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Greg2600

join:2008-05-20
Belleville, NJ

Will you save money?

That is my question. When most people get done picking channels.


Transmaster
Don't Blame Me I Voted For Bill and Opus

join:2001-06-20
Cheyenne, WY
said by Greg2600:

That is my question. When most people get done picking channels.

That is the 800 pound gorilla. The present bundling system in kind of like a supermarket. Instead of looking at the money made from an individual product a supermarket looks at to over all cash flow and have complex computer models to predict shopping habits. Before Thanksgiving really cheap turkeys. The stores make the money all of the stuff you purchase to go with that turkey, when "bundled" to gather the store makes money while the consumer actually saves money. The same could be said about the TV entertainment business. Because of the bundling process the consumer pays X number of bucks for a bundle, if they paid for each channel it would cost them more. The problem, of course is the vertical integration there is no competition for your dollar. So delivery companies can charge pretty much anything they want. In other words we are stuck with what we have.
--
I am quite sure now that often, very often, in matters concerning religion and politics a man's reasoning powers are not above the monkey's.
- Mark Twain in Eruption

PastTense

join:2011-07-06
united state
While this type of system could happen, along with cable companies cutting the cost for their bundles because there is competion (Dish, Directv, cable, over the air and various internet options), cable companies could well respond by increasing the cost of their internet services--where only a small fraction of the market has strong alternatives--and then only one--resulting in consumers being no better off financially.


FFH
Premium
join:2002-03-03
Tavistock NJ
kudos:5
said by PastTense:

cable companies could well respond by increasing the cost of their internet services--where only a small fraction of the market has strong alternatives--and then only one--resulting in consumers being no better off financially.

That is a sure lock on happening. As cable companies lose some TV channel business to streaming competitors the cost of Internet access will rise to cover their TV losses.
--
A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the public treasury.

Telco

join:2008-12-19
Reviews:
·Callcentric
It's already happening actually. I'd love to see all of those who claimed that Google FTTH is expensive, come here and explain the $74.95 for a 25/4 Comcast service starting today. That's $4.95 more already and does not include Comcast's other BS fees, for a fraction of the service.

BTW Have you ever noticed what they pay and receive in other Big Gov nations (exc Canada).

elray

join:2000-12-16
Santa Monica, CA
Reviews:
·Time Warner Cable
·EarthLink
reply to Greg2600
said by Greg2600:

That is my question. When most people get done picking channels.

It can't.

The only way ala-carte is viable is if consumers pay more, per-channel, and in total, than today's ARPU.

That is possible with Intel's proposal, but highly unlikely, since the content conglomerates are not going to be tempted with such a risky proposition.

Instead, Intel will end up marketing this technology as the best-of-me-too, and cable/premium content will require you have an existing relationship with a traditional pay-tv provider.


tshirt
Premium,MVM
join:2004-07-11
Snohomish, WA
kudos:5
reply to Greg2600
No, you won't save money.
But this is different, THEY are picking and choosing, not the end user, and not really the business side either, as there are other channels that cost more and yield less revenue. This is censorship.

JPL
Premium
join:2007-04-04
Downingtown, PA
kudos:4
reply to Telco
said by Telco:

It's already happening actually. I'd love to see all of those who claimed that Google FTTH is expensive, come here and explain the $74.95 for a 25/4 Comcast service starting today. That's $4.95 more already and does not include Comcast's other BS fees, for a fraction of the service.

BTW Have you ever noticed what they pay and receive in other Big Gov nations (exc Canada).

Two words to describe this: 'loss leader'. Google Fiber is cheap because they haven't passed on the full cost of operation to consumers yet. All new business start-ups start this way. When a new hair place opened up by my house, they were offering hair cuts for $8. More than 50% less than the competition. Think they're still only charging $8? Of course not. The price is right in line now with everyone else around them. What they offered initially was a promo price - it wasn't designed to earn a profit. It was designed to create flow - make you go into the store to try them out.

Again, this is nothing new. Amazon existed for probably 6 years before they turned a profit (heck, they still incur a loss for every Kindle Fire sold - expecting to make it up on you buying material to go on your Kindle). Verizon inititally really under-priced FiOS. Eventually the R&D gets paid off, though, and you've established a customer base. At that point you need to move into the black. Which means that you have to operate with a positive cash flow.

You can't make the assessment that Google Fiber is 'cheap' because you don't yet know what it will ultimately be priced for when it gets to that positive cash flow stage. My guess - it'll be right in line with everyone else in the market - and probably higher. I know the price of fiber has dropped, but it's still MUCH more expensive than laying coax. Installation alone for fiber is probably 2 to 3 times what the installation cost is for coax (cost of running service to a new home).

And the cost in those 'big government nations' is hidden. Ok, you don't pay as much for monthly service on some things. But if you're willing to incur a marginal tax rate of 90%... go right ahead. The point is - you're still paying for it. It's just not going directly to the company. You make it up (and then some - since government is far from the most efficient conduit of spending) in taxes.

Skippy25

join:2000-09-13
Hazelwood, MO
reply to elray
That is your assumption and the same BS the industry spouts out as though we should just take it at face value.

I for one do not agree for 2 reasons.
1.) The industry claims it and they are full of crap so pretty much anything they say when it comes to consumers the opposite is true.
2.) There are only a few channels that are very expensive that make the entire package expensive that many would not subscribe to. Disney and ESPN channels are just 2 examples.

