New FCC report advocates a la carte TV pricing [Text View]

Y-ASK

11-30-2005, 11:01 AM

Did a search for this title and found nothing. So don't kill me if someone already posted this :).

http://news.com.com/New+FCC+report+advocates+a+la+carte+TV+pricing/2100-1034_3-5975559.html?tag=nl

I would love to see this happen. I'm tired of paying for channels that I never watch. I'd probably be bummed if DTV did not carry a channel that I currently watch regularly but I'm sure something else would come along. I also think that DTV would be able to offer a much larger selection of channels than the cable company. But then who knows, the whole pricing structure might have to change. I mean cable companies would have to change all of the their contracts with the providers and I'm sure some shows will receive less cash since they would have less subs.

Y-ASK

JimSpence

11-30-2005, 11:10 AM

For those that want to read more about this, go here.
http://www.avsforum.com/avs-vb/showthread.php?t=610066

smark

11-30-2005, 11:15 AM

Actually they just want a family friendly tier. And any costs say that ESPN will pass onto the cable company since they usually discount it to carry ESPN2 etc will be passed on to the consumer. That means those who want to watch ESPN will be paying around probably $3-4 dollars.

ZeoTiVo

11-30-2005, 11:16 AM

interestingly enough last year under Michael Powell the FCC did a study that came to the opposite conclusion that this would utlimately hurt consumers.

A year changes everything at the FCC.

If I could point to channels to drop from my lineup and pay less, I would think that was great. But I wonder what channels like the History channel would have to do to "sell" themselves on their own.

edit - oh yah, the article in the paper said a little about the family friendly tier as well. My kids have that on the upstairs TiVo as I just deselect channels they should not watch and go over with them what their TiVo will record.

and lets face it, if you went to picking each channel, the family friendly stuff would take the hit while things like skinemax are already doing just fine.

smark

11-30-2005, 11:21 AM

Y-ASK

11-30-2005, 11:37 AM

2. You won't be paying less in general.
Well that's the deal breaker for me. If I'm paying the same monthly fee for fewer channels then what's the point, other than it might be good for a family that can't control their kid and expects the Govt. to do everything for them...?

But consider this, why can't ESPN offer you the discount rate if you choose to get both ESPN and ESPN2 and even ESPN-Classic. If it cost me $5 now and I choose to get all three for $5 instead of ESPN for $3 or ESPN2 for $2 or ESPN-Classic for $2 that would work out wouldn't it. So what if Lifetime channel goes away. Or the Hallmark channel (I'm pretty sure my wife would keep that one).

If the big providers can offer the cable or sat folks a deal, they can also offer the consumer a deal too.

Y-ASK

lajohn27

11-30-2005, 11:39 AM

Here in Canada from what I can tell.. the cableco gets to decide what they want to put on the basic tier (ie: channels like ESPN/ESPN 2 etc).. and what they want to put on a digital tier (Space Channel / History Channel etc)

In the digital tier there are 'packages' and you can also do packages of 5, 10, 15 or 20 channels.. or you can take 'all' channels in a package at a reasonable discount.

So basically you can pick and choose from the digital tier packages as you like within the structure noted above...

And some channels may appear in the basic tier of one cable system but not the basic tier of another.. its entirely up to each cableco.

This has resulted in an explosion of specialty channels on the digital tier. It's likely that some of them won't survive in the long run.. but.. that's life eh?

ZeoTiVo

11-30-2005, 11:44 AM

what's the point, other than it might be good for a family that can't control their kid and expects the Govt. to do everything for them...?
:p that is a classic line.

classicsat

11-30-2005, 11:57 AM

It will work, it kinda does in Canada. Channels are organized in mini packages of 5-10 channels, with an individual price, something like $4.99 (on top of a base tier, and better deals with groups of packages. Newer channels are individually purchasable, on top of the base tier. or a package group. This aplies to my satellite provider, Starchoice.

Y-ASK

11-30-2005, 12:04 PM

:p that is a classic line.
Thanks for noticing :)! The History Channel is one of my favorite and would be near the top of my list along with The Discovery Ch, Military Ch, Sci Ch, I would be happy to go with a very basic subscription list and then add channels in 5 increments. I bet you'd find that most of the channels would not go away and the ones that did were just taking up valuable space and bandwidth that could be used for something else.

Y-ASK

Gregor

11-30-2005, 12:38 PM

What people don't understand is that:

1. Less viewed channels will die as they will not have the penetration they get from being on basic cable for example since they are supported by ads which inturn are governed by how many viewers they are available to/ratings. Say SCIFI or Bravo could have an issue and it would be harder for new channels to be able to survive as well.

2. You won't be paying less in general.

1&2 reflect the cable industry's opinions as well.

We'll have to wait and see what the market will bear, just because a channel dies isn't necessarily a bad thing. Venture capitalists will be more careful about funding a new channel without guaranteed carriage.

Personally, I'd like to see exactly what I am paying for. I resent the fact that I'm paying for Disney and Nickelodeon for example and I never watch those channels.

jlb

11-30-2005, 12:52 PM

edit - oh yah, the article in the paper said a little about the family friendly tier as well. My kids have that on the upstairs TiVo as I just deselect channels they should not watch and go over with them what their TiVo will record.

Be careful......all that does is prevent TiVO from recording on those channels, displaying guide data for those channels, and showing those channels if you are surfing/channel up/down. However, I believe one could still manually enter a channel number to view it in the live buffer. As kids get older, they will figure these things out.

timr_42

11-30-2005, 12:52 PM

I think a lot of channels would die. Personally, I could remove over 50% of the channels I get and never miss them. If everyone is like that, channels would dropped. I think that could be bad, as some channels that I might like, might not be liked by most and be dropped.

Atomike

11-30-2005, 01:15 PM

it might be good for a family that can't control their kid and expects the Govt. to do everything for them...?

I don't think you understand parenting. Kids are naturally curious - even with proper upbringing. Good parents don't expect the government to do things for them - they just wish the government and cable companies wouldn't pander to the perverts out there. Rather the goverment should help families. Good families shouldn't have to tolerate the near-porn on some channels just because many losers like it and choose to objectify women for selfish reasons. True men don't do that - so why do the rest of us have to jump through hoops to get quality programming?

ZeoTiVo

11-30-2005, 01:32 PM

Be careful......all that does is prevent TiVO from recording on those channels, displaying guide data for those channels, and showing those channels if you are surfing/channel up/down. However, I believe one could still manually enter a channel number to view it in the live buffer. As kids get older, they will figure these things out.

I use an SD H400 for them with controls on the front and have put the remote away. mostly so they do not lose it as they are not exploring much anyway but it keeps them from changing channles as well.

there is no cable hooked to their TV.

as for jumping through hoops - there are parental controls and v-chips in most devides now adays. It is very easy to block out channels, you can even jump a samll hoop and do as I did above. I reject going to individual channels solely as a means to censor things. What is next? two seperate internets ?

dswallow

11-30-2005, 01:44 PM

I would love to see this happen. I'm tired of paying for channels that I never watch. I'd probably be bummed if DTV did not carry a channel that I currently watch regularly but I'm sure something else would come along. I also think that DTV would be able to offer a much larger selection of channels than the cable company. But then who knows, the whole pricing structure might have to change. I mean cable companies would have to change all of the their contracts with the providers and I'm sure some shows will receive less cash since they would have less subs.
It's that other people pay for the channels you want to watch, whether they want to or not, that keeps the price you'd have to pay for them down to something minimal. Once you stop paying for channels you don't want to watch, so do others. And then you'll be paying a lot more for the channels you want to watch... not the $0.10 or $0.12 per month each you might hear about, but 10 or 20 times that each.

TerpBE

11-30-2005, 04:28 PM

interactiveTV

11-30-2005, 05:02 PM

I don't think you understand parenting. Kids are naturally curious - even with proper upbringing. Good parents don't expect the government to do things for them - they just wish the government and cable companies wouldn't pander to the perverts out there. Rather the goverment should help families. Good families shouldn't have to tolerate the near-porn on some channels just because many losers like it and choose to objectify women for selfish reasons. True men don't do that - so why do the rest of us have to jump through hoops to get quality programming?
Called a V Chip. It's amazing how many parents don't bother to use it.

