FCC Says 'a la Carte' Cable Can Now Help Save Money

[PokerGuy]

I for one am all for the 'a la carte' selection. It allows me to select those channels that I want, without being forced to contribute to other channels that I think should not exist.

Let everyone pick, and you get to decide what is "worth it". It makes for a truly free market system -- every channel becomes a value proposition to each customer. You get to decide if $5 for ESPN is worth it, or that you might rather spend $2 on the food network and $3 on nickolodeon.

I look at it this way -- what provides me with more choice: being able to specifically select what channels I want to pay for and how much, or having a choice between 2 or 3 "packages" at fixed rates?

Yes, lots of smaller niche channels will go away, and that's fine with me......

 

[kranky]

Of course, the flip side is that channels like ESPN, CNN and the like could decide they are in a very strong position, and charge $10 a month. The cable company won't care, they'll get their "transmission fee" or whatever the fundamental charge is for providing the service. It might not be very long before people are paying the same as they are now but getting only a handful of very popular channels.

 

[Vette73]

Originally posted by: kranky
Of course, the flip side is that channels like ESPN, CNN and the like could decide they are in a very strong position, and charge $10 a month. The cable company won't care, they'll get their "transmission fee" or whatever the fundamental charge is for providing the service. It might not be very long before people are paying the same as they are now but getting only a handful of very popular channels.

NO, in a REAL free market CNN would be dumb to charge a high fee. 1 they lose viewers so the price they can charge for ads goes down and 2nd MSNBC or another news outlet comes in at less then them. CNN would go from being a large TV channel to nothing over night if they did not compete price wise.

Its in viewer intrest to compete like this. I would even say savings would be more then 13% after people started choosing 1 news channel, 1 sports channel, etc... as the other would lower their rate and so on and on.

In the end consumers win and big cable loses. Why do you think they have been fighting this?

 

[FoBoT]

Originally posted by: kranky
they'll get their "transmission fee" or whatever the fundamental charge is for providing the service.

like how natural gas was de-regulated in many states. the local gas company became the "pipe" only and the content (gas or TV channel content) is billed directly from the provider.

so you pay your local gas company (pay your cable company) a set monthly fee for the "pipe" and then pay a seperate bill to the actual gas supplier/TV channels (or a billing service/conglomerator)

interesting, i think most people would be wishing for the good old days of package deals, but who knows

 

[kranky]

Originally posted by: Marlin1975
NO, in a REAL free market CNN would be dumb to charge a high fee. 1 they lose viewers so the price they can charge for ads goes down and 2nd MSNBC or another news outlet comes in at less then them. CNN would go from being a large TV channel to nothing over night if they did not compete price wise.

Its in viewer intrest to compete like this. I would even say savings would be more then 13% after people started choosing 1 news channel, 1 sports channel, etc... as the other would lower their rate and so on and on.

In the end consumers win and big cable loses. Why do you think they have been fighting this?

First, I have zero love for cable operators. They exploit their monopoly position to the maximum extent.

From the cable operator standpoint, it would cost a lot of money to update their systems to accommodate that type of billing. Billions would have to be spent on digital set-top boxes that everyone would need. Some of that would be offset by the increased rental fees, but some would be added to the charge for providing cable - some say an additional $12/month.

There are others who don't want a la carte pricing. Niche channels and minority channels would not survive. The local advertising that cable operators get today from companies that advertise on the niche channels would be gone, leaving the operators to make up the difference by jacking the overall rate up. And forget seeing any new channels - who would sign up for a channel they've never seen? The only people in a position to launch new channels would be the giant media conglomerates who can afford to lose millions every month until they get traction.

Don't underestimate how much certain channels would charge. ESPN, TNT, Discovery, and the Weather channel could just about name their price. ESPN already gets $2.50 a month from cable operators now. Yes, CNN is subject to competition. But what would it cost for a company to create a CNN-size organization from scratch, with equivalent quality? ESPN would rule like Microsoft does. Yes, there's nothing to keep someone from competing, but how?

 

[Vette73]

Originally posted by: kranky

Originally posted by: Marlin1975
NO, in a REAL free market CNN would be dumb to charge a high fee. 1 they lose viewers so the price they can charge for ads goes down and 2nd MSNBC or another news outlet comes in at less then them. CNN would go from being a large TV channel to nothing over night if they did not compete price wise.

Its in viewer intrest to compete like this. I would even say savings would be more then 13% after people started choosing 1 news channel, 1 sports channel, etc... as the other would lower their rate and so on and on.

In the end consumers win and big cable loses. Why do you think they have been fighting this?

First, I have zero love for cable operators. They exploit their monopoly position to the maximum extent.

From the cable operator standpoint, it would cost a lot of money to update their systems to accommodate that type of billing. Billions would have to be spent on digital set-top boxes that everyone would need. Some of that would be offset by the increased rental fees, but some would be added to the charge for providing cable - some say an additional $12/month.

There are others who don't want a la carte pricing. Niche channels and minority channels would not survive. The local advertising that cable operators get today from companies that advertise on the niche channels would be gone, leaving the operators to make up the difference by jacking the overall rate up. And forget seeing any new channels - who would sign up for a channel they've never seen? The only people in a position to launch new channels would be the giant media conglomerates who can afford to lose millions every month until they get traction.

