majortom64
join:2004-09-12
Skokie, IL
| reply to UncleDirtNap
Re: Raising Rates
said by UncleDirtNap  :>Want lower rates and more options write your representative and demand an end to forced bundling. Moving to a la carte channel selection will not decrease bills, it will just decrease choice. ESPN (one of the most expensive basic tier channels costs MSOs about $2-$2.50 per subscriber per month). Smaller channels that are bundled with that tier usually get under $0.30 per subscriber per month.
Consider a system with 100,000 subscribers. ESPN earns $200,000 (low end estimate) and small channels earn $30,000 a month. If cable companies are forced to offer a la carte pricing and 50% of subscribers decided that they did not want to pay for ESPN, Disney would either have to make less money (cutting all other costs of running this network) or raise its price. Given that those who wanted to keep ESPN are probably somewhat less price sensitive, doubling their price to make up their revenue shortfall is Disney's most likely response. That means, those subscribers who continue to receive ESPN, will pay more, either raising their overall bill or causing them to drop other channels to make up for it.
Smaller channels will be even more drastically affected. If they are not getting bundled customers their prices will have to increase much more and many will just cease to exist.
/carmi |
