A la carte cable t.v.? Can we afford it?

[IGBT]

..aside from watching a few dvd's a month I don't watch tv. But my bravia does get a ton of HD content over the air. HD over the air looks better then HD thru cable.

 

[Gooberlx2]

Originally posted by: IGBT
..aside from watching a few dvd's a month I don't watch tv. But my bravia does get a ton of HD content over the air. HD over the air looks better then HD thru cable.

Trueness, except for when you can't get a decent signal.

 

[Miramonti]

A la carte would mean certain death to many smaller channels.

 

[Sphexi]

I watch:

Cartoon Network
TVTropolis
HGTV
Comedy Channel
CNN
Discovery
History
Sci-Fi
ABC/CBS/FOX networks


I have no problems paying $50/mth for over 70 some odd channels, since my wife watches different channels, and our kids like the little kid cartoon channels, all in all probably 20 different channels are on our list. That's like $2.50 each, I'm happy paying that.

 

[birdlauncher]

The basic premise behind the article seems to be the assumption that under a la carte pricing, rates per channel would change in a way that would keep the total revenue the same for the channels. Since that also means that the total cost to all consumers would also stay the same, so it should be pretty obvious that some people would pay more, some would pay less, and some would pay about the same, but of course there wouldn't be an overall drop in rates. The only way for rates to go down would be if a la carte pricing led some channels to go out of business or be forced to accept lower profits because not enough customers were willing to pay more a month to get them - I certainly don't know how to analyze what might actually happen in terms of the demand, but the point I want to make is that looking at what a la carte would do if the channels adjust pricing to make the same amount of money inherently that the total cost to subscribers will stay the same.

 

[tfinch2]

Originally posted by: dullard
Exactly. Just like at McDonald's (or other restaurants) we should stop ordering just the food we want. It would be cheaper for them to serve us one of every item on their menu each time we enter the establishment.

But wait: how can it be that forced unwanted purchases will cause food prices to fall? If you are eating far more burgers, fries, and shakes, doesn't it therefore follow that your food bill will be higher? Strange as this may seem, the answer for most people is no.

True, if you decide to eat only what you want to eat, a la carte pricing will save you money. But how many people want less than the entire McDonald's menu? If fact, even if you pick as few as a dozen food items per person per meal (salads, burgers, big breakfasts, shakes, etc), a la carte will almost surely cost more than this proposed forced food items bill.

The reason is that individual food items cost vastly more per eater. Under the current system, where you pay per food item, a Bacon ranch salad without chicken costs $3. But if 100% of the people entering were forced to get that salad, it will cost just 1 penny. Thus, when you get one of every food item on the menu, your total bill will be less than $3.

And that is just the effect on prices. Marketing budgets will plummet since McDonald's no longer has to convince you to try the Sausage McMuffin.



The key is that people agreeing with the anti-ala carte scheme have no idea that the revenues aren't fixed (ie ESPN won't have the same income before and after the change). They have no idea that costs per food item (or TV channel) cannot change much (violates supply/demand). Etc. They just like fuzzy sounding reports with no proof and they exclude studies that show ala carte TV would be cheaper for the vast majority of viewers. Sure, we'd lose the channels that you hate to watch. But why should we be forced to subsidize unwanted channels. Ditch the unwanted channels, and we all come out ahead.

Lets try some math. Everyone likes channel X and Y, but no one watches channel Z. Channel X and Y are $4/month, and Channel Z is $2/month. Go to ala carte, everyone buys X and Y and pays $8/month. Their bill dropped to $8. The channels X and Y got the same amount of money, the customers paid less in total. The only loser is channel Z.

