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An Essay On Subscription Television
dpu writes "Who would pay $1.99 to download a television episode that only costs about $0.0014 to see on cable? This is a short essay on the current and past state of subscription television, and a hope for the future. It skips a lot of points that the thinkers among us might care about, but it does the math and drives a nail into Big Content's pinky toe."
I remember a time when having 'cable' meant that we didn't have to watch commercials. It seems difficult to avoid them these days.
Who would pay $1.99 to download a television episode that only costs about $0.0014 to see on cable?
Why pay $14.99 for a novel when you can walk out of the library with it for free?
Content creators need to be assured of recompense for their work. Until someone comes up with a better way of assuring payment for digitally-reproduced work, the system we have is...all we have.
I haven't RTFA, but I could give three reasons.
1. You're paying not to see commercials
2. You're paying for the convenience of seeing whenever you want
3. You're paying for the infrastructure needed
The prices are high as they are with any "new tech". As I see it, this is still an "early adopter" price.
I also question the maths involved here. Is he watching cable 24/7 to get those prices?
If average person watches TV for 4 hours a day, that is 120 hours a month. With $60 a month to Comcast that means it 50c per hour of TV, with ads. If you consider that ads run anywhere from 15 to 30 minutes out of hour, lets say at average 20 minutes, you get about 80 minutes of TV for a dollar, which is subsidized by ads. I don't know how much Comcast pays to the content providers and how much ads will pay. But you are willing to pay at average 50c per TV show episode, while watching ads. So you are paying 4 times as much for no ads. Now for the author of the article and for me, if you watch about 4 shows at average, that is 20 episodes a month at the $60 for Comcast this makes $3 per episode. I think that looking at it this way, iTunes pricing is a steal. Not counting the fact that there are off-season periods when you still pay subscription to Comcast, but don't pay anything on iTunes.
If programs would be read like poetry, most programmers would be Vogons.
If I could pay $2 per episode for content that was guaranteed to be ad-free, DRM-free (or free enough that it doesn't hinder my fair use efforts), persistent (meaning it doesn't get deleted out from under me), and included added-value content like commentaries and behind-the-scenes features, I would.
Oh wait, it's called buying it on DVD.
And until these newfangled methods of obtaining TV can provide what those shiny coasters can provide, I'll stick with buying the shows I want to watch repeatedly on DVD, and PVRing the ones I only want to see once.
The same reason people are willing to pay 99 cents for a music file they could download free from Kazaa, or willing to pay $3.99 for a gallon of milk at the gas station they could buy for $2.50 at the grocery store just a few blocks away.
It's shocking news to both content providers and pirates, but most people have money in their pocket and they don't mind spending it on things that they like when it is made convenient to do so. They are particularly happy to spend more when it saves them time and gives them a guarantee of quality, both of which are major motivators of buying songs/TV shows rather than simply getting a radio or cable hookup.
Keep in mind that if you want to watch particular shows and don't have an infinitely flexible schedule, you'll need to include the price of a TiVo or something similar to make sure you're recording all those "cheap" shows. And you'll have to wait for a rerun or a DVD to be released if you missed an episode.
Recursive: Adj. See Recursive.
The current revenue of a company like Comcast comes mainly from the money paid by subscribers, that is true. However, only a fraction of that money goes to the TV networks, most of it goes to pay for infrastructure and such. The reason that the TV networks get none of the money is, quite simply, because they get their finance from commercials. Another model for delivery, like the one suggested in the article, would give no reasons for networks to give the low/nonexistent prices that they currently do to Comcast. Although I do believe that the subscription television probably is something that we might see in the future, I hardly think the article is slashdot-worthy. Slow news-day anyone?
"Who would pay $1.99 to download a television episode that only costs about $0.0014 to see on cable?" Who would pay $0.0014 to see it on cable while you can download it on your favorite torrent site for free?
I'm happy to pay a dollar or two if I can download an episode of 24 straight after it airs. The only reason I don't do this at the moment is because Apple (Apple fanboys: note that Apple has refused to sell songs without DRM when requested by the artist - Apple loves DRM) and Fox have decided that they will only sell me encrypted media.
I think there's a huge market for "put your CC details into this website and we'll give you an unencrypted file download link". The iTunes Store was around by the time AllofMP3 started getting popular, but enough people use AllofMP3 for it to bother the RIAA significantly. Why don't these people just use iTunes? Because AllofMP3 give their customers exactly what they want.
Of course a big part of the reason that cable is so cheap per show is that they show advertising. To answer all those people who are bitching about having to pay for cable when it has commercials I want to point out that you pay a relatively small amount for quality (and many not so quality) cable shows because of these commercials. Sure you can argue that the locally inserted commercials by the cable company are a needless waste (but remember cable has far fewer customers than phone so they must split up the cost of their network over fewer people) but if you want big budget shows with high production values you either need to charge the way HBO does (10-15 bucks per channel per month) or fund them with commercials.
