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Suit Seeks 'A La Carte' TV Channel Choices
An anonymous reader writes "A breathtaking lawsuit was filed this week against every major player in the 'for-pay' television industry. Every major broadband and cable company in the US was named in the federal suit, which seeks the right to obtain content piecemeal rather than in the large (and expensive) packages that cable companies offer as the only option right now. This follows closely on the heels of encouraging comments from the FCC chair that he supports this kind of service. 'The complex web of contractual arrangements among service providers and networks amounts to a monopoly or cartel that has "deprived consumers of choice, caused them to pay inflated prices for cable television and forced them to pay for cable channels they do not want and do not watch," [antitrust lawyer Maxwell M. Blecher] wrote in the complaint filed on behalf of cable subscribers in several states. The complaint, which alleges a conspiracy to monopolize as well as violations of federal antitrust laws, names nine plaintiffs, but Blecher wants the U.S. District Court to certify it as a class action.'"
But even so, it's hard to see how anyone could possibly find it justified at this point in time. If it weren't for the DMCA, we could get it by show off of YouTube...Clearly there is no technical limitation.
It comes down to the fact that their business model is more and more dated by technology. No one is obligated to provide them a free ride.
ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
If this happens the providers will respond by separating popular shows on to their own channels. The top rated content will be padded with junk you don't want to watch. The only answer is to sell shows individually.
This is retarded. Does anyone really think their cable bill will go down if this suit succeeds? Of course, the first thing they'll do is pass their litigation costs along to us. Then they'll price each individual channel such that the sum of an average person's "ala carte menu" will be as much or more as they paid before.
And if you're into the less "mainstream" channels, be prepared to pay through the nose or have them disappear entirely. (Of course, Slashdot readers are all mainstream, NASCAR-watching type dudes, so that won't be a problem for us.)
ESPN is one of the most expensive, if not the most expensive channel on your cable system. It costs them a ton of money to carry it, and the costs are passed on to you whether you watch it or not. I'd be more than happy to be given a chance to get rid of it forever.
It's always aggravated me that I have to pay for ESPN, reputedly one of the most expensive channels on cable, because ESPN has the market power to force their inclusion in the basic tier. To receive the Science Channel and the National Geographic Channel, I have to pay for a tier that includes all sorts of crap that I don't watch.
Mea navis aericumbens anguillis abundat
If this lawsuit results in a change in policy, it will mean nothing for most people. Selling channels on a per-channel basis is more complicated for the cable providers, and will thus be more expensive per-channel. Unless you literally watch only one cable channel, you will probably pay more to pick-and-choose 2-4 channels than you would pay for an entire package, including 90% channels you don't care about.
I used to work for Cox Communications, and in my area, "limited" cable is $11/month (channels 2-22, aka fancy rabbit ears). "Expanded" is an additional ~$30 (23-72). And the digital tiers are something like $2/month (for 5 to 20 channels per tier each). (HBO, Starz, Cinemax, etc, are priced entirely differently).
The digital channels (which are most popular to complain about--probably because there's the perception that there are "hundreds" of them due to their channel numbers reaching into the 300's and 400's in some cases) are by far the cheapest channels there are, and it doesn't make sense to break up a package that cheap.
Where it might have an impact for some people, is breaking up the "Expanded" tier (most cable companies have something similar), as the bulk of that $30/month price is the subscription fee the cable network pays to ESPN (something like $24/mo, if I recall).
If my memory is accurate, and the ESPN fee is $20+/month, then that means the other channels (23-72 minus ESPN) are $10/mo or less. And then it's suddenly very "reasonable" again.
Of course... if cable channels are sold a la carte, then the price per channel will go up by necessity. The *average* cable bill will still be roughly the same as it is now (assuming the programming also stays the same--and of course it wouldn't). The difference would be that families with 8 members who actually use 2 dozen channels would pay a higher cable bill, and single-member households (like mine) will only subscribe to 2 channels, and pay less.
I guess what it all comes down to me is: It's a lot of fuss about something that isn't a big deal, and it's just as likely (if not more likely) to hurt the consumer as it is to help them, except in fringe cases.