Don't underestimate how much certain channels would charge. ESPN, TNT, Discovery, and the Weather channel could just about name their price. ESPN already gets $2.50 a month from cable operators now. Yes, CNN is subject to competition. But what would it cost for a company to create a CNN-size organization from scratch, with equivalent quality? ESPN would rule like Microsoft does. Yes, there's nothing to keep someone from competing, but how?

But you?re assuming that 'a la Carte' pricing will be the only option. The other plans will still be there BUT will allow some to bet basic cabel (10-15 channels) and add the 2 channels they watch instead of adding a extra $40 to their bill for a couple channels it only adds say $10.

As far as competition. CNN use to be the only news only channel. When everybody saw demand for a news channel we got Fox, MSNBC, etc? If ESPN got very high ratings then more channels would pop up at probable a lower rate. The reason most business runs at a small profit margin is to keep competition out. Its one of the barriers to entry for business. BUT if the profits are above a small amount that means others will want a piece of the pie and jump in. That?s competition, and will drive down prices and keep things competitive. But in a monopoly they, cable operators, don?t care.

 

[myusername]

Why should I pay for something I don't watch? If you're going to go ahead and sell a la carte channels, why not meter them and bill by usage? There's no reason for me to have to pay for whatever the hell is on Comedy Central at 5 in the morning.



(that was tongue in cheek. I cancelled cable over a year ago, and the only things I miss are Adult Swim and The Daily Show. Not worth it even if I could order just those 2 channels)

 

[PokerGuy]

I think more competition is almost always a good thing. Competition between channels will keep the price low. If ESPN decides to charge $10 a month for the channel, then I tell them exactly what I said to HBO : "not worth it, thanks but no thanks", and I'll pick other channels.

The reality is that nobody knows what is really going to happen when it all shakes out, but I suspect that the force of competition will lower prices. The only time the free market does not help lower prices is when somehow the market mechanism is not functional (because of legislation, a monopoly, whatever). If the channels are forced to compete for the consumer $, pricing overall should come down.

I don't think the analogy of ESPN to MS holds. MS is a monopoly because for most people a PC is a must, and for the non-computer-geek there isn't a viable alternative to MS. For TV entertainment though, ESPN is a force, but there are plenty of alternative choices.

 

[PingSpike]

Originally posted by: shimsham
id rather see them open up the market like they did with dsl. i think it would be better(cheaper) to have companies compete for my business than having only one comapany available for my cable needs and me choose channels.

This is the real root of the problem.

 

[PingSpike]

Originally posted by: Linflas

Originally posted by: kranky
You will be able to save money. At the same time, dozens of cable channels would cease to exist because they couldn't generate enough revenue from individual subscribers to cover their costs.

You'd get all the shopping channels free (since cable operators get kickbacks on items sold to their customers) of course. The local authorities will force them to carry C-SPAN and public interest channels too. After that, expect to see a lot of channels disappear.

I guess it comes down to whether you'd rather pay $45 for 70 channels, or $39 for 17 channels. Yes, you'll save a few bucks, while losing over well over half the channels.

Exactly. This will be the kiss of death to all the little niche channels that don't attract a wide viewership.

If no one watches these channels...why are they even on the air?

 

[xanis]

Sounds pretty good, but you would be sorry if you watch certain channels on occasion, then decide to not get them, and then you can't watch them. Might suck...

 

[Sphexi]

"a la carte" has always been a way to save money, the cable companies will never allow it. A large number of the channels wouldn't be ordered, since nobody really watches them now.

 

[Fingolfin269]

Don't the cable companies pay the 'channels' per subscriber? So, technically, if the cable companies continue to charge the same proportional rate wouldn't your cable bill drop? Sure, Garden TV might cost $.20 while ESPN might cost $3 but $.20 x 50 channels I don't need adds up. Hell, all I want are the HD channels and G4TV and whatever little sports channels I can get.

Also, you need to look at this from a different perspective. We might actually have more control over bringing certain channels to markets that would otherwise not have those channels. I would like to have ESPN U but my cable company doesn't care it at this time. With a la carte I might be able to just order it up tomorrow.

 

[Anubis]

Originally posted by: kranky
You will be able to save money. At the same time, dozens of cable channels would cease to exist because they couldn't generate enough revenue from individual subscribers to cover their costs.

You'd get all the shopping channels free (since cable operators get kickbacks on items sold to their customers) of course. The local authorities will force them to carry C-SPAN and public interest channels too. After that, expect to see a lot of channels disappear.

I guess it comes down to whether you'd rather pay $45 for 70 channels, or $39 for 17 channels. Yes, you'll save a few bucks, while losing over well over half the channels.

yes 1/2 woudl be gone he 1/2 i never watch anyway, hell i currently have the 8$ cable plan from comcrap, i get about 20 channels 5 of which are in spanish, i dont really need anymore then that

edit: well now i need ESPN or NESEN because the Red Sox games arnt gonna be on WGBH anymore 🙁 and id need ESPN for MNF