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Unbundling Cable TV: Be Careful What You Wish For
schnell writes Consumers have long complained about the practice of "bundling" cable services and forcing customers to pay for channels they don't want — and an increasing number of "cord cutters" are voting with their wallets. But an article in the New York Times suggests that if cable companies are finally forced to unbundle their services it may actually result in higher prices and worse service. From the article: "there's another, more subjective dimension in which the rise of unbundled cable service may make us worse off. It's possible for a market to become more economically efficient while becoming less pleasant for consumers. For a prime example, head to your nearest airport."
Head to my nearest airport and observe what?
When one revenue stream goes away, corporations will gouge their customers in other ways to make up the difference, or make more money in the long run.
The cable companies are screwing us now, and will continue to screw us in the future using whatever means available to them.
It's a rigged game, played by people who feel entitled to the revenue, and who have more power than we do.
This isn't a surprise, nor should it be.
Lost at C:>. Found at C.
Worse service? Than a cable company? I'm 99.99% sure that is impossible.
With fewer channels on average the value of the advertising per channel should go up. So while Logo will probably end up with less money and cost more if you really want it or go away completely. Cartoon network, AMC, and other popular channels might actually drop in price so they can sell more ads.
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
"May" actually result in high prices and worse services? Of *course* it'll result in high prices and worse services, when the cable companies are *forced* to do anything. What you think, they'll go "ok we've learned our lesson, we're going to play nice now".?
The real answer is to starve them out. Use alternate services whenever possible. Don't give in to cable. If there's a series you want to see, wait for netflix or hulu. Or lower your expectations for TV-brain-to-mush time. I'm not a "kill your tv" person but TV just isn't important enough to put up with cable in any fashion.
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
The bigger problem is that a lot of these channels will probably go away if they get rid of bundling. A lot of the smaller niche channels survive until they can support themselves by being bundled with more popular channels (and many of them never make any money and totally live off of other channels). If bundling is gone, then every channel basically has to be making money in a short amount of time or they will be gone.
For example, I would bet dollars to donuts that the Sci-Fi channel didn't make any money for years. It survived because it was bundled with other channels so cable companies were forced to carry it. Basically, unbundling means the channels downgrade to the lowest common denominator because no one will be willing to spend the money on hoping a channel can find it's audience.
"Information wants to be expensive" - Stewart Brand, the same guy who said "Information wants to be free"
The real problem with cable companies is not that they "bundle" to create fixed service packages - it is that they are effective monopolies providing an essential service, that escape any meaningful regulation that such a model absolutely requires for to protect the interests of the public. As long as this situation persists any service pricing scheme is going to gouge the customers for Internet access as well as TV access.
The weakness of regulation is nicely conveyed by the the FCC itself:
So no regulation by any government body for "non basic services". And "basic service" regulation is entirely optional, and left piecemeal to lower levels of government where it is always ineffective in exercising oversight for national corporations which practice cartel-like collusion to protect their margins and market share.
Second class citizen of the New Gilded Age
Good channels survive. For example the Sci-Fi channel does not exist. There is an abomination called the SyFy channel that should die a horrible death. Why? They screwed themselves. Before they even changed their name, they abandoned good Sci-Fi for wrestlers talking about vampires for some god forsaken reason.
But getting rid of bad channels is not a bad thing. New channels will take their place. Good TV will still find a place to get made. They need to fire those idiots and let someone else with more brains and less marketing have a go at it.
excitingthingstodo.blogspot.com
This is true, but... do we really need channels at all?
Personally, all I'm interested in is shows. There are a handful of shows on TV every season that I want to watch, and I don't care what channel they're on. I don't care what time slot they're on. All I actually care about is, when is it available for on-demand viewing?
My problem with bundling is that your cable dollars *underwrite* crap like the Kardiashian shows, whether you watch them or not. I don't, but through my cable bill, I'm as responsible for the Kardiashians (as a media entity) as much as anyone.
I'm surprised more people aren't irked at this aspect, that as cable subscribers, they are funding any shows/channels they detest.
False.
Cable channels ALREADY have prepared for a la carte. And they're not going the "better channels" route. They're going the "more eyeballs" route.
First, you'll notice that your favorite programs are now spread across three or four channels. What used to be on History is now on H2/H3/other associated channels now. What used to be on Discovery is now on Science and the other channels.
Next, have you noticed how the main channels like Discovery and History have gone practically all reality? Guess what? That's on purpose - because those kind of shows are popular with the public and get the eyeballs in. More eyeballs means more people wanting that channel.
Your model is called the PBS model. No, we're not going to get more PBS-like programming channels (ever notice how PBS, who doesn't worry about eyeballs, always seems to keep a high level of programming and no ads?). Even so, PBS is under attack because of taxpayer funding through various means.
In the battle for subscribers, you don't get them by producing thoughtful shows. You get them by producing crap that gets eyeballs in. Few want good documentaries on World War II. More want more Pawn Stars (and they want drama, not crap about crap), more people racing each other through dirt countryside and all that.
Oh wait, you'll need ot purchase 4 channels now for that to spread the eyeballs around, too.
In short - only two ways to get good programming - PBS, or subscriber funded channels like HBO. The other channels? They're going to fight tooth and nail for eyeballs.
And yes, it'll cost more. After all, Discovery by itself is around 25 cents/subscriber/month, with all the bundling they force, it's probably closer to 40-45 cents. You can bet your cable provider will charge 25 cents or more for each channel. Maybe a whopping dollar per channel (right now, less than $1 of your fees are for Discovery).
You want to see savings? ESPN charges $10-15/subscribe/month. Probably more because of bundling.
Trust me, the networks are all prepared for this day. And they're not going after the people who want to see smarter TV programming. They're going after the lowest common denominator because there are more of them than you. History and Discovery catering to you? Probably a few subscribers. Cater to the crowds? At least 10 times, if not more subscribers.
I have a couple friends who are senior people at Cable companies I am not sure it is always the Cable companies fault.
1. Cable companies have to pay distributors to license feeds
2. Those distributors bundle their channels. One or two popular channels, 8 - 10 undesirable ones. Cable company has to buy the whole block, it is priced as a monthly charge per subscriber to the tier that includes the block.
3. Distributors are always trying to raise the rates. Thats when you get the websites about "Tell Comcast you want to keep your channels", because the cable company is trying to hold the line on price increases
4. ESPN is the most expensive part of the cable bill. Last I saw the numbers, it cost the Cable company $5 per subscriber per month. It is probably higher now. That is why there has been an explosion of Sports Networks on cable. They are all trying to get that sweet sweet cash flow that ESPN gets.
5. The content providers have been fighting al a carte pricing. It will signal the death of a lot of channels that get few viewers. In the end, it may lead to less choice
My Cable company was very slow to get a lot of HD channels. My friend told me it was part of their strategy to hold the line on prices. They refused to pay extra to include HD feeds. Their belief was, the production company already had sunk the costs into producing the show in HD. It cost them extra to produce a non-HD feed. A customer who was watching the HD channel, was not benefiting from having the non-HD channel available too.
Maybe if I ever had Comcast, my attitude would be different, but I feel like my Cable company is doing what they can to control costs.
You can thank our Republican friends for this. Apparently, they've seen to have forgotten the happy days of growing up on Seseame Street and The Electric Company.
You have to pay for baggage, seat choice, etc, etc.
No you don't "have to". I don't pay for baggage, I carry a backpack. I don't pay for a seat choice, I take what I get. I don't pay for meal, I pack a PBJ. I never pay a dime above the base fare, with is considerably lower than the old "full service" fare. You are just whining that no one else is subsidizing your choices.