"losers" like near porn? I love when I see the breakdown for shows like Desperate Housewives and the "Bible Belt" comes in nice and strong. You went there, I didn't...

But really, the Government GAVE you an option. It's the V Chip in your TV. If you can't read the manual and figure it out, perhaps the Government should invest in literacy campaigns and not censorship.

For the record, I like TV, porn, and God and sometimes the Government. What they all have to do with one another is another matter...

http://www.fcc.gov/vchip/

Read, THEN tell me why we need MORE control than that.

_ITV

jsmeeker

11-30-2005, 05:13 PM

Great. Higher prices. The apartment complex is moving to Comcast in the middle of next month. To getthe exact same service (i.e. the same channels via TiVo friendly analog cable) will cost almost DOUBLE!! $21.65 per month to $40 per month. Rather shocking. And they tell us we are gettting a DISCOUNT from Comcast. :rollyes:

Is this what people are paying for analog, expanded basic? It seems so high to me. Going ala-carte would mean even higher prices to get the same thing. Even if I wanted to dump channels I didn't want to watch, it would STILL cost more.

JimSpence

11-30-2005, 05:18 PM

I'm not totally convinced that a-la-carte will work well.

What DirecTV needs to do to attract more subscribers is to reinstitute, and advertise, the old Select Choice package. I guess it's called Total Select now, or something like that. But, it isn't advertised. Then they need to create at least two other tiers besides the premium ones.

And, they need to allow us without locals to be able to order WB and UPN.

HDTiVo

11-30-2005, 05:39 PM

It's that other people pay for the channels you want to watch, whether they want to or not, that keeps the price you'd have to pay for them down to something minimal. Once you stop paying for channels you don't want to watch, so do others. And then you'll be paying a lot more for the channels you want to watch... not the $0.10 or $0.12 per month each you might hear about, but 10 or 20 times that each.

You mean I'll have to pay for the programs I don't watch on the channels I do watch? No, I just want to pay for the programs I watch, and in some cases just the parts that I watch of programs I watch. :)

PPPV - Pay Per Part Viewed

Y-ASK

11-30-2005, 07:44 PM

bryan314

11-30-2005, 08:00 PM

dswallow

11-30-2005, 09:23 PM

[...] say you're paying $10 for 10 stations. Thats the cost for running all the stations. If chosen separately individually market forces would raise or lower individual prices but the net cost would be the same. So if I choose 4 station I may be paying $7 dollars. More per stations but still a lower total cost.
I think there's some seriously bad guesswork going on with how prices might fall in a true a la carte system.

Either there'll still be a level of bundling, much like is done in Canada with Star Choice or ExpressVu, or you'll see pricing skyrocket per channel... the advertiser supported stations need potential viewers but also often can't support themselves just on advertising revenue. They can entice you to watch a program if you get their channel, but if you don't get their channel, there's a lot less chance they can get you to watch any program on it. A channel that might be costing $0.05 - $0.10 per subscriber when it's included on a base tier could end up costing $3-$4 per subscriber if they have to try to survive on such revenue alone. If they get bundled ina mini-bundle with 5 or 6 other channels, at least some of which are highly popular, maybe that could go down as low as $0.40-$0.50 per subscriber.

Gregor

11-30-2005, 10:27 PM

Let's say the average person watches 5 channels (just a number I pulled out of the air). I'm sure the "a la carte" would be priced so that to get 5 channels it would cost at least as much as the current "basic cable", so the company doesn't lose money. If you watch 1-2 channels, great, but if you watch more than 5, you're going to be paying more money than you do right now.

How can you say that? Some channels the cable companies get paid to carry.

According to this source, the average is 17.

http://www.twincities.com/mld/twincities/business/technology/13287500.htm

HDTiVo

11-30-2005, 10:51 PM

The staff is now finalizing a report that concludes that the earlier report relied on problematic assumptions and presented incorrect and incomplete analysis.

What will the next report conclude? :)

On the face of it, a la carte ought to create competition between channels and lower prices on a macro level. On the micro level, some people would pay more and others less.

On the other hand, how would the pricing power change between the buyer and seller? The buyer would change to the individual, not the cable company. The cable company has an incentive in many cases to fight for lower price on a collective basis (like a labor union) so rates aren't so high; because there is some competition with satellites, free broadcast and others; because it leaves more money for the provision of service charges; because it makes the local franchise issuing authority happier; etc. One big bargaining chip a cable co. has that the individual does not is the threat of dropping the channel entirely - taking thousands or millions of subs off in one shot.

Suppose cable channels were unbundled from cable service itself - like electricity is from generation and transmission. The cable co. becomes a utility which charges for the use of its plant. With 1000+ possible channels on the wire, there could be a must carry like requirement by law, giving all cable channels access to all cable systems.

Now the channels decide what they want to charge and people select from the menu. What will happen to price? Maybe much higher, so you only save money if you take few channels. Maybe much lower out of desperation to keep everybody subed to you channel and ad revenues up. Probably both strategies will be used.

What about several channels owned by the same company? Bundle pricing there? Bundle joint ventures between companies with complementary offerings?

What about prices on channels owned by the cable co that services you? What about channels owned by multiple cable cos. even sometimes combined with ownership by other parties?

Economic theory is limited. The practical reality of the complex relationships within the industry is very important. What are the details of the methodologies used in the studies and how did they consider the dynamics of the circumstances; and how might those circumstances change once a la carte was implemented (mergers, JVs, etc.)

Perhaps in the end the most effective way to bring down prices will be to have multiple TV services providers for individuals to choose from and let those service providers each bargain hard with the channels.

ack_thbbft

11-30-2005, 11:07 PM

*cough* V-Chip! *cough*

That's what it's there for. Use it.

'Nuff said.

Gregor

11-30-2005, 11:10 PM

<snip>

Suppose cable channels were unbundled from cable service itself - like electricity is from generation and transmission. The cable co. becomes a utility which charges for the use of its plant. With 1000+ possible channels on the wire, there could be a must carry like requirement by law, giving all cable channels access to all cable systems.
<snip>

Must carry already exists for local broadcast stations, no?

mike3775

11-30-2005, 11:18 PM

Its funny. TV's have had the V chip for years and people still do not know how to use it?

All 5 of my kids and 3 step kids TV's in their rooms have V chips, and nothing that is rated above TV-G is allowed to be seen. I have it set not only on the TV, but also the cable boxes. And my oldest has tried to get around to changing the settings, but unless he figures out what my 5 number password is, he can't do it. And its not a simple number that is obvious either.

smark

12-01-2005, 01:05 AM

What will the next report conclude? :)

On the face of it, a la carte ought to create competition between channels and lower prices on a macro level. On the micro level, some people would pay more and others less.

On the other hand, how would the pricing power change between the buyer and seller? The buyer would change to the individual, not the cable company. The cable company has an incentive in many cases to fight for lower price on a collective basis (like a labor union) so rates aren't so high; because there is some competition with satellites, free broadcast and others; because it leaves more money for the provision of service charges; because it makes the local franchise issuing authority happier; etc. One big bargaining chip a cable co. has that the individual does not is the threat of dropping the channel entirely - taking thousands or millions of subs off in one shot.

Suppose cable channels were unbundled from cable service itself - like electricity is from generation and transmission. The cable co. becomes a utility which charges for the use of its plant. With 1000+ possible channels on the wire, there could be a must carry like requirement by law, giving all cable channels access to all cable systems.

Now the channels decide what they want to charge and people select from the menu. What will happen to price? Maybe much higher, so you only save money if you take few channels. Maybe much lower out of desperation to keep everybody subed to you channel and ad revenues up. Probably both strategies will be used.

What about several channels owned by the same company? Bundle pricing there? Bundle joint ventures between companies with complementary offerings?

What about prices on channels owned by the cable co that services you? What about channels owned by multiple cable cos. even sometimes combined with ownership by other parties?

Economic theory is limited. The practical reality of the complex relationships within the industry is very important. What are the details of the methodologies used in the studies and how did they consider the dynamics of the circumstances; and how might those circumstances change once a la carte was implemented (mergers, JVs, etc.)

