canadian cable and phone racket.

  2. And remember the cablecos Rogers, Shaw, Videotron(all of which have stolen landlines from Bell and Telus) are all responsible for this. The telco bashing at Bell and Telus has to stop.

  3. So what
    This is going to be mighty unpopular to say, but so what? If you don’t like what they charge you, you can always go over-the-air. Take the middleman out of the deal. Ok, you won’t get TSN, etc. The cable companies provide a luxury service for television. If enough people start to do this, then they’ll lower the prices (after all, they make more money if they get $50 profit from 100 customers than $60 from 50 customers).

    Add to this that the revenues for the cable channels will also go down; if more people go over the air, the viewership of those channels goes down. They lose subscription money and advertising revenue, and start to put pressure on the cable companies to lower the margins and may in fact have to take a cut in their own margins.