The Problem With Cable Is Television

Saul Hansell writes in the NY Times about how various services offered by cable companies affect their spending and their revenue. As it turns out, a lot of the cost increases and investment needs are coming from television and video services rather than internet connectivity. The scramble for high-def and rising licensing fees for programming seem to be the biggest headaches for Comcast and Time Warner right now. Quoting: "By all accounts, Web video is not currently having any effect on the businesses of the cable companies. Market share is moving among cable, satellite and telephone companies, but the overall number of people subscribing to some sort of pay TV service is rising. (The government's switch to digital over-the-air broadcasts is providing a small stimulus to cable companies.) However, if you remember, it took several years before music labels started to feel any pain from downloads. As the sour economy and the Web start putting more pressure on the cable companies, they may be forced to consider breaking up the big bundles of channels they now insist that consumers buy and instead offer individual channels or smaller groups of channels on an à la carte basis."

Comments

Not the programming

[colinrichardday]

I thought the problem was that the programming sucked.

Re:Not the programming

[Wrath0fb0b]

I thought the problem was that the programming sucked.

Americans are a varied bunch -- a lot of us like a lot of very different things. For most people, the Food Network is a total waste of a channel, but I wouldn't trade it away. My old roommate loved the Golf Channel, about which I felt the kind of apathy that he probably felt for FoodTV. There is no /.ers seem overwhelmingly in favor of ala-carte pricing, but I'm quite skeptical that this will improve the quality of programming. Instead, I think it will move towards the same "top-10" mentality where money is poured into the small number of large earners while the bottom half is ignored, or worse. I would love to pay $5/mo "directly" for FoodTV (directly, in the sense that Verizon would see that cash flow and value FoodTV appropriately), but I fear the result.

Plus, I'm generally not a fan of the kind of balkinization that I feel this will produce -- people that view only the things they already know they like are unlikely to branch out and view something different. There's quite a bit of interesting wheat (in there with the chaff, of course) flipping through that large middle block of digital channels.

Re:Not the programming

[IgnoramusMaximus]

Forcing me to pay for Billy-Joe Bob's new heart

No, its a fee that you pay for the privilege of partaking in society. Bob's new heart will enable him to go and make contributions which then might (or might not) affect you, but will affect someone else, who in turn might affect you etc. The alternative is dog-eat-dog jungle where all (but the richest assholes) who get sick die destitute. Sort of like America today...

... (or house) (or car) ....

Yes the nasty gubmint is giving away houses and cars to every illegal Mexican!

And don't forget all them illegal-alien-friendly channels on basic cable! Oh, wait, its actually a private enterprise that is making you pay for all them cable channels! Paragons of "free market", the agents of the "invisible hand"! Oh dear!

Re:Not the programming

[IgnoramusMaximus]

Things that benefit everybody (like a navy) are legitimate taxation (and constitutional). Things that only benefit are few are theft of labor, and it doesn't matter if we're talking about a slave picking crops for his master, or neighbors being forced to work to earn money so Bob gets a new heart/house/car. We're still talking about a human rights violation.

And of course you get to be the one making the decision as to what is "benefiting everybody", naturally, no? Like for example the fact that in many places a navy or an army does dick all because the terrain prevents any feasible invasions and at the same time a pandemic of heart-disease causing virus can kill far more then any foreign navy could manage. Or the fact that a society in which medical care costs are under control and removed from consideration of individual businessmen is actually more friendly to small enterprise, which then benefits "everyone". One could go on.

But all of this is besides the point that taxation in a democratic society is by definition legitimate. What the taxes are being spent on is a matter of debate. However one thing is clear: a society which does not take care of its weakest members is pretty much pointless. Because it is the whole point of society that in it individuals can count for help beyond their own means. Otherwise we all might as well head for hermit cabins and shoot each other on sight for "trespassing" (which by the way is many a "libertarian" fantasy).

standalone cable internet, please

[mtrachtenberg]

I have to pay for basic cable, and then pay an internet fee on top of that, even though I never watch TV.

If internet is less expensive to deliver than TV, why oh why won't the cable companies just let me buy what I want and need, without paying for the "basic tier" of trash?

Re:Smaller Bundles

[0xdeadbeef]

Don't bother. They're turning to dumbed down dreck like everything else.

The grouping is from the content providers

[YesIAmAScript]

I'm not a fan of cable companies. Not in any way.

But the problem with the groupings right now is that the content providers force certain groupings. For example, if you want to offer ESPN and ESPN2 (what cable company could afford not to), then Disney says "okay, if you want to offer ESPN and ESPN2, that'll $2.40 per month per subscriber". Which is $2.40 which goes straight to your cable bill. But then they say "well, but we have this new channel, ESPNU (or Classic or Disney Kids 5 or whatever), if you offer that channel IN THE SAME PACKAGE AS ESPN, we'll give you ESPN+ESPN2+ESPNU for only $1.40 per month per subscriber".

