Ala Carte? No Thanks!

[Greg Bimson]

Every one of the posts after mine do not go to the REAL argument here. I give up. You are all correct! Choice is bad. No way the world could work if you have a choice!

I believe your passion about this Tony, honestly. However, I would want you to think of this in another fashion:

I want the HBO flagship station for $2. After all, on DirecTV, there are eight standard definition HBO stations, and the HBO package costs $13 a month. The $2 I am proposing is more than an eighth of the price, so everyone should be happy with this arrangement. I want my choices!

That is all anyone needs to understand about a la carte. Choice isn't bad, but one can only pick from the choices that are given to them. I cannot get a five pack of Coke nor a Swanson Salisbury Steak TV dinner with green beans. Just because you and many others believe Discovery and ESPN are different products doesn't make it completely true.

 

[BabaLouie]

That is all anyone needs to understand about a la carte. Choice isn't bad, but one can only pick from the choices that are given to them. I cannot get a five pack of Coke nor a Swanson Salisbury Steak TV dinner with green beans.

No, but you can buy a single 20 oz. bottle of Coke, and you can buy a steak TV dinner without taking a chicken TV dinner...At the supermarket, there are some things you have to buy "bundled," but there's a whole lot of things you can buy "ala-carte." By your own analogy, when it comes to satellite TV, we ought to expect SOME channels to come bundled, but we also ought to be able to buy a whole lot of them ala-carte. In any case, when you go to the supermarket to shop, you certainly don't have to take every item in the whole aisle!

The supermarket analogy applied to satellite TV: the most popular channels would be available ala-carte; some of the less popular ones would be available only in mini-bundles (tiers). Of course, if the store wants to offer you a cart-full of groceries of THEIR choosing, you would expect to get a better price per item in that cart.

 

[BabaLouie]

BTW the cost to produce something is NOT what retailers get product for. Some of you need to work in retail for a while to see what the real mark-up is on most stuff. You would be surprised how LOW it is!

See ya
Tony

You are correct. I worked in the grocery retail grocery business for years--I know.

 

[riffjim4069]

The subscribers have a choice.

They really don't have a choice since all the choices are being decided for them by a handful of programmers. A good case in point is the ESPN cartel. Although I personally love sports, many do not. Why should they have to pay for a handful or more of the ESPN channels with a basic cable subscription when they don't want them? Additionally, while I love ESPN and ESPN2...I certainly don't want ESPNNews, ESPN Classic, etc. - dump 'em or make someone else pay for them. I guess it's all about how one interprets the word choice; however, it it clear that people do not feel they are being provided with fair and flexible programming options. Again, A La Carte does not impact ones ability to subscribe to a "Mega Programming Pack"...if they so choose.

I was hoping additional cable providers such as Verizon and AT&T would offer more flexible and customizable programming options, but the Telcos have followed suite with cable/satellite (what choice do they really have?) and IPTV offerings have been meager.

I usually don't do this. But I am getting a little more cantankerous as I am getting older: prove collusion and packaging fixing. Collusion only occurs when two entities get together to harm a third, while "packaging fixing" occurs more often than you'd believe. Just so that everyone is on the same page:

I must admit...collusion is a strong word, and a difficult legal standard to prove in a court of law. Also, typing 6 words per minute on a PDA vice 60+ words per minute on a keyboard tends to affect my thinking. However, it does not alter my firm belief that our current system is flawed nor my siding with Chairman Martin in support of a la carte.

Will a la carte save customers money? Perhaps, but probably very little. Will the shift to an a la carte system be a pain-in-the-arse for cable/satellite MSOs. Yes, but they will adapt and overcome current limitations in their delivery and tracking systems; those who are better prepared and adaptive will thrive, while those slow and inflexible will have difficulty. Will a la carte have an adverse impact on programmers? Initially.....Absolutely! However, I do believe that a la carte will radically alter the business and competitive landscape of how programming is packaged and delivered to customers, which will be a "good thing" for consumers in the long run.

While I very much value your keen insight into these matters, as a paying customer it is my opinion the current system sucks! In addition to Chairman Martin, my opinion is shared by the vast majority of the American public. We want more programming options, and we don't want to pay for programming we didn't order. Each channel should be sold individually and leave it up to the MSOs to device how they wish to group, package and bundle their offerings....not ESPN and not Lifetime Networks!

In retrospect, legislation will (unfortunately) be required to make the programmers do what they should have been doing all along. It if looks like a duck, walks like a duck, and quacks like a duck...shoot the damn duck and let's have dinner!...:

It's time to turn the stale old page...and move to the Chapter titled "A La Carte".

 

[Greg Bimson]

Everyone avoided my HBO question...

No, but you can buy a single 20 oz. bottle of Coke, and you can buy a steak TV dinner without taking a chicken TV dinner...

But in this fashion you've made a choice, from the choices given to you. I go and buy 5 20oz. bottles of Coke for my "five-pack", and the six-pack is much cheaper. If I want green beans, there is only one Swanson meal that contains the green beans. Or, I can do without the beans and get the corn with my Salisbury Steak dinner. It is a choice from those available to me. If I want something different, I have to cull together some kind of way to do it, and it will usually be more expensive.

While I very much value your keen insight into these matters, as a paying customer it is my opinion the current system sucks! In addition to Chairman Martin, my opinion is shared by the vast majority of the American public. We want more programming options, and we don't want to pay for programming we didn't order. Each channel should be sold individually and leave it up to the MSOs to device how they wish to group, package and bundle their offerings....not ESPN and not Lifetime Networks!