Perhaps in the end the most effective way to bring down prices will be to have multiple TV services providers for individuals to choose from and let those service providers each bargain hard with the channels.

For the billionth time, in most areas companies are free to overbuild our network much like Verizon is (plus sat competition). We built our network with our own money and so should anyone else who wants to serve customers. It is just expensive.

smark

12-01-2005, 01:14 AM

How can you say that? Some channels the cable companies get paid to carry.

According to this source, the average is 17.

http://www.twincities.com/mld/twincities/business/technology/13287500.htm

Really the only channels are just starting out or shopping channels.

Yeah, the average is $17 but at 1.50 to 2 a channel you start looking at $25 - 34 and I'm sure the 17 includes the expensive channels like ESPN, ESPN2 so price I mentioned would probably be higher. Not to mention that the 17 "average" includes those with limited service which are pretty much locals (NBC, ABC, CBS, FOX, WB, UPN), Discovery and the Weather Channel as well as CSPAN1/2.

Like the article says, if anything there would just be more packages but it will most likely require a cable box as it would drive costs up the roof to be rolling out and trying to trap out channels for ala carte.

mike3775

12-01-2005, 01:15 AM

The main problem is, the same companies own the majority of cable lines. Comcast owns every single cable company in my area, when just 10 years ago, there were 4 different cable providers for each major area. At&T bought them all up slowly, then AT&Twas bought by Comcast.

So really, if these ala carte prices were to kick in, it just gives Comcast more reasons to raise prices.

I have the highest package available on Comcast($89.99) for every single channel that they offer on package deals, but that doesnt include the 10 channels that they charge monthly fees for either. Thats BS IMO, because I'm already paying for all of their package channels, and if they end up unbundling them, Comcast will simply force me to pay more than I am now.

ZeoTiVo

12-01-2005, 01:19 AM

my local paper had an article on this and included the report that the FCC would do nothing with this report beyond publish it. Nothing sent to capitol Hill asking for legislation on this etc.. I am sure the cable cos will ignore it and I doubt the Family friendly lobby will get much traction for something like this.

I think the iTunes way of pushing out shows a la carte will have a lot more traction than this legislative/logistical monster ever would. But if 1.99 an episode is the prevailing charge then most will not go that route either.

basically I like having 30-40 channels with various content because I have a TiVo that will pull what I wnat from them and I do not care what channel is what for the most part.

interactiveTV

12-01-2005, 10:07 AM

For the billionth time, in most areas companies are free to overbuild our network much like Verizon is (plus sat competition). We built our network with our own money and so should anyone else who wants to serve customers. It is just expensive. Well, yes and no. The franchise agreement issue is pretty substantial and I don't know of any state, besides Texas after much Verizon lobbying, that has simplified the process by allowing new video service on a statewide (rather than community) basis.

The oft-touted requirement that service be offered universally with a community -- while I understand the rationale that wealthy apockets shouldn't be the only targeted -- has been a major stumbling block as build-outs don't really work that way. And the sometime strange demands communities have made of the overbuilders can also slow the roll-outs (school TV stations, etc).

If New Jersey and California follow Texas and franchise agreements become statewide, your statement above will be accurate. As it stands, the cable networks were built with monopoly protections (and regulated pricing) but the risks were substantially lower. Merely BUILDING the network does not permit video service. The franchise agreement is the second -- and critical piece -- that cable companies have been fighting to not be granted to the bells.

It would be nice if cable companies truly believed that anyone willing to build the network should be allowed to offer service. It's not and the lobbying money spent during the franchise agreement fights is substantial.

In terms of a la carte pricing, it's ESPN that costs the most and is probably only truly demanded by less than 20% of cable customers -- I'm guessing so anyone with harder info, please share. I believe the shift on Monday Night Football to ESPN was partially with this concern in mind. I'm also unconvinced a la carte would actually lead to lower cable costs. I'm torn with some different arguements but I agree mostly with HDTivo with the theoretical economic analysis. In NYC, with no true DBS coverage, I'd love to see wired competition.

I have no illusions about Fios digging up the NYC streets in the future but I also think USA broadband speed are pathetic compared to other countries and that we're falling behind in some important respects. That higher broadband and increased video competition go hand in hand is obvious as the two revenue streams will need to be leveraged together in order to come close to a positive ROI. On that basis alone, I'd like to see the local franchise agreement crap go away.

_ITV

faspina

12-01-2005, 02:31 PM

Called a V Chip. It's amazing how many parents don't bother to use it.

"losers" like near porn? I love when I see the breakdown for shows like Desperate Housewives and the "Bible Belt" comes in nice and strong. You went there, I didn't...

This is more than about protecting childre.It's about paying for something you don't want.

I have analog cable and 2 tivo's. Take MTV and VH1 for example. I have 3 kids under 8, my wife and I don't watch those channels at all. Yes we don't like the programming, yes we can block it from the kids, yes we think it distastful. But I feel like part of my $40 a month goes to supporting these channels. Better yet, I am getting sometong for $40 I don't want.

I like ESPN, HISTORY, ESPN2 DISCOVER, NICK, I'll pay for those. But some channels never have what I want to watch. Yet, I feel like I am paying for them.

If given the option and a decent savings, I would not pay those I don't watch. Right now I don't have that choice

It's pretty simple really.

Justin Thyme

12-01-2005, 02:37 PM

Perhaps in the end the most effective way to bring down prices will be to have multiple TV services providers for individuals to choose from and let those service providers each bargain hard with the channels.For this to be practical, what you would need is the ability to buy a box that can access multiple carriers. Internet, cablecard, but- woops I forgot. Satellite carriers are still under their decade old "temporary" exemption from the 1996 that required that third party devices have direct access to their networks.

So you would not be able to drop a cable channel and pick from either of your satellite providers a replacement channel that provided more bang for the buck.

Somehow this concept of competition would be bad for consumers.

Maybe next decade the concept will get some traction.

That Don Guy

12-01-2005, 03:12 PM

Why don't the cable companies just set the a la carte prices high enough to cover the cost of having to offer the ability in the first place? (Or does somebody feel that this would defeat the purpose of a la carte cable in the first place?)

It's not a question of "remove ESPN and give me a refund"; if you want a la carte channels, you have to pay for them separately. When you go to Burger King and order a Whopper value meal, you don't get to say, "delete the fries and refund its cost back to me"; you have to pay full price for the burger and drink.

*cough* V-Chip! *cough*

That's what it's there for. Use it.
The problem is, ratings can be arbitrary.
Watch The Simpsons on a regular basis? Did you see the one where Marge's sister Patty was going to get married to another woman? Not if your V-chip was set to TV-PG, you didn't (somebody decided that 13-year-olds were too young to hear about same-sex marriage and rated that ep TV-14).

-- Don

mike3775

12-01-2005, 03:32 PM

Why don't the cable companies just set the a la carte prices high enough to cover the cost of having to offer the ability in the first place? (Or does somebody feel that this would defeat the purpose of a la carte cable in the first place?)

Hyupothetically, lets say that my Comcast pays $2 per every channel they recieve. They would in turn charge $4 for those channels. Guess what, the customer is paying Comcast's fees and Comcast gets richer, and the Cable Bill will be higher than it currently is as well, because not every channel would be $2

In fact, at those prices, I would end up paying more with ala carte because I have 60 channels I like right now. That would be a minimum of $120. I currently pay $90 for more channels.

lajohn27

12-01-2005, 04:44 PM

What's missing from this discussion is that the cost per sub for most channels on the basic tier.. is pennies. Literally.

MTV / VH1 and the like.. they do not cost 2$ per sub / month. Not even close.

And yes.. some channels that are new.. actually pay for carriage sometimes (rarely).

And as I noted previously in this thread.. the cable ops could offer channels in packages that the customer builds. For example.. divide channels along cost lines in to three groups A B C.

A given customer-built package might allows so many channels from A, so many from B and so many from C. (for example)

This works well in Canada and still can keep costs down for the operator.

mike3775

12-01-2005, 04:58 PM

Yeah it would keep the costs down for the cable companies, but you really think the cable companies would pass that on to the customers?