So each year, the providers will basically force another channel into their bundle this way. So each year, each of these content providers is raising the amount of money they get from each subscriber. And the cable companies have to offer big bundles in order to meet the requirements from the content providers.

Furthermore, it gives all the advantages to the big companies who already have lots of channels in your package. They can launch a new channel easily while the small guys are locked out since the bandwidth is already being chewed up by the big guys' new channels.

The internet is definitely the disruptive technology that will stop this. That is, if the cable companies and content providers don't find a way to prevent you from streaming video directly.

There's no technological reason why this bundling is necessary. It's just because the companies (cable and content providers) have found it to their advantage so far. I feel it would strongly benefit the customers to enforce an end to this bundling.

Re:The grouping is from the content providers

[Brett Buck]

There's no technological reason why this bundling is necessary. It's just because the companies (cable and content providers) have found it to their advantage so far. I feel it would strongly benefit the customers to enforce an end to this bundling.

          Well, of course. And you got one of the more important points, i.e. forcing new channels into more homes, so the content providers can seel teh ads for more. But I think you missed one of the key points - that by including at least one thing in each package that *someone* wants, the cable companies get paid for ALL the content, which they can then use to pay off all the providers. That's why package include, say "Lifetime Movie Network", "Speed" and "Sprout" all in one. People who are seriously interested in getting the Speed channel are not the target demo for LMN! But you can sell the entire package for a high cost to everyone who wants Speed, everyone who wants LMN, and everyone who wants Sprout, for far more than you could sell the individual channels al la Carte. The providers get the same money from the cable providers, and the cable companies get more money from subscribers, 3. PROFIT

          Brett

Re:Sour economy?

[mcrbids]

I would NOT pay the $50 bill. I've pulled the plug, and started using Online + Netflix to cut my monthly bill by some $100. Got rid of the Dish DVR, the dual-tv plan. Now we (in my household) all use laptops and two workstations with big screens. We still have one of the old NTSC TVs for playing video games.

Online TV Rocks!

On-demand TV has an interesting quality - when you discover a show you like, you can immediately jump to see past episodes you missed. Case in point: Heroes. I just discovered this excellent fantasy show, but jumping in "mid-stream" leaves lots to be desired. I'm able to watch past episodes all the way back to season 1, in order, on my schedule.

There is no combination of Cable/Satellite/DVR that will give you this.

The result is that I suddenly have a desire to explore, try new shows for a few minutes, see if I like it. Sure, the chances of me liking some new show are relatively small, but the payoff is so high!

It's a whole new way of doing TV made possible by a decent quality 3 Mb Internet connection, Hulu, Netflix, and Cast TV

Re:If they broke up the channels a la carte

[Areyoukiddingme]

...may be forced to consider breaking up the big bundles of channels they now insist that consumers buy and instead offer individual channels or smaller groups of channels on an à la carte basis

But I am willing to pay for the good stuff, if I can be certain I will get GOOD STUFF.

That's just the thing. You won't get good stuff for your $1/month. For me, à la carte channels aren't unbundled enough. Try unbundling to the show level. Oh wait. We have that. It's called the Internet, and bittorrent.

This is where their entire distribution model falls down. They have a channel called the SciFi channel (oops, SyFy, my bad^W wtfstupidmarketing) that is used to cablecast... horror movies and fantasy movies. There's precious little SciFi on SyFy. So if they were offering à la carte channels, SyFy might make my list, but in fact it wouldn't because there's too little content on it that is the kind I want. I have no interest in an endless stream of man-in-a-rubber-suit horror movies.

USA network used to broadcast the Highlander series. I liked it, despite their minor obsession with the correct "formula" for characters leading them to introducing their own Wesley Crusher-esque guaranteed-to-accrue-far-more-power-than-he-ever-deserves character. But the Highlander series is long gone and does USA have anything else I want to watch? I don't know. Their odds are so low that I haven't bothered to find out. So scratch them off the list.

And on and on.

You see where this is going. I want to treat TV exactly the way I treat books. I want 100% of the offering free from the library, and I'll buy the individual works that I like well enough to read(watch) again, but I'm paying no more than $5 for it (for the decrease in entertainment hours vs a $7 paperback), and I want 98% of that money to go to the people directly involved in creating the entertainment ('cause that's where publishers are going to end up one day too). The studios are a giant parasitic growth on the back of the creative types capable of assembling a movie and I'm not interesting in feeding a parasite.

I see the Internet as the death of television as we know it. We'll see more episodic content where the producers don't proudly trumpet the fact that they have no plan at all for the story arc and denigrate their predecessors who did (I'm looking at you Battlestar Galactica), because the networks that screwed with shows in a vain effort to please sponsors and audiences simultaneously will no longer exist. Maybe we can get a spiritual successor to Babylon 5 that doesn't get strangely squashed and stretched by the vagaries of networks, canceling and optioning on a whim.

In short, the Network Age is passing and the Studio Age is upon us. The studio controlled by the creative types will create our entertainment and the distributors that have a stranglehold on the industry will evaporate, supplanted by a vastly more efficient distribution system.