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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."
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.
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
You missed the point... again.
The "airport model" means that "normal" or base service is degraded into total uselessness, and you have to pay to add functionality until the service is no longer useless and/or intensely unpleasant. This may or may not be cheaper than what you had before... but you can't complain because you opened the door for a-la-carte pricing, which will inevitably be used to increase profits.
To ensure perfect aim, shoot first and call whatever you hit the target
However, what's wrong with bringing fewer bags, if you want to, or else paying the going price for the bags you really need?
The cognitive burden of facing all those "decisions" and the constant bombardment of the nickle and diming fees makes the entire experience less enjoyable for everyone.
Imagine a game where you paid a fee to unlock each level, each quest, each item. If you don't play the game much, its more economical this way.
However, the game itself isn't much fun because instead of playing it you spend all your time deciding whether its really worth another 50 cents for a bigger bag or whether that dungeon is going to be worth $2 or whether equipping this item is really worth another 25 cents...
I'd MUCH rather pay $30 for the game, and have it all available, even if I don't end up exploring every nook and cranny.
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.
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.