.2c. Given a 30minute program has 6 minutes of commercials that means about $1.20 of commercials (I suspect this might be a hit high but still roughly on target). Throw in the costs of the lost commercials from reruns (how frequently have you seen the same program a second time?) and the $1.99 price begins to seem relatively reasonable. Remember the viewers that are being lost to download aren't the people who are leaving their TV on while they do something else, they are the valuable viewers who are watching closely.
I suspect others will point out that the amount the advertiser is paying per viewer is much smaller than the cost of say an iTunes download hence it should be economical to have relatively cheap commercial free download, e.g., each downloader just needs to cover the total amount an advertiser would have paid to get commercials to you. From my quick google research it seems likely that the cost per impression in the male 18-34 age group (also the download group) it is about
If you are willing to watch commercials in your download then it's a different story but if you aren't you have to ay to replace the money the commercials would have brought in.
Also these sort of pay per show model is only ever going to be an alternative to the normal model never a replacement. Sure we will pay for commercial free versions of our favorite shows we follow but most TV watching is done casually (I wonder if there is anything on) and no matter how much you bitch about commercials I doubt you would pay to watch a show just because you had 30minutes to kill but you will watch a show with commercials for that reason. We vote with our actions and those say we want a flat rate model that lets us watch shows for no extra cost when we feel like it.
It's just the same way that people bitch about ads at the start of movies but no matter how much people bitch they never go spend an extra $2 to go to the theater with less ads.
If you liked this thought maybe you would find my blog nice too:
Whether you agree that $1.99 or $2.99 per show is a good deal, directly paying for shows allows something amazing to happen. * It allows audiences to pass money DIRECTLY to television creators. * And that model is more honest and fairer than the advertising model which currently dominates broadcasting. It is a way better model, and better TV would be the outcome. It has the power to transform the type of shows being made because it makes television-makers directly accountable to their audience. Program makers would not have to pander to the needs of the network or the advertisers, but would put the audience first. Shows which have a small enthusiastic audience would not be dropped. Reality shows would have to stick in advertising land, because no-one would pay for that crap. Of course the networks and advertisers are fearful of being cut-out of the market. So while they still have power, they'll attempt to drive the prices of download TV ever higher. This is going to get interesting. C
Between my wife and I, we watch the following shows on a regular basis: (Winter): - Battlestar Galactica (Sci Fi, 1 hour, 26 hours per year with commercials) - Rome (HBO, 1 hour, 26 hours per year with no commercials) - The Office (NBC 1/2 hour, 12 hours per year with commercials) (Spring): - The Sopranos (HBO, 1 hour, 26 hours per year with no commercials) - Big Love (HBO, 1 hour, 26 hours per year with no commercials) (Year round): - The daily Show (Comedy Central, 1/2 hour, 150 episodes per year with commercials) - The colbert report (Comedy Central, 1/2 hour, 150 episodes per year with commercials) All told, that adds up to 416 hours that we actually care about per year. I'd estimate that we also watch about 100 hours or so of miscellaneous stuff (discovery health and the occasional sci fi miniseries). We'll round here and say 550 hours of programming per year, total. This would cost us $1100 from iTunes or whatnot, but it costs us $720 from comcast. In my case, the numbers are highly skewed because I watch the daily show and the colbert report; if I didn't, iTunes would be a much better deal (assuming that there was a really great way to get the content to my television set, of course). "Season passes" to most of the shows I listed above can be bought from iTunes for $30-50 each. I'd gladly pay $350 a year for the 7 shows over what I pay for comcast. -
Yikes! That's over 1/2 million PT Barnums born per year!
I'd have thought the number would be much smaller...
Competing with free means two things. First, you need to provide a quality product. No commercials, high definition, good bit rate, no DRM. Then, you have a product that is as good or better than free. The reason I don't buy DVDs is that when I want to watch a film, I want to watch a film and not commercials etc. 99 hours of "bonus content" generally does not add any value for anyone except hard core fans. I don't really care how they made the trees in LOTR.
The second thing big content needs to do is get the price right. People pay for their internet connection, cable TV, maybe a premium Usenet account etc. because they want to download content. So, like it or not, they already paid and can get TV for no extra cost. If you want more money out of them, it had better not be too much and you had better make the buying experience damn good (i.e. very high speed downloads, no special software required). It has to be simultanious with the first showing on TV too.
Oh, and never forget, just because you spent a lot of money making it doesn't mean it's worth a lot. Your content has to be good, not expensive. Make old BBC Horizon programs from the 80s available for 20p, and I'll bite.
