As it happens, my company's client list includes both several of the content providers mentioned as well as a couple of multi-channel operators.
It's surprising that you have the views you do.
The revenue earned from advertising time on virtually any non-sports channel has barely kept up with inflation, let alone the rise in operating costs. This is why channels are more and more turning to subscriber fees. This fall off in advertising revenue is caused by two factors: the increase in channels (which all compete for the same ad dollars by delivering ever more narrow demographics)
Seems there is evidence that their costs are out of control. I can see why it would be hard to keep up with 20% annual increases in "manufactured" costs.
Increased channels is a self-inflicted wound. You know it is getting bad when they replay a show on another channel. They created more channels purely so they could sell more ads. The amount of programming hasn't increased. They are just replaying stuff even more. Now you're saying that the ad revenue has dropped. Imagine that. So in the end they added more cost (in infrastructure, not content) and didn't get any return. These business people couldn't find their ...
But wait... the consumer will bail them out!
Advertisers have been tracking DVR use for years and have a very good sense of how many people skip commercials. They build this "discount" into what they are willing to pay.
Just like I said... the end of skipping is coming.
Do you know what a MCO's biggest headache is? Tracking subscriber counts - knowing how many subscribers have access to which channels. The more "tiers" and packages an operator has, the more difficult the problem. Managing and tracking multiple tiers, grandfathered packages, and the monthly changes subscribers make, not to mention blackouts, special promotions and PPV purchases, is a huge headache and a major expense.
Get a new IT department. And stop playing games with promotions - no excuse for self-inflicted wounds.