Comcast wouldn't. They would lose money if they did that, and everytime something claims to save customers money, my cable bill actually goes up, because some other fee gets raised to replace what they lost in the other area.

I have not changed my service with Comcast in 4 years, I still have the same channels and packages they offer. 4 years ago, my monthly bill was $97 every month(for internet and digital cable), 3 years ago it was $103 for everything, 2 years ago $115 for everything, and now its at $125 for everything each month. Yet in that same time fram, there were price reductions onservices they offered, yet my bill actually rose with those price reductions. Amazing how that works isn't it?

So I am not being fooled into believeing ala carte pricing is going to lower bills, because I know damn well that Comcast will find a way to get even more money out of me without me changing anything I already have through them.

bryan314

12-01-2005, 05:11 PM

And the television networks wonder why people are flocking to bitorrent. :(

interactiveTV

12-01-2005, 06:45 PM

This is more than about protecting childre.It's about paying for something you don't want.

I have analog cable and 2 tivo's. Take MTV and VH1 for example. I have 3 kids under 8, my wife and I don't watch those channels at all. Yes we don't like the programming, yes we can block it from the kids, yes we think it distastful. But I feel like part of my $40 a month goes to supporting these channels. Better yet, I am getting sometong for $40 I don't want.

I like ESPN, HISTORY, ESPN2 DISCOVER, NICK, I'll pay for those. But some channels never have what I want to watch. Yet, I feel like I am paying for them.

If given the option and a decent savings, I would not pay those I don't watch. Right now I don't have that choice

It's pretty simple really. The post I responded to was about parental control, NOT pricing.

As for you not wanting to pay for MTV, there are many who don't want to pay for NICK. I'm just not convinced it will be CHEAPER for you to get the channels YOU want...

Especially with ESPN in there. At what? Over $2/month (source: Kagen, $25.90 for the 2004 year). If ESPN loses 60% of its base -- I estimate it could be higher-- you'll see ESPN alone at $5/month if they want to keep that revenue coming and the price elasticity might lose a few more subs.

I guess my question is, are you so opposed to paying part of your $40 to support channels to don't watch that you would be willing to pay MORE? Is this a moral or an economic arguement? I'm not saying it WILL be more, just trying to understand your POV.

_ITV

HDTiVo

12-01-2005, 10:36 PM

For this to be practical, what you would need is the ability to buy a box that can access multiple carriers.
I had not thought so far ahead to simultaneously choosing channels from multiple service providers, only pick one of multiple providers and choose your channels. Maybe Cable Card 3.0 ;)

Other thoughts:

Wouldn't single person households generally benefit more (esp. single non-ESPN watchers.) Another marriage penalty.

Its useful to think about the twenty year history of the AT&T breakup. Long distance becoming a zero revenue business; the death of the long distance providers; the position the local bells have as the physical connection to the customer; the pitfalls of requiring the piggybacking providers on the physical network; the lack of multiple physical local netwroks; the journey of local bells into long distance.

mike3775

12-01-2005, 10:42 PM

ts useful to think about the twenty year history of the AT&T breakup. Long distance becoming a zero revenue business; the death of the long distance providers; the position the local bells have as the physical connection to the customer; the pitfalls of requiring the piggybacking providers on the physical network; the lack of multiple physical local netwroks; the journey of local bells into long distance.

And also how many of them also have remerged as well.

HDTiVo

12-01-2005, 11:04 PM

It might also be useful to look at cable in the DVR era in another way.

I no longer think of cable as broadcast TV with more channels. I think of cable as a huge pipe simultaneously delivering numerous types of drinks from which my DVR can take sips or glasses which I eventually enjoy.

What this means is I think of cable with DVR as very much a VOD or Download on Demand (DOD) service.

Traditionally, broadcast channels only show a show once in the week, and repeats, if any are several months later. Cable channels have a tendency to repeat programs several times in a week; Movie channels have multiple digital channels starting movies and shows at short interval offsets; which means there are multiple opportunities in a short time frame to get those drinks.

Extend that out to a Cable Industry model where all the channels put out all their programming repeatedly (and with 1000 physical channels, 200+ program providers can have up to 5 streams each.) You really get close to VOD/DOD.

Beyond that, it is time to start evolving traditional thinking away from channels and more toward things like content creator brands, content type, etc. There is ultimately no need for channels per se (ie. SciFi) but for a "SciFi Programmer" which provides SciFi content to the cable co., which in turn pours it constantly through its fiber/coax pipes.

Now what would you want to pay for if that happened, and which would be cheaper: a flat "all you can eat" monthly fee allowing you to pick anything out of the "ether;" or pay per show viewed/captured by the DVR?

smark

12-02-2005, 01:06 AM

Well, yes and no. The franchise agreement issue is pretty substantial and I don't know of any state, besides Texas after much Verizon lobbying, that has simplified the process by allowing new video service on a statewide (rather than community) basis.

The oft-touted requirement that service be offered universally with a community -- while I understand the rationale that wealthy apockets shouldn't be the only targeted -- has been a major stumbling block as build-outs don't really work that way. And the sometime strange demands communities have made of the overbuilders can also slow the roll-outs (school TV stations, etc).

If New Jersey and California follow Texas and franchise agreements become statewide, your statement above will be accurate. As it stands, the cable networks were built with monopoly protections (and regulated pricing) but the risks were substantially lower. Merely BUILDING the network does not permit video service. The franchise agreement is the second -- and critical piece -- that cable companies have been fighting to not be granted to the bells.

It would be nice if cable companies truly believed that anyone willing to build the network should be allowed to offer service. It's not and the lobbying money spent during the franchise agreement fights is substantial.

In terms of a la carte pricing, it's ESPN that costs the most and is probably only truly demanded by less than 20% of cable customers -- I'm guessing so anyone with harder info, please share. I believe the shift on Monday Night Football to ESPN was partially with this concern in mind. I'm also unconvinced a la carte would actually lead to lower cable costs. I'm torn with some different arguements but I agree mostly with HDTivo with the theoretical economic analysis. In NYC, with no true DBS coverage, I'd love to see wired competition.

I have no illusions about Fios digging up the NYC streets in the future but I also think USA broadband speed are pathetic compared to other countries and that we're falling behind in some important respects. That higher broadband and increased video competition go hand in hand is obvious as the two revenue streams will need to be leveraged together in order to come close to a positive ROI. On that basis alone, I'd like to see the local franchise agreement crap go away.

_ITV

Have you ever read a franchise agreement? Most generally call for the basic cable rate, the land use, and what the franchise may want in return (public access, I-NET, etc). Other companies can get those agreements, but they need to use their own capital to build their network.

ThomasDrew

12-02-2005, 01:17 AM

yes we think it distastful. But I feel like part of my $40 a month goes to supporting these channels. Better yet, I am getting sometong for $40 I don't want.

.

For the record, I don't watch porn. It's cheezy and boring...

...but I can tell you that the average person is paying, at least in my area, for at least a half dozen religious and/or "family" themed channels.

Believe me, I don't want my money going to support anything spiritual or religious just as much if not more than you don't want "adult" programming.

ZeoTiVo

12-02-2005, 10:45 AM

here is another problem with this that the Holidays bring home.

We visit my In-laws a good bit (4 hour drive)

my Father in law watches FOX news. I watch CNN.
MY in Laws have no personal use for kids channels like Disney and Nick.

so what happens when we visit or they visit.
Father in law has no Fox news fix.

Our kids have no kids shows at the In-laws. Suddenly you might be paying more for a channel like Fox news just to use part time when company comes.

PS - at Time Warner the avg per channel is 83 cents for about 60 channels. I am sure you would not see that rate for individual pricing.

classicsat

12-02-2005, 11:38 AM

For this to be practical, what you would need is the ability to buy a box that can access multiple carriers. Internet, cablecard, but- woops I forgot. Satellite carriers are still under their decade old "temporary" exemption from the 1996 that required that third party devices have direct access to their networks.

The way it could work, IMO, is you would pay one company to bring the cable in your house, for the basic tier and the digital signal, and maybe a cablecard or other access device.

You would then contact third parties to authoise for the cable programs, and they would be competitive with each other in many markets. They would compete on pricing an packaging, the same way the satellite providers do.