Want something more sophisticated? Lets say 50% watch only channel X at $4/month, 50% watch only channel Y at $3/month, and 0.1% watch channel Z at $2/month. Total cost: $9/month. Lets say you only buy the channel you watch. Lets pretend that channel X and Y could double the price (won't happen, but lets just pretend like the article above does). Thus, people who watch channel X now pay $8/month and channel X has the SAME revenue. People who watch channel Y now pay $6/month and channel Y has the SAME revenue. Bingo, everyone pays less. X watchers went from $9/month to $8/month. Y watchers went from $9/month to $6/month. Even Z watchers pay less as their bill goes from $9/month to $0/month as Z goes out of business. In reality, the prices won't change that much. X may go to $4.50/month and Y may go to $3.50/month. Thus, X watchers pay $4.50, Y watchers pay ($3.50), people who buy both channels pay $8 ($4.50 + $3.50). Still, everyone pays less. Even if everyone bought both channels and if the channel prices went up.

:thumbsup:

 

[PingSpike]

Most of those channels deserve to go out of business. I have the basic package. It is at least 75% complete garbage. Probably another 10-15% is semi-worthless. The home shopping network? All those stupid worship channels? CSPAN? 12 shitty news channels? All this crap only serves one purpose: to force me to learn how to program the dish box to remove them from the list. There is literally NEVER any thing on those channels I would watch. Unless those channels are actually paying dish network to subsidize my bill (I doubt it) then they should be paying me to watch that crap.

The argument always assumes all these poor channels deserve to exist. They don't. If no one watches them they deserve to go out of business. And it would be nice if I didn't have to add 50 more channels to get animal planet.

And I agree about the point of the casual viewer...the casual viewer is probably the most worthless demographic target for advertisers. Targeted advertising gives you more bang for the buck because it has a chance in hell of actually converting. Do you want to show 3 grandma your sewing kit, or 1 grandma 7 football fans, 3 cooks, 5 hunters, etc, etc.

I think its true that people that actually want the 10 million channels would end up paying more (assuming people that actually stop the channel on QVC actually exist) but thats not an argument for me to subsidize their television. I'd rather pay 20% less, and cull %80 of my existing channels and add another 5 or so that I can't get to right now without paying $15 more or whatever for the next package. (Actually, I'd probably need to go 2 or 3 packages up based on how things look)

 

[Jadow]

Just having the option, even if the cable companies try to charge a ton per channel, will lead to more competition and ultimatily benefit the consumer.

 

[potato28]

I already have faux A La Carte with Bell. It's pick packages that have channels you like, and for $10 a month you get 100 general news channels. The Discovery package is $5, Movie package is $25, HD is $10 and most of the other package channels are about $10 a month. Problem is Bell don't have that many great channels

 

[torpid]

The problem with the analysis is that it doesn't account for the channel conglomerates and their seemingly intentional dilution of content. Right now it might seem like I watch USA and SciFi. But the reality is that I watch only 5 shows combined on those networks. Those networks could very easily merge and it would have zero impact on me. With ala carte there might be actual market pressure for conglomerates like that to stop diluting the channels by putting a few shows on each of them. Consolidate the channels and make one GOOD channel instead of a few really pathetic channels with an occasional good show.

I watch at most a dozen non-premium channels, including major networks. That number should really be half what it is, but the conglomerated stations spread out shows I like across them.

I get over 100 channels and excluding movie channels I show about 20 of them on my tivo guide listing. Many of those 20 have less than 3 shows I watch regularly. I don't even know why I keep them on the list except perhaps so it doesn't look so sad and pathetic.

Truthfully, though, I am somewhat neutral towards ala carte cable because I prefer the far superior option of ala carte TV shows. I would gladly pay $0.50-3.00 per episode of the shows I watch. I am sure I would save money that way.

 

[George P Burdell]

Originally posted by: Linflas

Originally posted by: Eeezee
Currently, consumer demand does NOT determine what channels are included in the packages. Who seriously watches the home shopping network?

With 2006 sales reported at $3.29 billion obviously somebody watches it.

Are you talking about HSN or IAC (the parent company)?

 

[Turin39789]

just as long as I can still get the basic networks over the air, I'm happy

 

[McCarthy]

"A la carte would kill off many channels"

GOOD! Decades after '57 Channels and nothing on' the TV landscape has little more content spread over even more channels. I got tired of my thumb aching whenever I tried to watch TV and gave up on it. Canceled cable, now I either don't watch a show or catch up years later via the series DVD. Often from the library.

