Slashdot Mirror
The Cable Industry's a La Carte Bait and Switch
jfruhlinger writes "For years, cable operators have insisted that a la carte pricing, in which users could chose the channels they want, would undermine the both their own business models and the existence of important but less-watched channels currently wrapped into bundles. That's why it was surprising to hear that major cable companies are privately working towards offering a la carte pricing. But when you look at the details, it seems more like a bait and switch: those lesser channels (which pay cable companies for their place on the dial) will still be bundled with the local stations cable companies are required to provide, whereas pricey sports channels (which cable companies have to pay for) will become HBO-like premium services."
Just how is this bait and switch?
"That's why it was surprising to hear that major cable companies are privately working towards offering a la carte pricing. But when you look at the details, it seems more like a bait and switch: those lesser channels (which pay cable companies for their place on the dial) will still be bundled with the local stations cable companies are required to provide, whereas pricey sports channels (which cable companies have to pay for) will become HBO-like premium services.""
Okay so the channels that are cheap or that pay that cable companies will be "included" with the local channels. The channels that are expensive will be charged for! That is the single must fair and logical way of doing things that I have never heard.
For years the cable companies where subsidizing the cost of ESPN buy bundling it with other channels. I wonder how many people will pay for ESPN when they see the real cost. Heck I think it is great. I could get the channels I want and pay the real costs of those channels.
How the heck is this bait and switch. This is actually dumber than the summary that implied that using old missiles to launch satellites was something new.
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
Some people don't like watching sweaty men touching each other over and over. Frequently piling on top of each other in the guise of chasing a "ball". But hey, if that is your thang, have at it!
I think the parent was saying more about supporting things he DOESN'T partake in. If he doesn't like sports, and they take sports out of the bag, then there is more chance his $ will go to subsidizing something he does like. Note, I have NO idea what %es or even if they are relevant. IMO, they'll win in the end anyway.
Anyway, back to your sweaty-men-on-top-of-one-another Steelers dream. :D
my cable company raised rates so that basic cable + basic internet was 125$ a month.. i told them they could keep the bill and the service since they seem to value it more than i do.
'...if only "Jumping to a Conclusion" was an event in the Olympics.'
But revenue is not all profit. The cable company pays the sports channels for each subscriber that receives the channel. The cable company builds a tier and sets a price for it that includes the amounts that each channel demands. I don't know if the cable company's cost for the tier is the same as what you pay for the tier, or if the cable company adds in a little extra, but I suspect there isn't much profit there. If all of the Fox Sports, ESPNs, and the college sports networks are on a tier that costs the customer $50, I suspect that's about what the sports channels are demanding. If so, then the cable company doesn't really care if you get it or not because they don't lose any profits from you dropping that tier, their profits would all come from the amount you pay for basic service.
The tiers then exist to keep customers happy, allowing those that would not buy any service without the premium content to get it, while others pay for the basic package. The cable company has every reason to give customers a low priced option for the basic package, because every additional basic subscriber is almost entirely profit because the basic channels are are nearly free, but the company still collects the fee for your basic service, which is why the cable company can bundle them for the basic price of service.
If they are going to offer a la carte, I would like the smallest tiers possible. Besides basic, the only channels I'm really interested in are ESPN and my regional Fox Sports affiliate. Those are the only two channels that offer games I'm interested that aren't on my basic service tier. Going forward, I might be interested in an educational tier since our children are entering the age were they might benefit from access to the History channel as well as others. As it currently works, I don't think they offer tiers of completely similar programming because the companies that own the channels demand that all of their channels be on the same tier even if they don't really have the same market focus (ESPN, ABC and Disney Channel). Why do the companies do this? They only have to get you to want one of the channels, and they force you to pay for all of them. The cable company is just the middle guy who signs the contract that allows them to carry the service, then advertises you to buy the product.
I find it ridiculous that every time a channel threatens to pull service from a cable station, the channel demands that customers call the cable company and tell them to negotiate with the company, which gives the channel negotiating leverage to ask for more money in programming fees, which will eventually be passed on to the customer in the next annual price increase. Every freaking time, I'm rooting for the cable company to hold out, starve the channel of viewers, so they'll eventually cave in without getting more money to the cable company to drive up the next round of price increases. But the channels always wait until right before some big game that will be on their channel (a playoff game involving a local team, or the NCAA tournament), then threaten to pull their programming so customers will frantically blame the cable company not realizing they are asking to pay more for their cable bill.