This model is what is used on C-band satellite, since the VCII system began at least.

Dawghows

12-02-2005, 12:04 PM

How 'bout leaving the current model in place, and offering the "a la carte" model as an alternative option for those customers who prefer it? So that those people, like myself, who watch a wide variety of programming from lots of channels can stick with what we have, and those people who watch less or are interested in more specific kinds if content can go that route. I don't have much of a mind for business, but at least on the face of it this seems to me like it would help solve both the providers' revenue issues and customers' content issues.

And although this seems like an almost completely different topic to me, since it's being talked about here already I'll just say it constantly surprises me when I read or hear about the poor choices for family viewing. I don't even have kids, but right off the top of my head I can think of at least five kid's channels that I get, and I'm absolutely sure there more that I'm not remembering. And as someone else already pointed out, I know I also receive at least four or five religion channels -- not that "family friendly" and "religion" are necessarily the same thing, of course, but they also aren't necessarily mutually exclusive. Regardless, my point is: How many "family friendly" channels does it take to satisfy this need?

DBCooper

12-02-2005, 01:22 PM

Take it one step beyond that and my TiVo will happily control it all. Only charge me for programs that I record and the two being buffered or watched for more than 10 seconds.

interactiveTV

12-02-2005, 03:52 PM

Have you ever read a franchise agreement? Most generally call for the basic cable rate, the land use, and what the franchise may want in return (public access, I-NET, etc). Other companies can get those agreements, but they need to use their own capital to build their network. Actually, I have...

The fact that many franchise agreements are community based and not statewide and often require service to a vast majority of the community...

and recent franchise applications have met with some strange requirements...

It also takes between 6 and 18 months to negotiate the franchise agreements. Obviously, statewide franchise agreements make much more sense...

"Other companies can get those agreements" is factually correct however, the time and effort is pretty silly especially with the MSOs pushing HARD against state franchise agreements...

I do believe FIOS should be forced to carry the community channels and other requirements written into the local cable franchise agreements. However, that some communities have asked for Verizon to provide television stations for the local community college (build the studio) seems more like extortion than good business.

The franchise agreements NOW are also different than the ones gotten by the cable companies years ago. Most now require ALL cable be buried (whereas prior strung lies could be used in places), etc..

I just believe franchise agreements should be statewide. 40 years ago community based agreements made sense. In 2005, it is a complete joke.

_ITV

mike3775

12-02-2005, 07:44 PM

Well looky here

http://www.msnbc.msn.com/id/10295748/

cable prices are rising yet again. And people honestly think ala carte pricing would be cheaper?

Justin Thyme

12-02-2005, 09:44 PM

Product "Tying" (http://en.wikipedia.org/wiki/Tying) is the practice of selling customers things they didn't ask to buy in order to close competitors out.

Why should I choose to buy History channel via internet from Akimbo if I cannot delete it from my cable line up and save some money?

If I were an Akimbo, there is a huge barrier to entry because Akimbo basically has to offer an entire package comparable to one the cableco offers, in order to get a customer to dump a cableco package in favor of theirs.

That way, the cableco don't have to compete on price and upstart rivals quickly die.

FatherTed

12-02-2005, 10:11 PM

Justin Thyme

12-03-2005, 12:52 AM

Great. That means for all the $3.99 channels, Akimbo can sell them at their cost $1.00 or $1.25 in order to build their subscription base.

Isn't it fascinating how the concept of competition works?

Cableco doesn't feel any pain because not that many people do it (only those with MCE, LinkPlayers, or later Tivos can do it), but small businesses can do quite well on the scraps they get.

smark

12-03-2005, 12:59 AM

The providers would probably want the same from Akimbo as Comcast so I don't see that logic personally. Would it be a niche market? Yes, for those who want to wait for programs to download but John Q. Public still likes to channel surf.

Justin Thyme

12-03-2005, 02:20 AM

The providers would probably want the same from Akimbo as Comcast so I don't see that logic personally.Read what I wrote. Comcast doesn't sell at cost. Akimbo could when it is in investment mode in order to pick up subscribers. John Q. Public still likes to channel surf.But you know that's not going to last very long. John Q. won't go back to that when he catches on to what he's been missing. Or do you believe channel surfing is not an anarchronism?

smark

12-03-2005, 01:58 PM

Oh I agree. Our DVRs are getting snapped up in this market like you would not believe. That coupled with OnDemand has made the churn rate drop significantly.

Justin Thyme

12-03-2005, 02:18 PM

"Laugh while you can Monkey Boy"
-John Bigboote (http://laughwhileyoucanmonkeyboy.ytmnd.com/)
Look in the rear view. SBC, Verizon, Intel, and Microsoft are all highly motivated and highly capitalized parties that want to deliver new distibution paths of video into the home. With the option to buy a la carte and third party navigation devices, Everyone's churn rate goes down, since customers have multiple vendors to choose from.

Comcast doesn't go away in the face of challengers, any more than Chevrolet went away in the 70's when Toyota deliverred the first Corolla's.

Corporate arrogance is death. It is something that it is too late for Chervrolet retirees to do anything about- 2 of them for every one Cheverolet worker producing enough money to cover their pensions.

You can think about it now, or think about it then.

Your choice.

HDTiVo

12-03-2005, 05:19 PM

Today I keep coming back to thinking about the long distance business which eventually became almost "free" - nearly zero marginal revenue.

Would the channels become "free" through competition to keep large sub numbers to get ad revenues? Which ones would and would not? HBO-ish first time content distributors would not, but syndicators (re-runs) would?

Your cable bill might become more a function of whether you've got to see the latest show/movie now or can wait six months, 18 months.

rlcarr

12-03-2005, 05:44 PM

I'm against having the FCC force a la carte. Why? Because I can't see how you can have a la carte without the cable companies scrambling everything and forcing you to use a cable box to get the channels you are paying for.

And that would be really, really lousy. I bought a cable-ready TV and have a cable-ready TiVo for just that reason. I don't want to have to play games with the TiVo having to control the cable box. I want to be able to watch TV via the TV tuner while the TiVo is recording on those occasions where two things I want to see are on simultaneously.

Justin Thyme

12-03-2005, 09:48 PM

I'm against having the FCC force a la carte. Why? Because I can't see how you can have a la carte without the cable companies scrambling everything and forcing you to use a cable box to get the channels you are paying for..What is being proposed not that everyone be forced to buy a la carte, but that consumers have the option of doing that if they want.

Second, cable companies are attempting to phase analog (your "cable ready") connections independent of this or any other issue.

mike3775

12-03-2005, 10:23 PM

Comcast is trying phase out analog all together and get people to digital. So far in the past 4 months, 25 channels that used to be on analog are now on digital in my area, and it has pissed off a lot of people, but there is nothing anyone can do to stop it either.

with Comcast in my area now, if you do not have digital cable, you have no PPV, no HBO, no Showtime, no Cinemax, no The Movie Channel, no Disney channel, no Sci-Fi channel, no Season tickets to any major sports. And in the next 6 months, they plan on moving TLC, Discovery channel, nickelodeon, fox family to digital.

Guess what, if they do indeed move those channels, non digital cable subscribers would have no access to any channels that air childrens programming, and its legal because Comcast does offer those channels, just you have to upgrade to basic digital to get them(another $30 a month on top of the $35 they already charge for having basic)

davezatz

12-03-2005, 10:37 PM

Comcast is trying phase out analog all together and get people to digital. So far in the past 4 months, 25 channels that used to be on analog are now on digital in my area, and it has pissed off a lot of people, but there is nothing anyone can do to stop it either.

Same deal here - Comcast is removing analog channels.

I keep thinking about when/if they move ESPN and Discovery - that will certainly cause an uproar and either slow them down or at least make them consider offering a basic digital plan at the same $50ish rate (analog cable, no box) I'm paying now. At least I hope so. Digital plans start at about $75, plus HD fee, plus box rental which is too much as far as I'm concerned.

For the time being they are offering the major networks in HD free via QAM which is nice. If they ever pull that I can get all but one of those channels via antenna.