The old model is a dinosaur. People want to choose what to watch and when to watch it. DVRs allow them to somewhat manage this on their own, but that's a bandaid solution. I'd gladly pay per episode rather than even bothering with the step of going a la carte, but the prices must be reasonable. Right now I'm watching none of their ads and the money they get on those library DVDs is pennies per episode I view. Any amount I'd pay is to their benefit. Sure, I'm an extreme case - for now.

 

[ultimatebob]

I have 200 digital cable channels thanks to the HD package I needed to get to use my new TV properly, but I only watch these:

NBC
ABC
CBS
FOX
Discovery
History
Food TV

Even if they charged $10 a month for each channel, I'd still be saving $10 a year on my cable bill.

Oh... and if this means that Fox News and BET fail due to lack of viewers, I'd consider that to be a bonus

 

[upsciLLion]

Originally posted by: techs
Take, for instance, ESPN, which charges the highest amount of any cable network: $3 per subscriber per month. (I?m borrowing this example from a recent research note by Craig Moffett, the Sanford C. Bernstein cable analyst.) Suppose in an à la carte world, 25 percent of the nation?s cable subscribers take ESPN. If that were the case, the network would have to charge each subscriber not $3, but $12 a month to keep its revenue the same. (And don?t forget: with its $1.1 billion annual bill to the National Football League alone, ESPN is hardly in a position to tolerate declining revenues.)

They wouldn't necessarily charge $12 though. They'd charge the amount that brought in the most amount of income. ESPN has the fact that they're mostly a monopoly on their side, but even that can't change the rules of economics. If we remove the ridiculous assumption that they're going to maintain the current level of profit, a different situation results. This article is pretty stupid.

 

[Parasitic]

I wouldn't mind paying $10/mo for just 4 channels.
The rest I will just get through the antenna.

 

[jandrews]

In all fairness the article only listed one possibility. The other possibility is they try to charge 12 dollars for espn, their subscription base goes to hell and they either shut down or lower the price, thats the law of economics dont be fooled by this article.

 

[intogamer]

The channels you wanna watch are going to get lame because there's no competition because no one knows or would pay for them.

Catcrom won't be happy if you only contribute $10/mo + taxes.

 

[KK]

Originally posted by: jandrews
In all fairness the article only listed one possibility. The other possibility is they try to charge 12 dollars for espn, their subscription base goes to hell and they either shut down or lower the price, thats the law of economics dont be fooled by this article.

Yeah, this article is lame. It's basically a socialistic view, afraid of if the cable companies went to a more capitalistic way of operating. I'm sure there are plenty of articles out there that are pro a la carte.

 

[techs]

Originally posted by: KK

Originally posted by: jandrews
In all fairness the article only listed one possibility. The other possibility is they try to charge 12 dollars for espn, their subscription base goes to hell and they either shut down or lower the price, thats the law of economics dont be fooled by this article.

Yeah, this article is lame. It's basically a socialistic view, afraid of if the cable companies went to a more capitalistic way of operating. I'm sure there are plenty of articles out there that are pro a la carte.

Wow. Do you have it backwards. The cable companies are now socialistic, with their monoply.
My is that if you give them a monopoly you must regulate them for the public good.
I guess you just love the cable companies sticking it to the consumer.

 

[PokerGuy]

What a terrible article.... complete FUD.

The one factor none of the anti-a-la-carte folks wishes to include in the analysis is that there is a completely FREE alternative (the major networks). Clearly, people want more than what the free networks offer, that's why you have CNN, ESPN, FOX etc. In a true a-la-carte system, competition between all the channels for your cable dollars will keep the costs low.

If I have $45 to spend on cable each month, I"m going to pick the best grouping that stays within that budget. If some channel gets to be too expensive, I have the option of picking some other cheaper channel to replace it, or I can simply choose to take it out and not replace it -- and watch the free network channels.