Regardless, even if I end up spending the same amount or even a little more to get the channels I want that is my choice as opposed to the current forced "choice" we live with now.

Most channels cost less than a dollar per subscriber and can be sold at a dollar given them plenty of profit on them. Assuming of course that they will want to charge more because they wont be able to force the providers into X sub numbers with forced tiering it will cause the channels to be sold at a true market value. This will probably bring the cost up a little per channel. How much? No one will know until it is done, but what we do know is that the channel will charge what they can and we will pay what we are willing.

Let's not forget, ala-carte doesn't mean there don't have to be bundles. They can still bundle based on X channels, themes, channel owners or whatever other creative way they want in ADDITION to having the channels available on a completely ala-carte option.
Expand your moderator at work

JPL
Premium
join:2007-04-04
Downingtown, PA
kudos:4
reply to Skippy25

Re: Will you save money?

Your numbers just aren't correct. There are examples out there today of what such pricing would be like. For example, Verizon carries a channel called Wealth TV. It's a VERY cheap channel for them to carry. I think they get it for something like 4 cents/subscriber. The thing is, Wealth also has an ala carte option - you can get the channel through devices like Roku. How much does it cost you to subscribe to the channel that way? $5/month. Why so much? Because of how the business model works.

With the traditional model that cable companies follow, the channel gets paid per subscriber that has access to the channel. Whether they watch the channel or not. This is why content providers really want cable companies to carry their channel on the lowest possible tier. The lower the tier, the more subscribers that have the channel, and therefore the more money the content provider makes on the channel. But if you were to pay for the channel directly, the content provider has to charge you alot more for the channel than they charge the cable company, because there are far fewer people who would actively go pay for the channel. And since offering a channel's content isn't free... they have to get so much cash-flow to make the channel profitable. And remember, this is a tiny little channel that costs cable operators next to nothing to carry. Imagine how much an ESPN or Disney or Fox News would cost you ala carte.

I'm not a big fan of the ala carte option mainly because, at the end of the day, you'll spend just as much as you do now, but only get a fraction of the channels. If I'm going to spend $100/month anyway, I would much rather have 300+ channels for that money. Even channels I wouldn't normally care about occasionally carry program that I like. I don't think the reason ala carte hasn't taken off is because of some conglomerate somewhere stopping it. I think it's because the current model is far more efficient at providing the biggest bang for your buck. These companies, in other words, are serving the wants of their customers. Doubt that? Just peruse some of these forums - how many people get their panties in a twist over channel counts? Alot. People get really upset when the provider they use has fewer channels than other providers. If the market really was demanding ala carte, I think these guys would be falling all over themselves to provide it. I just don't think the demand doesn't really exist for it.

elray

join:2000-12-16
Santa Monica, CA
Reviews:
·Time Warner Cable
·EarthLink
reply to Skippy25
said by Skippy25:

That is your assumption and the same BS the industry spouts out as though we should just take it at face value.

I for one do not agree for 2 reasons.
1.) The industry claims it and they are full of crap so pretty much anything they say when it comes to consumers the opposite is true.
2.) There are only a few channels that are very expensive that make the entire package expensive that many would not subscribe to. Disney and ESPN channels are just 2 examples.

Regardless, even if I end up spending the same amount or even a little more to get the channels I want that is my choice as opposed to the current forced "choice" we live with now.

Most channels cost less than a dollar per subscriber and can be sold at a dollar given them plenty of profit on them. Assuming of course that they will want to charge more because they wont be able to force the providers into X sub numbers with forced tiering it will cause the channels to be sold at a true market value. This will probably bring the cost up a little per channel. How much? No one will know until it is done, but what we do know is that the channel will charge what they can and we will pay what we are willing.

Let's not forget, ala-carte doesn't mean there don't have to be bundles. They can still bundle based on X channels, themes, channel owners or whatever other creative way they want in ADDITION to having the channels available on a completely ala-carte option.

1) The industry is not full of crap. They're in business to make a profit, and absent legislation to the contrary, they are generally allowed to negotiate content bundling agreements, much to our collective dismay.

2) We all know that there is a Sports Tax, which 75% of pay to subsidize the 25%. But industry is very comfortable with that model, and they aren't going to change it. Even Google forces its KC subscribers to pay for it.

You affirmed my point - industry isn't going to permit "ala-carte" unless you and I pay more than ARPU not less. That can work, if and only if they let us choose 2nd- and 3rd-tier channels that we currently have to buy in bundles, likewise for premiums.

The figures that you cite are meaningless. Sure, MDU/bulk/headend, CATV and satellite pay $.10/drop/channel for some channels, others are $1. That doesn't carry over to ala-carte - where rates would have to at least 3-4x more or greater to be revenue-neutral to the content seller, plus cover the additional customer service overhead for channel delivery and billing management.

Industry is NOT going to abandon the last-mile guaranteed bulk revenue for the headache of direct-to-consumer sales, via IPTV, OTT or the Roku channel store.

Under normal conditions, "greed" would drive them to do so, but they all know the pitfalls of taking responsibility for delivery of streams in a net-neutral world and doing customer service, all the while netting less revenue.

Crappy as it is, CableCo has a pretty good handle on customer service and repair. Do you really want to talk to Santa Domingo, Cebu, or Mumbai when you can't stream Matlock?