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

[MrPickins]

With TV networks,

Quality > Quantity

 

[techs]

Originally posted by: 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???

btw do you think the cable companies actually pay to carry the Home Shopping Network? Seems to me it would be the other way around.

 

[uclaLabrat]

Originally posted by: JS80
I would rather pay $10/month for Fox News than get paid $10/month to watch CommunistNN/MSNBC

Are you serious? Even though they're the most factually retarded network? It's not even news, it's propaganda.

 

[RadiclDreamer]

I literally watch ONE fucking channel and my wife watches maybe 3 so again tell me why I give 2 shits about how much someone has to pay for their precious sports networks? Comedy Central is the only thing I can even tolerate watching, and even thats not very often

 

[Chryso]

I am not really for a la carte but I am for letting my cable company move ESPN from basic cable to the higher tier cable.
ESPN and the NFL Network can both bite me.

 

[CPA]

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

Let me tell you my channel picks:
Sci-Fi
History Channel
Discovery Channel

Do you, OP, watch even a dozen different channels of cable television? You can't include the networks that broadcast over the air; those are "free" in the sense that you don't need to pay a subscription fee. I can't even think of a dozen cable channels that I'd be willing to subscribe to (even watching them once per month).

Hell, I can (includes my wife's and kid's viewing habits):

ESPN
ESPN2
ESPN Classic
ESPNU
NFL Network
CSTV
NBA network
TNT
USA
TBS
O
Lifetime
Disney
Nickelodeon 1
Nickelodeon 2
Cartoon Network
Spike
Discovery
Biography
History Channel
The Learning Channel
National Geographic Channel
Food
HGTV
All Fox Sports channels
CNBC
Fox News
Fox Business News
HDNet

And yes, I've viewed each of these at least once a month.

 

[Modelworks]

What would we have to pay to get rid of commercials entirely ?
Yeah, probably way too much.... but I can dream !

 

[ElFenix]

why does everyone assume the home shopping network would go out of business? that thing was around when it was an over the air station. you pay nothing for that channel to be in your cable service. and i guarantee that if there was ala carte cable your box would still pick up all the channels that cost the cable company $0 in fees/royalties (that's how the regulation would be written, it's also how startup channels would get going). yes, there are cable channels that are supported completely by revenues other than subscriber fees. HSN is one of them. a lot of the garbage channels cost the cable company nothing as well. the channels that cost something are the ones that people get cable for, such as ESPN, CNN, etc.

 

[rbV5]

C-Band Satellite has offered A La Carte programming in addition to packaged programming for years.

I'm not sure why it wouldn't work in a very similar fashion.

 

[skace]

This article has the most goddamn stupid math I have ever seen in my entire life.

"Yea so if only 2 people watch this channel, they each need to pay 4 million dollars so the channel can continue on it's 8 million dollar operating costs."

No, that's not how it works retard, if only 2 people watch that channel, it realizes it makes no money, works to entice more people or sucks and dies.

There is only 1 issue I see with the pay per channel routine, how does a startup channel gain popularity if no one buys it and watches it?

Elfenix answered my question, woops.

 

[Mermaidman]

Originally posted by: skace
There is only 1 issue I see with the pay per channel routine, how does a startup channel gain popularity if no one buys it and watches it?

I agree, and how can any real man give up his right to channel surf?

Another potential logistic problem: In an a la carte model, how quickly can a provider change a subscriber's channel line-up? I pay a reasonable amount for my awesome DirecTV package and would hate to switch to an a la carte model.

 

[vi edit]

I guess my rather simple brain simply thinks this:

A cable company is obviously profit driven. They are in business to make money. They make money through subscribers.

I'm positive a cable company has done it's diligence on this subject and has determined that it isn't a viable option to the current bundled platform. Through this research they have either determined that they would deliver less product for the same or less as people currently pay, or they have found that they will not gain enough new subscribers to make up for a loss of profits under the existing model.

Cable providers have more costs than simply paying for their content and recapturing that from subscribers. They have a fleet of workers and equipment that they have to keep on hand to repair their lines & equipment.

One simple service call for a day could easily wipe out any profits they make for a year on that suscriber.

These places aren't in business as a gratuity. They exist to make a profit.

No profits, no business. No business, no service.

Again, it's a simplistic view. But I'm sure that the cable providers have done their homework and ruled out that it isn't the best choice they could make.

I'm not going into the profits of a cable company again. You can look up the 200+ post "Bit Torrent" thread debating my views ad nauseum for that.