> Nobody is "forced" to buy anything they don't want
True, but only if what you want is nothing. If what you want is one or two certain cable channels, you are indeed forced to buy them as part of a package.
Oh, I can't help quoting you because everything that you said rings true
See, that's why ala carte is stupid, while those channels might be popular with slashdot, they are massively unpopular with the public at large. What this means is that they will be expensive. Right now the reason there are some geek friendly channels on cable is because they are subsidized by the popular stuff. If ala carte pricing ever happens, the only affordable channels will be the popular ones, and all the niche channels will cease to exist, or be prohibitively expensive.
Look people, ala carte might sound good, until you realize that in order to remain revenue neutral the people who watch the popular channels will pay less, and those who watch the more obscure stuff will pay more. And who are we kidding the cable companies aren't going to roll out a new pricing scheme that is revenue neutral, so in reality only those who choose the only the most popular networks will pay the same (and get less), and anyone who wants anything out of the ordinary (read: slashdot) will pay more.
Lots of Content networks do this to ensure their lesser and crap channels get viewership.
Course, I wouldn't count 'viewership' as actually watching it. There's a world of difference between making something available and someone actually taking advantage of it.
Sadly this is often overlooked by media companies.
It's not going to matter, because they will make ala-carte so expensive that nobody will use it. It'll be this sort of "sure, we'll comply -- and fuck you -- it's going to be $20 per channel".
I'm fucking tired of paying through the nose so that I can have 10 religious channels, 15 infomercial channels and half a dozen "public access" channels where my hard earned tax money goes to provide facilities for nutjobs, lunatics, religious freaks and potheads to shake their jonk (Jim Spagg) or drone on with poor production on public "airwaves".
And don't even get me started on having to pay for TLC (The Ladies Channel), E! (Entertainment), Biography (which isn't biographies about INTERESTING people -- but only movie stars and musicians) and other similar pointless channels.
Not to mention... you know... paying for television that is filled with 25 minutes of *COMMERCIALS* per hour, per channel.
You seem to be a nice guy. Just leave the whole damnded cable tv company when you get a chance. Their business model is doomed and they are headed to where radio is. As you correctly point out, in the advertisement supported video content model, the viewers are product, not customers. People with more discretionary income will be quickly cherry picked by internet based content delivery systems. As the high income people drop out of the viewership, you need to get louder and shriller with the ads and that will drive more people out. Once all people who are willing to pay for the content leave, the disposable income of the viewers left in your domain will be very small. You might still have 50% of the current viewers, but disposable income is very unevenly distributed towards the higher end. Your top 20% of the viewers have 80% of the disposable income. It does not take much for the ad supported model to lose 50% or 66% of the value.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
In fact, it's slightly perplexing how channels get away with charging cable companies to carry them; they make money through advertising, and the more viewers they have, the more money they can make this way, yet they also charge cable companies to increase their potential viewership.
I am TheRaven on Soylent News
This is awesome. I have a 'digital plus' cable package with over 200 channels, which I had to buy because the 4-5 channels I regularly watch were on that list. I would love to get rid of the other 190 channels or so, (200-(5 I watch)-(5 or so others I occasionally use/check)) and if I could get a price cut at the same time, that'd be even better.
That won't happen. If anyone thinks they can take their current bill and divide by the fraction of channels they watch to get a new a la carte bill, they're deluding themselves.
I'm also not quite getting the basis of the lawsuit. Can I sue the grocery store for refusing to sell me one egg?
In non-monopoly markets, all of that is actually quite possible.
Several burger chains sell extra paties ala carte. "OEM" versions of cars and trucks exist and as well as plenty of aftermarket mosds. You can get marinara in ANY variety you want. They even sell versions without the high fructose corn syrup.
In real capitalism, there's someone to scoop up every last available penny and niche players and products thrive.
A Pirate and a Puritan look the same on a balance sheet.