An a la carte plan would probably cost me less per month, and perhaps some of the more obscure cable channels would go out of business, but I'm sure Comcast and their ilk would continue to make boatloads of money while providing crappy service.

rlcarr

12-03-2005, 10:40 PM

What is being proposed not that everyone be forced to buy a la carte, but that consumers have the option of doing that if they want.

Ah. But I don't think that'll change anything re: converter boxes, since if they go the scramble-plus-mandatory-converter route to support a la carte, they won't be able to feed non-scrambled to people who buy bundles. Bundle customers will still end up having to use a box :(

But as others have noted, the systems are trying to push everyone to digital anyways (thankfully RCN hasn't really done any of that...yet).

jsmeeker

12-03-2005, 10:52 PM

Dennis Wilkinson

12-04-2005, 02:12 PM

I'm confused. does going a la carte mean that CableCard would not longer apply? If I had a TV with Cablecard, and a cable company that did digital cable was able to give me (rent me or sell me, really) a cablecard, isn't that pretty much exactly like analog cable from a straight usability prespective?

Probably the opposite: a la carte pricing would imply that CableCARD would be even more important. To do a la carte pricing, the cableco would encrypt everything that they could (i.e. everything not a retransmission of local OTA or public-access-type channels mandated by their local franchise) and only authorize the cable boxes/CableCARDs for those channels you've paid for. This is how most of the truly digital portion of cable television works now, it's just that you buy blocks of channels and not individual channels (for most major operators, analog premiums no longer exist -- they've all been moved to digital, meaning that there only "extended basic" needs to be dealt with, usually with a simple in-line RF filter.)

DianaMo

02-09-2006, 02:02 PM

FCC chairman claims cable companies should stop forcing customers to subscribe to channels in "bunches"
by Don Corrigan
http://www.timesnewspapers.com/stories/20060113/cable.html

FCC Changes View on 'A La Carte'
By SIOBHAN HUGHES
DOW JONES NEWSWIRES
February 9, 2006 10:42 a.m.
http://online.wsj.com/article/SB113949907169169617.html

frayedend

02-10-2006, 10:00 AM

I think this is a great idea. I'm sick of paying for channels I don't want. In effect I'm forced to subsidize channels I don't like or want. If a network proves to be unpopular enough that it can't stay in business then so be it. Let it die. If it has any popular programs they'll be picked up by other stations. Increasing the popularity of those other stations, which means more viewers, thus further lowering the cost of those other stations. For example say SciFi went out, (which I doubt since it's a popular station) Battlestar Galactica would be able to find a new home with no effort. Their horrible made for tv movies would die a much deserved death. Another argument; say you're paying $10 for 10 stations. Thats the cost for running all the stations. If chosen separately individually market forces would raise or lower individual prices but the net cost would be the same. So if I choose 4 station I may be paying $7 dollars. More per stations but still a lower total cost.

I haven't read all the posts, but here is my take...

Say you are now paying 60 bucks and get 100 channels. Say you only watch 10 of those on a regular basis, but you may like a show here and there on another channel. Say that Discovery Science happens to be one of your favorites because you are into that kind of stuff... and maybe 4 other channels are cable only based channels... you have kids and watch Disney, your wife is a history buff etc..

First, if the amount of people is not high enough the channel will die. Or it will just cost more. It may now cost 10 bucks just to get the Science channel. By the time you are done you get less channels for the same price. You aren't paying for other peoples channels, we are all buying a volume discount.

Now I am not saying that you might not save a little money, but I'm sure it won't be much. And I personally don't mind spending a little extra to ensure that the channels I like stay on. I could live without the History Channel, but every once in a while Tivo may pick something up that I'm interested in and record it.

Now if I can only get a discount to lose the 7, yes 7, religious channels!!! (I know this is hypocritical from my statements above, but really they are all Roman Catholic Channels, so if there were 7 channels for different religions it would be more justified)

interactiveTV

02-10-2006, 10:33 AM

We'll see how MNF changes things but the the most obvious "loser" in an unbundling scheme is ESPN. It's the most expensive ad-supported channel on all the MSOs (iirc, it exceeds the next 7 ad-supported channels combined).

With ratings that average in the 2.2 range during primetime (spiking to 7+ on the football games), ESPN is going to take a huge hit if unbundled. MNF is a great hedge but if a good percentage of the 90 million ESPN homes opt-out, the pricing curve will get very funky.

ESPN: $2.61/subscriber

NFL Network: $0.19

OLN: $0.12

Average wholesale cost per channel: $0.21

Kagan Research's "Economics of Basic Cable Networks 2006"

_ITV

P.S. here's the form they used: http://www.fcc.gov/omd/pra/docs/3060-0647/3060-0647-07.pdf

Tivo Basic Mike

02-10-2006, 02:13 PM

Boy I am confused on this issue. If I only want to pay for 50 channels the cable co will charge me more for this pleasure? But if I continue to keep 100 channels which of 50 I don't watch I will pay less? I guess its sort of like if I lost one foot I would still have to pay for a pair of shoes.

DianaMo

02-10-2006, 02:33 PM

I wonder if instead of an ala-carte plan, perhaps an opt-out plan would work?

For instance, for the people who want a basic cable plan but don't want to pay/receive ESPN or anything MTV related, they just pay the package amount minus the cost of the channels they want to opt out of.

Really, the cable companies should create better packaging of their channels to fit different interest groups.

For instance, they should offer a premium family movie package that includes HBO Family, Showtime Family Movies, Starz Family and Kids, etc. without needing to subscribe to the other movie channels.

http://www.hbofamily.com/
http://www.sho.com/site/schedules/day_schedule.do?channel=FAM&feed=East&date=2/17/2006
http://www.starz.com

And cable should consider offering a greater variety of channels that offer faith related programming. I see TBN and EWTN, but not the channels I'd like to see like the Gospel Music Channel , Family Net, INSP, JCTV etc.

http://www.gospelmusicchannel.com/
http://www.familynet.com/
http://www.insp.com/
http://www.jctv.org

I'd appreciate the chance to opt-in to having access to these channels.

Would also like to get in the Research Channel, which I've been requesting for quite some time too.
http://www.researchchannel.org/

I have a c-band dish, so I'm used to the idea of ala-carte pricing.

http://callnps.com/alacarte.htm

Did everyone here participate in this survey yet?

If you could have ONLY 10 cable channels, what would they be?
http://www.tivocommunity.com/tivo-vb/showthread.php?t=243068

marksman

02-12-2006, 12:32 AM

I think some people seem to be disregarding the advertising component of cable channels, which in almost all cases is more significant than what they get from being carried by cable companies.

It is not just a matter of ESPN saying, oh well if we have to sell ala cart, we will jack up the price to $10. First of all some people will not get it regardless of the price. Secondly others will balk at the higher price which lessens their number of viewers and their ad revenue.

The reality is unbundling does have the potential to drive prices down via competition because channels can finally have the opportunity to gain audience via price. If E! lowers their price to Comcast to 5 cents a month per sub, it does not get them any more eyes. It does not increase their potential audience, it just makes more money for Comcast.

If they lower their price in alacart, they potentially pick up viewers. And in an alacart set up, people who are paying for a specific channel are probably more likely to watch it.

I am a huge sports fan. I watch a lot of programming on ESPN. I would not pay them $5 a month to get their channel. There is no way no how. In an ala cart system I get to make an individual choice on the value of each channel. To me this is a very good thing.

Sure some channels will die, and some will have to work harder. Nothing wrong with that.

I know my bill would be less per month because I would have the ability to make that so.

interactiveTV

02-12-2006, 10:23 AM

I think some people seem to be disregarding the advertising component of cable channels, which in almost all cases is more significant than what they get from being carried by cable companies....

If they lower their price in alacart, they potentially pick up viewers. And in an alacart set up, people who are paying for a specific channel are probably more likely to watch it.
ESPN can't really "pick up" viewers. They are available in 90 million homes now and those people get it for "free" (unbundled and watch it or not, it comes in your home).

They won't "pick up" viewers by charging less than $2.60/month and advertising won't make up the loss any way you cut it.

Also, ESPN viewers are ESPN viewers. Pay for it or not, for a small segment it's a "must have" which is why Disney has been able to leverage it so well and get the highest price of ANY ad-supported channel.