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SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
In any case... I can watch my boxset of Firefly DVDs without seeing any ads, and there are several episodes in it which were never aired. I own several other series on DVD as well.
Fun fact: the most expensive DVD boxset I own costs less than (the hours of time I would have lost watching ads) * (my hourly wage).
"I watch about four different television shows on a regular basis - Lost, Battlestar Galactica, Heroes, and typically a current reality show (which is Grease: You're The One That I Want right now)"
*blink*
OK - of all the content on a full menu of cable or sat, this is the sum total of what you find compelling?
I know there's no accounting for taste, but you're hardly their typical demo.
Most of us are paying full price for a house and really only using three rooms and reallly only for a half the day at best. What's up with that raw deal?
You pay the $1 or 2 to listen or watch whenever you want, as often as you want. No one's holding a gun to your head, and it's an alternative to buying DVR etc. This is a vaguely similar argument to the music sedction, usually pointed at Apple - thet they're "forcing" you to adopt their model. Wrong. There are many music providers. being the market leader is not the same as being an unregulated monopoly.
Which leads us to the cable company. They deregulated cable AFTER the wires were laid down, and unlike the local telcos who are merely the custodian of the infrastructure and must let anyone send their info over the copper, the cable companies have no established way of letting anyone else down the coax. The satellite system is similar - as long as the financial agent owns the pipe, it's their ball and they can go home.
About the only thing I'd change about any video delivery model is make sure it's a la carte, for the sake of scaling down rising cost. The industry is claiming that it will cost a bajillion dollars per person to do this, but that's what they said about seat belts, air bags, ABS, flying car^H^H^H^H^H^H^H^H^H^H personal cell phones and DVD players.
"Win treats sysadmins better than users. Mac treats users better than sysadmins. Linux treats everyone like sysadmins."
Whenever these topics come up many of us seem to agree that TV sucks, yet somehow the issue remains worthy of debate. Why hand over more money for rights-handicapped mediocrity? Do we for some reason feel we require television in order to fit into our culture?
Personally, I'm saying "to hell with it!" I just stripped my cable package down to nothing but Internet, and I can't imagine regretting it. While it's true that I may not be hip to the latest watercooler joke, but I bet I'll survive the trauma.
TV needs me more than I need TV. Let them sweeten the deal before I come back.
These stories are free but worth money.
... its a freaking sweet deal. I pay for the stuff I want to watch (Heroes, 24), and everybody else gets to pay for "We Put Twenty Attention-Starved Coeds On an Island and Drama Happened".
Help poke pirates in the eyepatch, arr.
I stopped reading when he claimed VHS looked better than DVD.
If you only really care to watch 1 or 2 shows, then even the basic cable subscription (say, $20) is going to be more expensive than paying $1.99 / episode to download the show ( 2 bucks * 4 new shows a month = 8 bucks, 16 bucks for two shows ).
And on top of that, no commercials to wate time on, no schedule to keep or PVR to buy, etc etc.
Cable is only a better value for people who watch a lot of TV. I have digital cable, and the movies package, several other packages, etc etc. I pay over $90 a month for my cable. I love it, and think I get good value (I watch a lot of movies), but I can easily see the other side as well. I have friends and relatives who haven't had cable TV in years and are perfectly content to watch their 1-2 shows a week downloaded.
To each his own. There is never going to be a pricing model that fits everything. It's the same reason there is both subscription cell phone coverage, and PayGo cell phone coverage.
Both cable and pay-to-download are here to stay IMO.
http://alternatives.rzero.com/
Cable providers have sophisticated enough two-way networks that it shouldn't be that difficult to charge exactly how much people want, to the tune of $2/month per channel, if you don't want that many.
The channels I would watch on cable or satellite are ones that are only available on the higher tiers of programming. But, in order to get them, it means I'm saddled with a dozen "family" and "kids" channels, two dozen "news" channels, numerous channels akin to "lifetime" and mtv, mtv2, mtx, vh1 and its sisters, etc. As well as literally between 4-5 Spanish stations I am not interested in on cable, all the way up over a dozen on satellite. This means that in order to watch IFC and Fuse (i do occasionally watch Fox and USA also) I'm using about 1% of what I'd be receiving, and paying full price for it. Effectively, those channels are costing me $25/month each.
One satellite subscription service (selling 4DTV subscriptions over C-Band) does offer al a carte programming but they have less than 100k subscribers nationwide and many of the networks aren't renewing contracts with them, because it isn't worth their time. They charge a very small fee monthly. But, you need a 10 foot dish...
I understand programming bundles exist to subsidize the foreign-language channels and special-interest channels that nobody would ever pay for in their own time, but that's why I'm not a subscriber. I get enough channels (even in HD) with a good rabbit-ears antenna and that's how it is going to stay.