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AOL/TW Plans for $230 Monthly Cable Bill
Jonathan Campbell writes: "According to the article, subscribers will get over the sticker shock preferring convenience over price." Yay, it'll be so convenient having one company control my television, internet access and phone service. I can hardly wait.
$230-$80(Cable Basic&2 premium)-$50(DSL)-$30(local phone)=$70
What additional services will they provide for $70?
A pay-per-view p0rn0 and a hooker?
AOL is smoking crack. Provide reliable desirable services first, then decide what you are able to charge for each one.
âoeWho knew something as harmless as willful ignorance could end up having real consequences?â
Isn't that the same bet that fired off the dot com craze?
And we all know how well that worked out.
they have to provide a midget to change the channels for me, and serve me food.
Basic Cable: $60
3 Premium Channels: $25
DSL Connection: $45
Basic Phone Services: $30
Some hellspawned idea about "convenience over price": $70
A monopoly and the knowledge you can get away with the latter: Priceless
There are some things money can't buy. For others, there's AOL
At one end of the curve you have people who have made enough money to afford this service, but they have become lazy enough to pay the extra $70/month for the "convenience."
At the other end of the curve are the people who can't afford the service but are stupid enough to believe it's of value, so they subscribe anyway.
The distribution of people on this curve is great enough that the service sells and becomes a model for other other companies to copy.
Not because people will be against having a sinlge company provide all their services (in fact I'm sure many want it), but because the price is outrageous. Let's take pricing on some local (Tucson) services:
Analogue phone line: $16/month
Basic Digital Cable: $45/month
Consumer grade DSL or CM: $50/month
All tolled that gives us about $111 per month, and yes I factored taxes in that. That makes the AOL package over twice as expensive. Now just for the sake of argument, let's assume they give you more than just basic service. In all reality we know that won't happen, but hey, we'll assume they give you something comparable to what I have:
Analogue phone line: $16/month
Extended Digital Cable: $60/month
Professional grade SDSL: $120/month
That's still only $196. To match the AOL price, I'd have to buy 3 premium networks per month (and with digital cable, that gives me about 10 channels per network). Plus, I really doubt they'll offer anything more than basic digital service and just normal CM service, making the first comparison more likely.
Personally, I think the idea of all-in-one providers is a good idea, provided there are several to choose from. However the reason it would be cool is that in theory it should save you money. Companies should be willing to charge you less overall in return for the fact that you buy more services form them. Cox already does this. You get a discount if you get both a cable modem and digital cable. It's been effective too, it encourages digital cable subscribers to get a CM instead of DSL, and encourages people with CMs and cable to upgrade to digital cable.
AOL is full of it if they think people are going to pay that much more for one provider service, espically since for most people it is probably going to be double the cost. If they want people to go for this they are going to need to make ti at the very least comparable and probably cheaper than getting all the services seperatly.
I guess you don't watch TV...
What, besides lack of marketing killed it? Bundling all that together made customers realize they were paying two hundred bucks for telecommunications! Guess what'll happen when AOL/TW tries the same thing?
This must be why I did so poorly in my econ class. I thought that allowing companys to merge and destroy competition lowered prices and improved service to customers. Good thing I got this cushy programmer's job:)
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