When selling ad's on your channel it does not matter. saying "Discovery Rome lite" is available on 3500 cable networks is all that matters.
you have to justify to the guy buying your Ad air time why he is not wasing money on a channel that is probably not going to get viewed.
Do not look at laser with remaining good eye.
Right. In real capitalism, companies offer variety if they think it will make them more money. Why not, instead of trying to force the monopoly to do what they likely would if it were not a monopoly, remove the government-sanctioned monopoly?
The masses are the crack whores of religion.
If all the theme parks got together and said. I will only let my customers by a all ride ticket you do the same and we make 80% extra for each customer. Then you would have a point. Or as a more related deal. If the ride builders got with the theme park owners and arranged that all parks would only sell tickets on their latest ride if they included the little ladybird ride as well. Because the individual theme parks have decided that this is a good model you have no fight. If I wanted to start a per ride priced park I could. If you try to start a per channel cable company atm you will not be able to buy content. This is why it is a cartel and illegal. It is a method that allows multiple suppliers to form a monopoly like pricing policy.
I produce television programming for cable. If you don't think advertisers are savvy enough to know the difference between the number of homes a network is available in and the number of people actually watching a particular program, you're an idiot. The FIRST thing they ask is 'How Many Viewers?'
paintball
Amen. I pay roughly $80/month for my cable TV for more than 80 channels, so that's less than a dollar per channel per month. That's a great deal when you consider a lot of people pay about that for their mobile phone plans. If I bought only the channels I wanted under an a la carte scheme (and I've watched maybe half of those 80 channels at some point over the past year), I'm sure I would be paying more than $80 per month, probably a lot more. That would be at least a doubling of the price I pay. The current scheme keeps prices down.
Also, I don't want to lock myself out of channels I may find interesting in the future. I like being able to channel-surf a wide variety of programs. I don't like subsidizing the religious channels, but I'd bet that Congress would allow them an exemption or force the cable providers to carry their shows for free as a public service, like they did with broadcast TV. (However, I have also heard that religious broadcasters have been wary of the a la carte scheme because they are afraid of getting shut out by the viewers, and this was even when the Congress was rabidly conservative, so perhaps they don't have the allies there to force that through after all.)
The folks who push the a la carte scheme would be better off pushing the content providers to make the individual shows available either for free from their websites (like NBC) or for a fee through services like iTunes. If people will pay two dollars to watch a half-hour sitcom (or a 3-minute music video), then there's clearly a lot of money to be made with a truly a la carte scheme (by the show and not just by the channel) outside of the cable channels. That route is clearly much more lucrative for the content providers to pursue.
Better yet, if the consumers are unhappy with the cable TV pricing structure, they just shouldn't buy cable. The market should react to what the consumers want. I don't like having a contract forced upon me by my mobile phone provider, but I buy the service because it's worth more to me to pay the money and have a mobile phone than not having the phone service at all.
Interestingly, channels like HBO and Cinemax (Time-Warner companies) are cheap compared to ad network channels like ESPN (around $6 a head). Our basic access, which is dirt cheap at under $10 a month, you get the local channels, and the shop-at-home channels. It's pretty much free to send it to you, because the shop-at-home channels pay us per subscriber, subsidizing the line.
But places like NFL network and ESPN charge us for them, even though we don't send them the signal for their channel. NFL costs $10-$20 a head and, as I said, ESPN about $6. So, since most people around here want ESPN, and if enough people want NFL network, you'll likely have to pay, in one way or another, for those channels.
God knows I wish it wasn't the case. I wish sat TV offered decent competition, and I'm sure they think the same about us. But we're fundamentally a cartel of 2-3 providers for a given area selling overpiced goods from monopoly suppliers. And since there's no niche provider for geeky TV, customer demand and monopoly pressure would mean that we'd probably just serve ESPN, NFL, shop-at-home, and populist reality shows, and not negotiate the rest of the channels, whatever is most profitable to serve to most people.
And hey, it is our problem to work out pricing with the networks. But what the the lawsuit should be over is why there is no competition in the cable and content distribution markets, and why Verizon and Sprint are so slow in rolling out their TV options. You've been paying for non-existent fiber for a decade or more, why can't you reap the benefits of their cabling and content negotiating power?