Even if ESPN keeps it at $2.61 and loses just half of the 90 million homes, Disney loses 2.6x45x12 = 1,404m

Considering ESPN maxes in the 7 rating point -- spiking above that -- I don't see it getting more than 30 million subscribers at ANY price.

Disney WILL have to raise the price of ESPN to offset some of its lost income. They know the price elasticty curve. Will it be $5/month? I'd guess out of my butt they end up with maybe 20m subs at that price which would still be $1.6b less in subscriber revenue. Advertising won't drop much. I would expect average ratings to stay the same. MNF will actually HELP both rating points and ad rates. Will subscribers opt-in JUST for MNF? At what price?

Pricing WON'T affect viewers. They have 90 million possible homes NOW -- for "free" and still average 2.X rating in prime time. Programming will. MNF will help but the $2.8 billion Disney gets per year in subscriber fees WILL be impacted. I see no way around it.

ESPN is obviously the most drastic example in an la carte world. Small but hugely dedicated audience, highest per sub fee (by a WIDE margin) in the industry, and new (and large) programming costs in MNF.

The MSOs have been fighting Disney for years -- and the other sports nets -- and losing the battle in so many ways. It will be interesting when the "fight" goes straight to the consumers. I see Disney as a HUGE loser in that fight.

Without MNF, I'd drop ESPN in a heartbeat. With, I'll be price sensitive. They'll have to throw in ESPN HD there as well (now on a premium tier on my TWC system).

_ITV

dylanemcgregor

02-12-2006, 06:28 PM

ESPN can't really "pick up" viewers. They are available in 90 million homes now and those people get it for "free" (unbundled and watch it or not, it comes in your home).

They won't "pick up" viewers by charging less than $2.60/month and advertising won't make up the loss any way you cut it.
_ITV

Well they could pick up viewers, although it is unlikely to be enough to offset the losses. There are still a fairly large number of OTA only households, about 19% or 20.5 million according to this (https://www.nab.org/newsroom/PressRel/Filings/OTAAtt81104.pdf) 2004 report. A majority of my friends and family fall into this group, not because they don't like TV, but because the entry point for basic cable is too high in their opinion. A number of these people would probably subscribe to a few channels, if the price was reasonable. Again, would it be enough to offset the losses of a big channel like ESPN, almost certainly not; but smaller channels that are now typically put up in the digital range might benefit. I'd like to have IFC and Sundance, but not enough to pay $80 a month and get a bunch of other channels I don't watch.

-Dylan

iWish

12-03-2007, 03:08 PM

According to FCC:

"Non-Regulated Rates

The rates for any tier of service (other than the basic services tier) and for any pay-per-channel programming (i.e., a premium movie channel) and pay-per-program services (i.e., a pay-per-view sports event) are not regulated. Your cable company is free to charge any rate for these services. However, your cable company may not require you to purchase any additional service tier other than the basic services tier in order to have access to pay-per-view events or premium channels offered on an "a la carte" or individual basis. On the other hand, there is no law that requires cable companies to offer channels or programs on an “a la carte” basis."
http://www.fcc.gov/cgb/consumerfacts/cablerates.html

I always thought they stick you with the "digital" tier in order to get HBO or extra HD channels.

Has anyone been able to buy only the "basic services tier," cable cards and, e.g., HBO pursuant to this concept?

Luke M

12-03-2007, 05:56 PM

The cable company has an incentive in many cases to fight for lower price on a collective basis (like a labor union) so rates aren't so high; because there is some competition with satellites, free broadcast and others; because it leaves more money for the provision of service charges; because it makes the local franchise issuing authority happier; etc.

The more competitive the video market is, the less leverage cable has. So perversely, competition can result in higher prices for consumers. This is one possible advantage of ala cart.

Incidentally, many small cable operators support ala cart regulation.

SnakeEyes

12-04-2007, 12:02 PM

It's that other people pay for the channels you want to watch, whether they want to or not, that keeps the price you'd have to pay for them down to something minimal. Once you stop paying for channels you don't want to watch, so do others. And then you'll be paying a lot more for the channels you want to watch... not the $0.10 or $0.12 per month each you might hear about, but 10 or 20 times that each.

The .10 or .12 channels are priced that way already for a reason. People aren't willing to pay more.

SnakeEyes

12-04-2007, 12:11 PM

you also have to realize why ESPN can, and have to charge, the amount they do. It's because of the rights deals they have. How do they afford this? Though the countrywide subsidy by all tv subscribers. It's certainly not because of TV ratings, ESPN doesn't average much.

Ala Carte would force ESPN to responsibly purchase rights and not rely on passing it along to all subscribers. This puts the consumer as a more important factor to ESPN. In the ala cart market they will not be able to price their channel to support their current practices, the price would be too high. Obviously this also has another benefit in that it puts other broadcasters back on the table and is good for the market and consumer.

BobCamp1

12-04-2007, 01:24 PM

Bundling is good, and is a natural consequence of market forces. It would be difficult to regulate it in a way that wouldn't end up costing you more.

Microsoft bundles a word processor, a spreadsheet, a presentation package, etc. into one bundle. This way, they can get you to buy something you may only occasionally use, and you'll be glad when you do have that occasion that you don't have to go and buy a separate (more expensive) package.

Anti-virus, firewall, and spyware detectors are also sold as bundles. Yes you can buy them separately, but it usually makes sense to buy a bundle as that is offered at a lower price and the products are integrated together.

Also, cable companies do not offer a la carte pricing because THEY paid as a bundle. All the Disney stations, all of Viacom's stations, all of NBC' s stations, etc. are bought as a package. The deal is that the cable company must show all of the channels in each package. Does "a la carte" mean you can buy each package separately (you'll end up buying all of them) or each channel separately (prices skyrocket, small channels cease to exist, there is less variety for the same monthly bill).

There are so many things that would have to be controlled to get a la carte pricing to work they way it should work, it wouldn't be worth the effort.

EVizzle

12-04-2007, 02:19 PM

Thanks people, for making me pay to have a V-Chip built into all of my TVs,then bombard me with ads about the V-Chip, then offer a la carte pricing so I can keep my household which has zero children, free of terribly dangerous television.

Now ask me to pay more to get what I already have and you are set. All a la carte will do is kill off stations like F/X, SciFi, ESPN Ocho and the like, which I frequently like. I already have ESPNClassic moved to digital, and I have to pay more for the NHL Network. Could I choose to not get CNN, Shopping networks, and some other unwatched channels? I doubt it.

EVizzle

12-04-2007, 02:20 PM

And by people I mean the government folks and those who demand government action in the TV world. I can list 20 more important issues than what cable channels I can keep those rot-brained kids off of.

EVizzle

12-04-2007, 02:21 PM

Rant over. Thank you.

dswallow

12-04-2007, 02:25 PM

Stormspace

12-04-2007, 02:41 PM

I think there's some seriously bad guesswork going on with how prices might fall in a true a la carte system.

Either there'll still be a level of bundling, much like is done in Canada with Star Choice or ExpressVu, or you'll see pricing skyrocket per channel... the advertiser supported stations need potential viewers but also often can't support themselves just on advertising revenue. They can entice you to watch a program if you get their channel, but if you don't get their channel, there's a lot less chance they can get you to watch any program on it. A channel that might be costing $0.05 - $0.10 per subscriber when it's included on a base tier could end up costing $3-$4 per subscriber if they have to try to survive on such revenue alone. If they get bundled ina mini-bundle with 5 or 6 other channels, at least some of which are highly popular, maybe that could go down as low as $0.40-$0.50 per subscriber.

One thing about cable history I found interesting is that most channels charge the cable operator to carry their content. This simple fact was used to Ted Turners advantage when he started because he decided to not charge cable co's to carry his station. I think that if an alacarte system was implemented those channels currently charging might make some adjustments to keep themselves on the air. Whether this translates to saving by the consumer is another thing entirely.

SnakeEyes

12-04-2007, 02:43 PM

SnakeEyes

12-04-2007, 02:45 PM

You forgot the "and then ignore that V-chips even exist and censor everything anyway."

V-Chip mandate and then ignoring it still annoys me to no end. People predicted this from the beginning.