 

[nonameo]

I'll take a la nothing over a la carte or the current scheme.

Not only that, the math is simple. I pay 0$ a month and I get nothing. Everything else is more expensive.

 

[PokerGuy]

Again, it's a simplistic view. But I'm sure that the cable providers have done their homework and ruled out that it isn't the best choice they could make.

Of course they've done their homework and determined that it's not the best choice --- for them. Just because it's not the choice that maximizes their profit does not mean it's not the best choice for the consumer. Of course the cable company is not a charity, they will simply adapt to the new model and make money accordingly (I imagine your bill will be something like this: "service fee" : $15, ESPN: $5, Comedy Central: $3 etc etc, Total Bill: $55.

So yes, the cable company will still get their profits one way or the other, but going a-la-carte would force the process to be more open and allow the consumer to see exactly what they are paying for each channel and for service.

 

[jjones]

Originally posted by: dullard
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.

This is extremely flawed. People don't watch just X, or just Y, or just Z.

We're talking revenues per subscriber, not total viewing time. Given your numbers, X would have to double prices to get the same revenue from those 50% subscribers. That's $8/month as you say, but that same subscriber also watches Y, who also has had to double the charges for it's suddenly reduced 50% share. Now the subscriber is paying $14/month to watch those two channels instead of the $9/month they were paying for all three channels.

By the way, I'm not against a la carte. I think a version or hybrid of a la carte might be very good. Cable should break up its offerings into smaller packages and also provide some of the "premium" channels a la carte. Say you choose a nature and history package, or movie package, or kids package or family package for basic service. They charge 10-15 dollars for that and then you can add channels to it such as ESPN or whatever, or even add an additional package, so you could get the nature and history package along with the kids package together.

 

[dainthomas]

Originally posted by: PokerGuy

Again, it's a simplistic view. But I'm sure that the cable providers have done their homework and ruled out that it isn't the best choice they could make.

Of course they've done their homework and determined that it's not the best choice --- for them. Just because it's not the choice that maximizes their profit does not mean it's not the best choice for the consumer. Of course the cable company is not a charity, they will simply adapt to the new model and make money accordingly (I imagine your bill will be something like this: "service fee" : $15, ESPN: $5, Comedy Central: $3 etc etc, Total Bill: $55.

So I can pay $50 for maybe 20-30 channels instead of $43 to get Dish Network's top 200 package. What a deal. Less choice, crappier more generic programming (because each network has to appeal to the widest possible audience) on the channels that DO survive.

Sorry, but I think I receive great value for the money I pay. I receive all the core channels I watch (Scifi, Science, Discovery, History, Animal Planet, Travel, Food Network, BBC America, Military etc.) plus I can occasionally branch out from my comfort zone if something looks interesting to me. I'll often do searches for something that I'm curious about (such as Ecuador or giraffes or whatever) and record whatever pops up. It's nice to know that I don't have to go through the hassle of calling my provider to add a channel only to cancel it the next month if nothing on there interests me.

Overall, sounds like a big pain for not much (if any) benefit.

 

[PokerGuy]

Originally posted by: dainthomas

Originally posted by: PokerGuy

Again, it's a simplistic view. But I'm sure that the cable providers have done their homework and ruled out that it isn't the best choice they could make.

Of course they've done their homework and determined that it's not the best choice --- for them. Just because it's not the choice that maximizes their profit does not mean it's not the best choice for the consumer. Of course the cable company is not a charity, they will simply adapt to the new model and make money accordingly (I imagine your bill will be something like this: "service fee" : $15, ESPN: $5, Comedy Central: $3 etc etc, Total Bill: $55.

So I can pay $50 for maybe 20-30 channels instead of $43 to get Dish Network's top 200 package. What a deal. Less choice, crappier more generic programming (because each network has to appeal to the widest possible audience) on the channels that DO survive.

No, if you're currently paying $43 for 200 channels (180 garbage, 20 good ones), you'll likely end up paying $30 for 15 or so good channels of your choice, gone are the garbage channels, and you'll end up paying less overall. There's a reason both the content providers and the content distributors are resisiting this so much: the consumer wins, and they end up having increased competition, which reduces their profits.

Sorry, but I think I receive great value for the money I pay. I receive all the core channels I watch (Scifi, Science, Discovery, History, Animal Planet, Travel, Food Network, BBC America, Military etc.) plus I can occasionally branch out from my comfort zone if something looks interesting to me.