No matter how you try to twist the logic, every channel that you get has costs associated with it. Some of those costs are advertising supported, some are paid for by the carrier, some are both. Thus, adding more useless channels increases cost. No matter how those costs are spread over the viewers, there is additional cost, so removing unwanted channels reduces overall costs to the viewers.

The bottom line is going to be: get 200 channels for $60 of which 180 are junk, or get 15 channels you actually want for $50, having the channels competing for your $$. Just like fast food restaurants compete over your dollars, that's why they can't raise their prices much. As always, increased competition is a good thing for the consumer.

 

[Al Neri]

Originally posted by: techs

Originally posted by: KK

Originally posted by: jandrews
In all fairness the article only listed one possibility. The other possibility is they try to charge 12 dollars for espn, their subscription base goes to hell and they either shut down or lower the price, thats the law of economics dont be fooled by this article.

Yeah, this article is lame. It's basically a socialistic view, afraid of if the cable companies went to a more capitalistic way of operating. I'm sure there are plenty of articles out there that are pro a la carte.

Wow. Do you have it backwards. The cable companies are now socialistic, with their monoply.
My is that if you give them a monopoly you must regulate them for the public good.
I guess you just love the cable companies sticking it to the consumer.

No you have it wrong bud.

Regulation is killing TV service.

If deregulation came around - alike phone service we'd suddenly see wonderful things and see them cheaper and faster.

Regulation of the TV industry (e.g. in NYC there's a big fight for Verizon to get a charter to provide TV service) is what is holding back TV and pushing it into a bureacratic nightmare. If nobody watches HGTV, DIYTV, MSNBC (just examples) - they should not be carried anyway.

With the advent of technology one would assume the prices of taking programming and delivering it to the end user should be getting cheaper almost by the minute, why are we still paying these high bills? Regulation sure is a big reason.

All TV services are doomed with the onset of IPTV anyway.

 

[KK]

Originally posted by: techs

Originally posted by: KK

Originally posted by: jandrews
In all fairness the article only listed one possibility. The other possibility is they try to charge 12 dollars for espn, their subscription base goes to hell and they either shut down or lower the price, thats the law of economics dont be fooled by this article.

Yeah, this article is lame. It's basically a socialistic view, afraid of if the cable companies went to a more capitalistic way of operating. I'm sure there are plenty of articles out there that are pro a la carte.

Wow. Do you have it backwards. The cable companies are now socialistic, with their monoply.
My is that if you give them a monopoly you must regulate them for the public good.
I guess you just love the cable companies sticking it to the consumer.

Hmmm...I don't know what to say other than I must not have got that across right. I view that having all the channels on a line up a socialist way of business. The useless channels are being helped out by the truly good ones. The article is promoting that socialistic view in saying that a la carte would cost more.

 

[Nitemare]

just because some people choose al la carte doesn't mean they all will. Some people actually want to watch the homeshopping network and 90% of the other crap the cable company carries.

The FCC is composed of either mental retards are people being bought out and paid for by one or both of the cable monopolies.

I don't pay for cable now. If I could get espn for less than 60 a month, I would consider it.

Local, ESPN, History Channel, News channel is not worth $60 a month regardless of the fuzzy math you use.

But it would be worth more than the 0 dollars a month that I am paying now.

 

[JeffreyLebowski]

I have an idea, if a channel has to charge outrageous prices for a la carte then they need to make changes to their system to survive. If Oxygen or some other low viewed channel has to charge $10 per subscriber up from the $0.50 on the old system, then maybe it means they don't really have the viewership to justify being on TV. There may be some demand for a station but not enough to warrant paying more for it.
I watch 4 channels, Sci-Fi, and that's only for Stargate, History, Discovery and FSN for hockey. other than that, I watch broadcast tv. I'll pay $5 a month for each of my channels. If you want to watch espn so bad pay up and watch it. As it is now, I'm subsidizing you to watch it. Socialism in TV???