| Price per channel... Speaking as a small cable operator, there's a lot of misconceptions being floated here as gospel truth. Since I'm contractually not allowed to tell my customers what I pay for a particular channel, it's difficult for me, as an operator to justify what I am forced to charge for programming.
To address a few things that have been raised:
1) Cable companies absolutely DO pay per subscriber for a particular channel, whether you watch it or not. There is a discount for exceedingly large numbers of subscribers, but it barely approaches 10%. Companies also usually tie lower rates on one channel (ESPN, say) to carriage of (and, eventually, payment for) a less valuable property (like ESPNU, Toon Disney, or the like).
2) Small cable operators (we still represent about 10% of the customers in the US) lobbied for the RIGHT to offer programming a la carte. The programmers (including larger cable companies that play "both sides of the fence") fought it tooth and nail. Requiring a la carte introduces a logistical nightmare (see below) but the right would let a cable company bump any channel that charged too much (*cough*ESPN*cough*) from the basic tier to a pay service like HBO.
3) A la carte, as sweet as it sounds, would create a logistical nightmare for cable companies. With thousands (or tens or hundreds of thousands) of subscribers, the monthly billing reports if everyone was allowed to pick from a menu of 600 services would be astronomically ridiculous. Would you like to have to file and read through a 10,000 page report?
4) High rates due to escalating programming costs are driven higher by rises in gas prices (trucks need fuel), electricity (cable plants need power), pole attachment leases (lines have to hang somewhere), insurance (everyone needs insurance), and employee salaries (people have to be paid). Just to keep pace with the market, cable companies have to raise prices about 5-10% per year. They try to compensate customers by getting more channels, in the hopes that more options will soften the blow.
5) Most cable companies have built their plants with their OWN money. They are not like the phone company in getting subsidies from tax dollars. In fact, in most cases, cable companies also pay local and city governments for the (non-exclusive) privilege of selling you programming (which you can refuse to take).
6) As more people switch to other providers, the fixed costs of running a cable plant (like power, employees, pole rentals, and the like) have to be covered by a smaller number of customers. Which forces companies to raise rates just to pay their bills.
I don't really expect to change anyone's mind, but maybe the next time someone raises the issue of cable rates, you'll be better informed. |