You are led to believe that it's a "great value", because you don't know what the alternative is, that's exactly what they'd like you to believe. You think $43 is a good deal for all those channels, but what if (through increased competition), you could end up getting your 25 favorite channels for $25 instead? Does $43 for good + garbage sound better than $25 for good channels?

This is not rocket science. Other than channels that are strictly add supported or sales supported (Home shopping etc), it costs $$ to produce content for a channel. No matter how crappy the channel, it costs a lot of money to produce the stuff, and someone has to pay for it. In today's model, the costs are being pooled and then passed on to the cable company, then on to you, the consumer. In an a-la-carte system, the costs would no longer be pooled, and you would no longer bear the cost of producing content on channels you don't care about.

The only valid argument those against a-la-carte have is that it's going to reduce overall variety. I suspect some channels would go under simply because there isn't a large enough section of the viewing population that would pay for them. I don't have a problem with that though.

 

[waggy]

if you really think you are going to get 15 of the top channels for $30 you are nuts.

 

[dullard]

Originally posted by: waggy
if you really think you are going to get 15 of the top channels for $30 you are nuts.

Why? Just a few years ago we got the 15 top channels, along with 40 other channels for $36/month.

Time Warner prices for 50+ channels (including the top viewed 15 standard channels, but not ala carte channels like HBO which have always been ala carte):
1999: $36.03 (after all taxes, fees, etc.)
2000: $37.87
2001: $39.72
2002: $43.98
Late 2002: $44.19
2003: $47.51
2004: $50.29
2005: $53.14
2006: $56.24
2007: $58.58

This non-ala carte method nearly doubled prices in 8 years for those same 15 good channels and 40 crappy ones.

Originally posted by: jjones
This is extremely flawed. People don't watch just X, or just Y, or just Z.

We're talking revenues per subscriber, not total viewing time. Given your numbers, X would have to double prices to get the same revenue from those 50% subscribers. That's $8/month as you say, but that same subscriber also watches Y, who also has had to double the charges for it's suddenly reduced 50% share. Now the subscriber is paying $14/month to watch those two channels instead of the $9/month they were paying for all three channels.

I covered that situation in the paragraph you quoted. Yes, some individual channel prices may go up in some cases. But, they can't go up much due to supply/demand. Also, if you are correct that people want all those channels, then there would be no reason for prices to go up. My later case where you get both X and Y for $1 less than what you paid for all 3 is what WILL happen (studies have shown this).

 

[torpid]

I'm probably in the minority, but I'd rather pay $50 for 20-30 channels that produce shows I actually like than $43 for 200 channels, 20-30 of which have shows I like. I'd rather my $50 go towards channels that produce stuff I like exclusively. It may be that most of what's on those 20 is still garbage by my standards, but at least it's not 100% garbage like those other 180 channels. How much of my $43 goes towards those 20 channels? I doubt it's even $10.

It's simple, really. I want to pay for things I like and not pay for things I don't like.

 

[vi edit]

Originally posted by: dullard

Originally posted by: waggy
if you really think you are going to get 15 of the top channels for $30 you are nuts.

Why? Just a few years ago we got the 15 top channels, along with 40 other channels for $36/month.

Time Warner prices for 50+ channels (including the top viewed 15 standard channels, but not ala carte channels like HBO which have always been ala carte):
1999: $36.03 (after all taxes, fees, etc.)
2000: $37.87
2001: $39.72
2002: $43.98
Late 2002: $44.19
2003: $47.51
2004: $50.29
2005: $53.14
2006: $56.24
2007: $58.58

This non-ala carte method nearly doubled prices in 8 years for those same 15 good channels and 40 crappy ones.

Originally posted by: jjones
This is extremely flawed. People don't watch just X, or just Y, or just Z.

We're talking revenues per subscriber, not total viewing time. Given your numbers, X would have to double prices to get the same revenue from those 50% subscribers. That's $8/month as you say, but that same subscriber also watches Y, who also has had to double the charges for it's suddenly reduced 50% share. Now the subscriber is paying $14/month to watch those two channels instead of the $9/month they were paying for all three channels.

I covered that situation in the paragraph you quoted. Yes, some individual channel prices may go up in some cases. But, they can't go up much due to supply/demand. Also, if you are correct that people want all those channels, then there would be no reason for prices to go up. My later case where you get both X and Y for $1 less than what you paid for all 3 is what WILL happen (studies have shown this).

And I remember $1.25 gallons of milk and $1.50 gallons of gas in those times too.

