Slashdot Mirror
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."
Food, drinks, legroom, checked baggage.
The thing about cable is that large majority of people don't want all the crap they force down our throat.
For example there are romance centered channels, sports centered channels, reality show channels, cartoon centered channels, science centered channels and fake science centered channels (which USED to be real science centered channels).
If you are a family with a wide array of interests than you might probably want all of that.
But I have zero interest at all on the sports channels (total geek), fake science channel (TLC, I'm looking at you), reality show channels, etc.
excitingthingstodo.blogspot.com
Cable (and IPTV/satellite) is unbundled where I live. Guess what happened? People ended up getting less channels, paying more per-channel, and at the end their monthly bill ended up about the same. Now the CRTC is likely going to force unbundled cable to be required nationwide, and I expect to see the same thing happen in all other provinces.
Cable companies will set their prices so that their ARPU remains unaffected. The vast majority of people will save no money. A small number of people who pick an extremely limited number of channels might save some money.
But this is a weak analogy at best. I now pay for a bunch of sports channels and kids TV that I don't care about. Your example of internet access; if I'm not going to use it on the plane I don't have to pay for it. Same thing for the light snack or entertainment. I don't have to pay for it. Or I can bring my own candy bar. But with cable, if I want Channels X & Y, I have no choice but to get the package that offers Channels M through Z whether I want them or not. The idea that now you have to pay for a lot of things individually on airlines that you used to get for "free" assumes that I cared about any of those "free" things in the first place.
The problem is, getting rid of the things that you don't want and only getting the things you want, doesn't necessarily lead to lower prices.
People want unbundling of cable channels because they have done the following math:
200 channels for $100 a month = 50 cents per channel.
Therefore, if I pick only the 50 channels I might ever possibly care about, my bill will be 50 x 0.50 = $25, a substantial savings.
But there's nothing forcing the cable company to charge the same price for every channel. If you have odd tastes and most of the 50 channels you like are very unpopular, you might actually get your 50 channels for around $25.. But there's nothing stopping the cable company from charging much higher prices for the channels they know are the most popular, so, you could end up choosing your 50 channels and still end up paying about the same amount of money that you pay now for 200 channels.