When Will Programming Costs Subside?

It's an almost certain bet that retail prices for video entertainment services will increase in price, virtually every year, driven, video entertainment service executives say, by ever-higher costs of programming. That doesn't mean immediate changes are coming in the video business. But observers would say a day of reckoning awaits. 

At 10 percent per year rates of growth, the $40 wholesale cost of goods sold today would more than double, to about $80, in another seven years," says Craig Moffett, Bernstein Research analyst.

With an average retail subscription price of about $80, you might assume the retail price is double the wholesale price, implying a $160 a month subscription price in seven years, should nothing else change. Some think that is unlikely.