 

[jjones]

Originally posted by: dullard

Originally posted by: waggy
if you really think you are going to get 15 of the top channels for $30 you are nuts.

Why? Just a few years ago we got the 15 top channels, along with 40 other channels for $30/month.

Originally posted by: jjones
This is extremely flawed. People don't watch just X, or just Y, or just Z.

We're talking revenues per subscriber, not total viewing time. Given your numbers, X would have to double prices to get the same revenue from those 50% subscribers. That's $8/month as you say, but that same subscriber also watches Y, who also has had to double the charges for it's suddenly reduced 50% share. Now the subscriber is paying $14/month to watch those two channels instead of the $9/month they were paying for all three channels.

I covered that situation in the paragraph you quoted. Yes, some individual channel prices may go up in some cases. But, they can't go up much due to supply/demand. Also, if you are correct that people want all those channels, then there would be no reason for prices to go up. My later case where you get both X and Y for $1 less than what you paid for all 3 is what WILL happen (studies have shown this).

Your later case assumes no rise in price at all for an individual channel once it goes a la carte. I do not find this assumption likely at all.

And even if they did, due to supply and demand, what happens to programming when revenues go down for that channel? They were making $3/month for 2 million subscribers, now they are only making that $3 on 1 million because half the subscribers they had don't choose to subscribe a la carte. They have to make up that lost revenue from somewhere or the programming will soon be in the toilet. What are the options then? Mostly just one, increased advertising on that channel, further degrading the audience experience.

Like I said earlier, I'm not entirely against a la carte, but I think a rigid a la carte system will be a disaster. And don't forget, even in a strict a la carte system, there will be a base cable service fee tacked on to the total bill of the a la carte channels you've subscribed to. The other poster's idea of getting 25 a la carte channels for $25/month is ridiculous.

 

[waggy]

Originally posted by: jjones

Originally posted by: dullard

Originally posted by: waggy
if you really think you are going to get 15 of the top channels for $30 you are nuts.

Why? Just a few years ago we got the 15 top channels, along with 40 other channels for $30/month.

Originally posted by: jjones
This is extremely flawed. People don't watch just X, or just Y, or just Z.

We're talking revenues per subscriber, not total viewing time. Given your numbers, X would have to double prices to get the same revenue from those 50% subscribers. That's $8/month as you say, but that same subscriber also watches Y, who also has had to double the charges for it's suddenly reduced 50% share. Now the subscriber is paying $14/month to watch those two channels instead of the $9/month they were paying for all three channels.

I covered that situation in the paragraph you quoted. Yes, some individual channel prices may go up in some cases. But, they can't go up much due to supply/demand. Also, if you are correct that people want all those channels, then there would be no reason for prices to go up. My later case where you get both X and Y for $1 less than what you paid for all 3 is what WILL happen (studies have shown this).

Your later case assumes no rise in price at all for an individual channel once it goes a la carte. I do not find this assumption likely at all.

And even if they did, due to supply and demand, what happens to programming when revenues go down for that channel? They were making $3/month for 2 million subscribers, now they are only making that $3 on 1 million because half the subscribers they had don't choose to subscribe a la carte. They have to make up that lost revenue from somewhere or the programming will soon be in the toilet. What are the options then? Mostly just one, increased advertising on that channel, further degrading the audience experience.

Like I said earlier, I'm not entirely against a la carte, but I think a rigid a la carte system will be a disaster. And don't forget, even in a strict a la carte system, there will be a base cable service fee tacked on to the total bill of the a la carte channels you've subscribed to. The other poster's idea of getting 25 a la carte channels for $25/month is ridiculous.

exactly!

 

[Canai]

I already have a la carte cable, it's called bittorrent

 

[PokerGuy]

In the a-la-carte model, channels will have to compete for a fixed available "tv entertainment" dollar. The consumer will only spend so much. So basically, they will be forced to keep their prices low or simply get priced out of the market. Channels that can't compete for that entertainment dollar will simply disappear. Sounds like normal free-market mechanism working to me.

Another thing that many fail to mention is that when you have packaged deals, the cable/sat company can steadily increase their prices each year, and you really don't have a lot of options -- it's either go along with each $1-$2 increase, or go without any cable/sat (just free OTA). With a-la-carte, the consumer can have the option of saying "hmm, you know, I really don't think MSNBC is worth $5, I think I'll keep the rest, and eliminate it from my list and keep my bill where it is today. In other words, consumers will have more control on the total cable bill. Yet another reason the cable/sat companies and content producers are against this -- they'd rather just keep steadily increasing the prices.