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 ·Hargray Cable
| reply to morbo
Re: Why should they? said by morbo:said by elray:ala-carte billing, unless she thinks it saves money, which it can't.
This statement is completely untrue. A la carte can be a success if implemented correctly. That means it cannot be shoe horned into the current model. Customers respond to value - they would love a true la carte model if providers are willing to offer it. The real problem is profits with al a carte. Let's say the cable company makes 20% in profits, if you bill is $100 a month they end up with $20. If your bill is $50 they end up with $10 in profit so it helps them to have a bunch of channels you never watch. Numbers are made up but that's the idea. They have fixed costs which won't change whether you have a bunch of channels or just a few, another problem as far as offering al a carte. | |
elray
join:2000-12-16
Santa Monica, CA | said by Corehhi:said by morbo:said by elray:ala-carte billing, unless she thinks it saves money, which it can't.
This statement is completely untrue. A la carte can be a success if implemented correctly. That means it cannot be shoe horned into the current model. Customers respond to value - they would love a true la carte model if providers are willing to offer it. The real problem is profits with al a carte. Let's say the cable company makes 20% in profits, if you bill is $100 a month they end up with $20. If your bill is $50 they end up with $10 in profit so it helps them to have a bunch of channels you never watch. Numbers are made up but that's the idea. They have fixed costs which won't change whether you have a bunch of channels or just a few, another problem as far as offering al a carte. Nope. There is actually much greater profit potential in ala-carte. Simply put, if people have the choice of assembling their own content packages, they will buy more volume.
The cable industry isn't resisting ala-carte. As a last-mile distributor, they would make the same or greater margins for transport, delivery, and servicing the accounts.
It is the content owners who are reluctant to part from the status quo, who are afraid to let their wares compete for customers, even though many would make greater profits doing so. | |
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