SnakeEyes

12-04-2007, 02:50 PM

And in response to an earlier comment/question, it's believed that if ala carte was mandated there would also be restrictions on broadcasters from bundling their channels when negotiating with cable companies.

EVizzle

12-04-2007, 02:55 PM

I shouldn't have to pay so that you can get ESPN Ocho. However, I am not sure I have heard what the argument for government mandate to ala carte is. Cable TV is not a right.

Very true. You shouldn't have to pay so I can watch the Ocho, but I shouldn't have to pay for CNN so you can watch it either. I think they should just have more of the already confusing tiered systems, and package channels together. You can get the news package and I can get the Dodgeball Channel, and pay accordingly. Either a la carte everything or nothing, but to say it is to protect the children is rediculous.

And Cable TV is not a right, though I wonder why we break up other monopolies and prop up cable tv. FIOS is a perfect alternative, but it is not here yet. There really needs to be a land line alternative to cable, and until then the government needs to stay involved to prevent their dubious ways.

flatcurve

12-04-2007, 03:24 PM

I just found out that FiOS will probably never be in my area :(

dswallow

12-04-2007, 04:09 PM

I like Bell ExpressVu (http://www.bell.ca/shopping/PrsShpTv_Dth_Landing.page)'s method of bundling. They basically have a bundle of 100 channels... mostly locals out of numerous cities and a few of the very-common "basics". Then everything else is organized into 20 "Theme Packs". For the most part each Theme Pack is priced at $8 and they contain related channels. Some have more than others, but each is basically the same price. And they offer special pricing when you buy bundles of Theme Packs (i.e., any 5 Theme Packs are $X, any 6 Theme Packs are $Y, etc). And there's a few a la carte channels as well as a number of International channel bundles with varying prices, and the premium movie channel bundles.

So you have more control over what channels you buy but there's still some of the benefits achieved through bundling deals.

Johnstone

12-04-2007, 04:37 PM

So, why can't we have the best of both worlds?

Every channel should be available a la carte...and the cable companies should be free to offer money-saving bundles, in addition.

Everybody wins!

rainwater

12-04-2007, 04:48 PM

So, why can't we have the best of both worlds?

Every channel should be available a la carte...and the cable companies should be free to offer money-saving bundles, in addition.

Everybody wins!

Except the cable companies will make sure the a la carte prices are so high that you will be forced to buy their bundles if you want any substantial channels.

qz3fwd

12-04-2007, 06:03 PM

I should be able to decide specifically which channels I want and dont want.
Not be forced to subsidize someone elses viewing habits/wants/desires.
Bundling by both the content owners and cableco's should be illegeal.
Then the market would kill off the unsustainable channels or different prices for different channels would emerge to fund the unpopular channels with a smaller subscriber base and the more popular channels would become cheaper due to the larger pool.

In the end, I know my bill would drop substantially, as 85% of the channels I pay for would not be part of my alacarte package.

Let the market decide, force channels to sustain themselves or perish, and take some of the leverage away from the content owners and cablecos and put it back in the hands of the consumer.

"Excuse me sir, but if you want to buy that Cadillac XLR for yourself, you have to buy this Chevy Mailbu for your son. Sorry" How would that work in the marketplace? Oh-wait-there is competition in the auto industry and you could just go buy a Mercedes Benz...

NOT SO IN THE CABLE INDUSTRY.

classicsat

12-04-2007, 06:17 PM

lundberry

12-05-2007, 04:59 AM

ok so lets look at this logically. What do you like to watch. What don't you like to watch. What are you going to like to watch in five weeks, five months, a year, or five years. What in theory sits near the bottom of your NPL. We don't know our future viewing habits do you want your cable bill to fluctuate every month based on your likes and dislikes.

I can't stand most sports. But who cares. getting rid of ESPN is NOT going to lower my cable bill. Plain and simple eliminating ESPN is just going to make the cable company happy because they don't have to pay for the channel anymore. I don't watch MTV but you know I'm not going to go through the annoying process of assessing what channels I do and do not need/want on a continual basis. Part of what comes with having cable is the fact that they are providing something to a wide array of people. Wide arrays of people have wide arrays of taste. I like the old acronym KISS. Keep It Simple Stupid.

Cable Co's want ala carte. They will never tell you that. It isn't to their benefit to appear even more "devious" to the their customers than they already do. What I see happening is them penalizing customers that don't subscribe to enough of their offerings.

Does no one watch Ramsey's Kitchen Nightmares? The first thing people should learn is ala carte means getting rid of discounts. Now you can sugar coat it anyway you want to. But look at your ala carte packages now. Thats right your Showtimes, HBO's, Cinemax's, Encore's, Starz, and all of those wonderful sports subs you can get like NHL Center Ice or MLB Extra Innings. Expect thats what your going to be paying for comparable numbers of channels.

Additionally you will probably see them ratchet up fees on CableCards and Cable Boxes because now you really need them for all of your wonderful ala carte programming. Its not like you can simply use a government voucher converter box.

Setting up your cable lineup through the cable co. would also be a pain because your going through and having to select all of your channels. I can envision it now. "You know if you add on bravo to your package we can complete your arts line up it will only be an extra $1.80 a month. And since you seem to be an intellectual why don't we add on history international and history domestic packing industry as well. They each run for a mere $1.50 a month." The cable company is already high pressure every time you call for technical support do you really want that happening more?

Finally I have to wonder how many of you would be calling up your cable companies constantly to complain about the wrong channels being assigned to your accounts. You know disputes between the customer and cable co's. would just go up with people claiming they had never ordered channels they were billed for. I just don't see too much logic in going ala carte. I know I would sign a petition for them to not go ala carte if it was possibly even going to make it to the legislature.

qz3fwd

12-05-2007, 01:22 PM

You sound like you work for Comcast or some other cable company.

Let the market take care of itself.

Abolishing government approved cable monopolies and a-la-carte need to go hand in hand.

lundberry

12-05-2007, 01:37 PM

I will assure you I don't work for a cable company. But I know how business works. Do you think the cable co's are just going to take a loss on profits? They are businesses and should be endeavoring to make the most they can. But I do not approve of price gouging. I was just trying to urge you to not be naive.

Amnesia

12-05-2007, 02:17 PM

In the end, I know my bill would drop substantially, as 85% of the channels I pay for would not be part of my alacarte package. What makes you think that your bill would drop?

Let's say you get 100 channels now and pay $50/mth. That works out to 50 cents per channel. You really only watch 15 channels. Are you saying that you think your bill would drop to $7.50/mth?!?!

If a-la-carte were instituted, then the price per channel would need to rise until the average consumer pays the same (or more) than they currently pay. So in our example, if most consumers only watch 15 channels, then the cable company would need to charge around $3.50/channel.

(I believe that the average bill would be higher under a-la-carte because of the extra service cost of keeping track of everyone's selections, service calls because of incorrect channels, etc as mentioned above)

ZeoTiVo

12-05-2007, 04:23 PM

(I believe that the average bill would be higher under a-la-carte because of the extra service cost of keeping track of everyone's selections, service calls because of incorrect channels, etc as mentioned above)

they can barely get the billing system and cable card systems hooked correctly so the customer on cable cards gets the right tiers of channels

lundberry

12-05-2007, 04:50 PM

You know the stupidness with the billing system would be passed on to the customers in terms of prices. They don't eat costs thats just not something you do. I didn't think you could milk something as much as some of the cable providers do.

You have to figure cable card rentals would go up in cost. Maybe they start charging you per channel per card. That is wrong to do but it would not surprise if they did do that. But they very well could do something like that.

Johncv

12-05-2007, 06:54 PM

Let's say the average person watches 5 channels (just a number I pulled out of the air). I'm sure the "a la carte" would be priced so that to get 5 channels it would cost at least as much as the current "basic cable", so the company doesn't lose money. If you watch 1-2 channels, great, but if you watch more than 5, you're going to be paying more money than you do right now.

No, it will never work like that, many channels are own by big corporation, GE owns Universal-Media, which owns NBC, SCIFI, Bravo, and now Oxygen. They charge the cable and sat companies discounts to carry the channels. If force to go “a la carte”, Universal-Media would have to raise the price for all the channels to cover what they would lose from what they receive from selling a block of channels.