We have witnessed the price implosion of oil, and the subsequent decline in gasoline prices.  Is this the beginning of a trend, and what industry will admit and be subject to an inability to control its pricing structure?

Cable television?  The cost of cable television is a broken promise.  Originally, for those old enough to remember, the promise of cable television was that though it may involve a charge, something new for television, there would be no commercials.  Anyone remember?  Now, the cable providers have it both ways.  There are commercials, and infomercials, on which they receive money from not only the viewer / buyer of their service but also the marketing department that buys the air time for the commercial.  Nice move.

Is cable the next industry to lose their ability to hold their prices?  Add in the nonsense that one must pay for programming one never watches rather than being allowed to choose what they watch and pay for.

The cable companies attempt to stave off this pricing fragility by providing more product for the same price.  But even this is finite, as is the ability of the customer to utilize the mountain of bad movies, for example.  How many more pawn shop shows, cup cake contests, and minor league sporting events are necessary, or desired?

Or, will it be the cell phone service provider to next lose its ability to hold their prices?

The complexity of the phone bills, the monthly taxes and usage charges, the two year contract trick, and the roll over minutes are all camouflage that befuddles the customer.

Complexities create a surrendering consumer that ends up signing fine print legal mumbo jumbo and locking oneself into multi year obligations.

Once the infrastructure for the cell phone delivery is in place, the cost of operation seems pale to a tangible depreciating asset in another industry.  Though “burning up the phone lines” is a phrase we are familiar with, nothing really burns.  Airwaves seem to exist undisturbed by cell phone traffic and data transmission.  So why so expensive?

The consumer seems to be strapped with the ever increasing cost of health insurance, house energy costs, school tuitions, and food.  The respite from gasoline is a welcome relief, but may only be transitory.  The recent retail sales figures would suggest the new money from gas savings isn’t exactly hitting the stores. 

It seems likely that some industry, and likely the ones just mentioned, will experience a customer no longer willing to pay the price. ( I am breaking the phone contract, so sue me.) The psychology for lower prices is out there in the economy, and we have all witnessed what occurs when a pricing structure collapses.  Anyone wish to buy last years “must have” golf clubs for about 50% off?

James Longstreet