BOSTON (TheStreet) -- We often hear that "You get what you pay for," but it's just unfair when you're forced to pay for what you do without.
It is inevitable these days that anything you buy that isn't food will come with the cashier's sales push for an "extended warranty." And at least with those marginal insurance policies you have the ability to just say no. Many other purchases -- large and small -- come bundled with either things you don't need or that force you to buy additional items.
Does anyone watch the Archery Channel?
A well-known and much despised aspect of cable television is that you end up paying for channels you may never watch. In fact, on most cable systems, sports channels such as ESPN account for 40% of programming fees -- bad news if you could care less about baseball or the Lumberjack Olympics.
In a study last year, the media and communications analysts at SNL Kagan found that fees paid for sports programing typically exceeded those charged to systems by more-watched networks such as Nickelodeon and USA. ESPN amounted to more than $4 of the average cable bill, compared with 8 cents for The Food Network and 21 cents for SyFy.
That matters a lot by the individual -- who might be a foodie or sci-fi fan who never watches sports -- or in the aggregate. For example: In the just-past low-sports week of May 30 to June 5, according to the site TV by the Numbers, among cable channels in prime-time hours ESPN was ranked 19th, immediately behind The Food Network (No. 17) and SyFy (No. 18). Is EPSN really worth 5,000% more than The Food Network month in and month out?
Plenty of people don't think so, but consumer calls for a la carte pricing have been rejected and dismissed by networks and cable companies.
The old-school business model could be disrupted as more and more people "cut the cable" and instead use Netflix (NFLX) - Get Netflix, Inc. (NFLX) Report or go online to stream Netflix or to such online-only services as Hulu and Apple (AAPL) - Get Apple Inc. (AAPL) Report TV for their favorite shows. This week, at the E3 conference, Microsoft (MSFT) - Get Microsoft Corporation (MSFT) Report announced plans to bring live television to the Xbox console.
Industry groups such as the Consumer Electronics Association, however, are not quite ready to concede much impact from those alternatives. A survey released May 31 of 1,256 adults found 76% of respondents said they were "unlikely or very unlikely" to cancel pay TV service; just 10% said they were likely to do so.
Further solidifying the current cable TV business model was an opinion issued June 3 by the U.S. Court of Appeals for the 9th Circuit in San Francisco. In the case of Brantley et al. V. NBC Universal Inc. et al. a three-judge panel ruled against the plaintiffs in the class-action suit and affirmed that "bundling" practices and requirements for "must-have channels" did not run afoul of anti-trust laws.
Don't box me in
Not only are you stuck paying for channels you don't watch, you'll have to pay for the equipment to watch them, leasing the units through a monthly surcharge.
Cable companies charge for the set-top and modem you need to surf stations and the Internet -- often $5 per month for the modem, for an annual $60. Buying your own equipment (with cable modems ranging in price from around $25 to as high as $86, with most costing around $55) will in most cases mean forgoing the ability to call in for service if the problem might be related to that equipment. But if there's no problem, or you're handy around electronics, you're likely to come out ahead within a year or two.
Wire to wire
Electronic gadgets offer companies myriad ways to keep digging into your wallet.
You order an iPad from Apple. Then you pay $40 to $70 for either its branded case or one from a third party that could, based on style and materials, cost $100 or much more. Then there is an external keyboard, MobileMe subscription (at least until it was discontinued as a pay service last week), a stylus, cleaning cloth, extra power cord, power adapter and headphones or earbuds. Then, there are all those apps, subscriptions, movies and songs that quickly add up to the initial cost of the device itself and more.
At least those purchases enhance the device as "extras." But you also have to add the cost of power cords and adapters that electronics manufacturers usually make in a proprietary, rather than universal, format. Apple even has different power blocks for the iPad and iPod. A standard input and plug would be far more economical, especially for consumers who need to buy a replacement.
Thinking of buying a 3-D TV? Be prepared to shell out up to $100 or more for extra glasses, depending on the make and model. Even a regular HDTV will probably put you on the hook for buying the HDMI cables for your cable TV and peripherals.
Software, hard cash
If you buy a laptop or PC, be should also be prepared to pay for pre-installed software you may never use. The cost of Microsoft Works, Outlook Express and various photo and anti-virus programs will add to the cost unless you buy a bare-bones system. As an added headache, you'll inevitable be hounded by pop-ups trying to goad you into upgrading the version of that software or register it.
If you already have a computer, be prepared to pay twice for the Windows or Mac operating system in most cases. When Dell (DELL) - Get Dell Technologies Inc Class C Report offered a choice between Windows XP or the Ubuntu Linux distribution, choosing the latter knocked $40 off the cost.
The added cost of a PC operating system is sometimes referred to as the "Windows tax." In some cases, depending on whether the end user licensing agreement has been modified, its language can allow buyers to claim a refund by returning the Windows CD-ROMs that came with their new system.
Microsoft's EULA usually contains language along the lines of: "By using the software, you accept these terms. If you do not accept them, do not use the software. Instead, contact the manufacturer or installer to determine their return policy for a refund or credit." Depending on that vendor, it is possible to be refunded the added-on cost after a bit of wrangling with customer support.
When buying a car, you'll have a wide variety of options to choose from. But if you want to drive something off the lot, be prepared to shell out for included items you don't need or even want.
Is a crank handle window good enough for you? Well, good luck finding a car that's not already equipped with power buttons. Satellite radio? You might very well find a unit installed whether you'll listen or not.
Keyless doors or a built-in alarm system? A hook-up for your iPod or built-in GPS? You may very well be on the hook for them, along with rust-proofing, fabric protection and that old standby of negotiation points, floor mats. All those extras can add up quickly, to as much as $3,000 to $4,000, according to NADAguides.com.
By searching car shopping websites, you can come up with a sense of how much extras will add to the sticker and why they are worth bypassing if you can.
Fabric protection will cost about $300, even though a $10 can of Scotchgard from any department store will do. Undercoating and rustproofing could add $1,500 to the bill, even though a new car probably doesn't need them and, if it did, damages would fall under warranty. You could save hundreds by having an independent installer add a LoJack (LOJN) system or car alarm rather than taking one from the dealer.
You are a business traveler. Your plane gets in late, you book a room, grab a few hours of sleep and get up early to check out before your meeting.
Your needs may have been simple, but the hotel very likely tacked on the cost of various amenities via a "resort fee" that can add $15 or more a night to your bill -- whether or not you even bothered to look at the pool or sauna.
There are groundskeeping fees for the lawn you walked past, business center fees for the fax machine you didn't use and fitness center fees for the treadmill you didn't know about. There are even energy surcharges. That copy of USA Today (GCI) - Get Gannett Co., Inc. Report that shows up unbidden at your door to stumble over might also wind up on the bill.
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