They wouldn't let us show Fine Living but NOT Food Network.
I see this as an illegal use of a monopoly. Fine Living as a product has a monopoly granted to it by copyright. No one else can take Fine Living and resell it without permission (and a contract) from the content owners. Yes, there may be other channels that offer shows on the same theme, but they are not the same thing.
And so the owners of the Fine Living monopoly force their customers to also buy Food Network if they wish to buy Fine Living. This is what I see as the illegal part. It's not illegal to have a monopoly - heck, copyright law grants it every day, even to this post to Slashdot. But it is illegal (or should be illegal) to use a monopoly to force your way into other markets, or to use your monopoly to expand your monopoly. That's how I see content providers' bundles.
Note: If you wish to republish this post, you are required to exclusively buy and use SydShamino brand toothpaste. That's right, SydShamino brand toothpaste, with less glycol than the competition!
It doesn't hurt to be nice.
1) Many times, we are charged per cable subscriber for a network even if we don't offer it the subscriber.
Then don't offer it. If you have to pay $20 per month for ESPN (because it comes bundled with 40 other sports channels) but no one would pay $20 for just that one channel, then you drop it. If there are a few people that would pay for it, offer it. I don't see the problem.
2) Many networks like Discovery and Fine Living give us massive price breaks if we show their second and third tier channels to a certain percent of subscribers.
Charge the subscribers for the list price of the ones they order. If there is a bundle savings, send them a rebate. Or, price it as such. It'll get very complicated, but Discovery is $3 for a subscriber. If you add Discovery Kids to that, you pay an additional $.50 (don't tell them that Discovery now costs them $2.50 and Discovery Kids $1). Problem solved. It isn't rocket science. If you told me the cost for all your channels, I could come up with an a la carte scheme that would make money and not be too confusing. But once all the cable operators offer a la carte and refuse to sign any agreements that aren't a la carte, then the problem is solved.
Don't tell me that you refuse to do what's best for the people because you signed a bad contract. That's not my problem. Don't sign the bad contracts.
But to the networks, YOU ARE NOT THE CUSTOMER, YOU ARE THE PRODUCT.
But to you (the cable provider) I *AM* the customer. You are still treating me as the product. Just because your suppliers treat me as the product does not mean I am your product. If they don't treat your customers well, then refuse to let them get my eyeballs on their advertising. The cable companies have lots of power and use none of it (except to screw their customers to help their suppliers, which is pretty damned screwed up and why so many people hate the cable companies and their practices).
Learn to love Alaska
There is this little thing that some people like to refer to as "diversity". In some ways, it means catering to minorities and in others is means broader cultural vision.
Today, there is a cable/satellite channel dedicated to running old movies. How many people actually watch that enough to justify paying for such a channel? Damn few. How about a cable channel dedicated to television shows with Black actors? Today, there are more than one of these and considering both the number of people interested in such channels and their disposable income, it is doubtful that such channels would survive.
Sure, there would be plenty of people supporting the mainstream pablum that is on USA and FX. Movies with every questionable word silenced or redubbed. SciFi channel might survive, but it has a rather narrow appeal.
Unfortunately, the money required to operate an enterprise as a cable/satellite channel is pretty high. Today, if your offering gets picked up by cable systems you can operate and if not, every goes home to find something else to do. It isn't cheap to do this and it isn't going to be cheap in the future. This means that anything marginal or not clearly focused on the mainstream entertainment experience is going to go by the wayside.
I would miss the SciFi channel. I would miss TVLand and AMC (old movies). But my purchasing these channels on an ala carte basis would not be anywhere near enough to keep them operating.
Ala Carte is a method by which the larger media organizations get to push their message at everyone even more consistently than they can today. Anyone without a dedicated majority of the viewers loses. This has already happened with radio - there are few formats today and they all have mass appeal. Anything for smaller audiences is gone. Ala Carte cable will have exactly the same effect.