As the economy continues to flounder and the rift between poor and well-off becomes wider, people have begun to cut back on their luxury expenses. One of those expenses happens to be how much they pay for cable-TV and the industry is feeling the bite. To draw back some of the subscribers it’s beginning to lose to this attrition, Time Warner is seeking a middle-ground that will keep customers.

The Wall Street Journal has a technology piece covering these developments,

Meanwhile, the resilience of the pay-TV industry, which held up nicely through last year’s recession, is showing cracks in its armor as weakness in the economy persists. The overall pay-TV market lost subscribers for the first time in its history over the last two quarters, and the effects have been particularly hard on cable companies, which are also losing share to competitors.

Time Warner Cable’s high-end triple-play offering, “Signature Home,” has been tested at $249 per month in New York City. Its low-end offering, “TV Essentials,” is being tested at $39.95 in New York City and $29.95 in northern Ohio. Its appeal will be limited, as it is only targeted to customers that subscribe to TV service, so it doesn’t address concerns about cord-cutting–the prospect that consumers will drop TV service in favor of a broadband-only subscription.

The mention of cord-cutting comes during this era when a great deal of programming is available on the Internet and streaming services such as Netflix are slicing into pay-TV subscriptions. Of course, we’ve seen wars fought between Internet-TV and cable-TV providers as well as attempts at mergers (for example Comcast and NBC Universal.) Although the cable companies may not be entirely losing out there as they also provide Internet access to many of the same users that are using it to become their new cable channel.

Although, it does mean that instead of both cable-TV and cable Internet, most users are eschewing cable-TV in favor of stronger Internet so that they can pull down bigger and better streams.

Time Warner isn’t the only cable company to offer smaller and more economic package for their services as Comcast also released a similar pay schedule for a few years now. The Time Warner package setup just broadens the range that they’re willing to sell to people—from the extremely expensive, to the relatively cheap.

The real kicker here happens to be that as TV networks raise their affiliate fees the cost of cable subscriptions exceeds the rate of inflation and this is at a time when US household incomes have been crushed under the wheels of a bad economy. With all these factors in place, many less people will be able to afford what started as a pure luxury, pay-TV, and now seems to be pretty much a household staple.