How much is that check you write to ESPN and Lifetime? You don't write a check to ESPN and Lifetime? Then how are you paying for them? You pay your provider for a package of channels. If you order America's Top 100, Choice Plus, IO Gold, whatever, you are ordering a package of channels. If you don't want certain channels, so be it.

And that is why the programmers get to negotiate the tiers in which their channels are placed. Instead, it appears everyone wants a law that counters the "free market", the ability for two entities to come to an agreement without government intervention.

Once again, I want only one HBO channel. Now tell me how you fix that.

 

[riffjim4069]

And that is why the programmers get to negotiate the tiers in which their channels are placed. Instead, it appears everyone wants a law that counters the "free market", the ability for two entities to come to an agreement without government intervention.

Once again, I want only one HBO channel. Now tell me how you fix that.

It's not an easy fix and a whole lot of Industry experts can't agree how to best resolve these issues. The perception is the current system is broken; I tend to agree with this assessment. A la carte may very well not fix the problems. In fact, a la carte may actually create many more heartaches and disappointment when implemented. I am certainly no expert, but my gut reaction is to do something to improve the competitive landscape vice doing nothing. Perhaps I am wrong, but I do know that I am not ecstatic with the status quo.

 

[BabaLouie]

But in this fashion you've made a choice, from the choices given to you. I go and buy 5 20oz. bottles of Coke for my "five-pack", and the six-pack is much cheaper. If I want green beans, there is only one Swanson meal that contains the green beans. Or, I can do without the beans and get the corn with my Salisbury Steak dinner. It is a choice from those available to me.

Interesting how you choose to ignore so many product offerings that would refute your case! Do you have to buy a whole bag of apples? No--you can buy just one! Do you save money by buying a bag? Maybe, maybe not...You can buy a jar of mayonnaise without buying a jar of ketchup and a jar of mustard, and the price for the jar of mayonnaise is going to be the same either way! Yes, if you want to buy five 20 oz. cokes, it will cost you more per unit than in the six-pack... but you can buy five bananas for the exact same price per pound as it costs to buy six bananas!

If ala-carte and small tier offerings were available, with competition, before long I suspect you would find the same kind of range of results. Did more consumer choice destroy the grocery business? No--and it would not destroy the satellite TV and cable businesses. Ironically, LACK of choice may eventually be their undoing. These businesses are in business to make money, that's true, but they need to understand they are also there to serve the customer. When they forget the latter, it will come back to bite them.

 

[BabaLouie]

Everyone avoided my HBO question...

Once again, I want only one HBO channel. Now tell me how you fix that.

I'll tell you how you DON'T fix it...just have the sat and cable providers and programmers continue to do as they please. Then one day, all that will be available is an "everything" package for big $$$/month, take it or leave it. The folks who can easily afford it, and who love the providers, will be happy, and they will tell the rest of us that if we don't like it, we can choose to just not subscribe.

 

[Greg Bimson]

If ala-carte and small tier offerings were available, with competition, before long I suspect you would find the same kind of range of results. Did more consumer choice destroy the grocery business? No--and it would not destroy the satellite TV and cable businesses. Ironically, LACK of choice may eventually be their undoing. These businesses are in business to make money, that's true, but they need to understand they are also there to serve the customer. When they forget the latter, it will come back to bite them.

I'll agree with that.

But then I need everyone to remember that some people are complaining they cannot get "a la carte", yet 85 percent of the nation subscribes to multichannel services. When it becomes more like 60 percent would be when you see a shift in how the business is run.

 

[Greg Bimson]

I'll tell you how you DON'T fix it...just have the sat and cable providers and programmers continue to do as they please. Then one day, all that will be available is an "everything" package for big $$$/month, take it or leave it. The folks who can easily afford it, and who love the providers, will be happy, and they will tell the rest of us that if we don't like it, we can choose to just not subscribe.

As evidenced by the proliferation of digital cable, we are in a cycle where programmers and MSO's are allowing more packs to be sold. So the move to only one "everything" package is not going to occur.

The fact is people are getting angry that the MSO's raise rates yearly by 4 to 12 percent, yet only 40 percent of a bill is going to the programmers. Why not demand the MSO's to take less profits?

 

[TNGTony]

I believe your passion about this Tony, honestly. However, I would want you to think of this in another fashion:

I want the HBO flagship station for $2. After all, on DirecTV, there are eight standard definition HBO stations, and the HBO package costs $13 a month. The $2 I am proposing is more than an eighth of the price, so everyone should be happy with this arrangement. I want my choices!

I knew the HBO example would come up eventually. HBO. Just HBO, not the other 8 channels is $14.99. The rest are free. You can choose to only watch HBO but the rest are free. HBO all by its lonesome was $10 a month two decades ago!

As far as expense is concerned a la carte vs package IS IRRELEVANT!!!! I have mentioned several times now, but it's not sinking in to others that I may pay more per item if I don't get the mega-pack, but I could pay less overall if I wanted to GIVEN a CHOICE!



[/quote]That is all anyone needs to understand about a la carte. Choice isn't bad, but one can only pick from the choices that are given to them. I cannot get a five pack of Coke nor a Swanson Salisbury Steak TV dinner with green beans. Just because you and many others believe Discovery and ESPN are different products doesn't make it completely true.[/QUOTE]

You can buy just greenbeens anywhere. You can buy 5 cans of coke anywhere. Heck I buy two 12 oz cans from a 50 cent machine and save 20 cents over the 20 oz bottle purchased over the counter most days! With green beans and coke you have a choice. With ESPN you don't!

See ya
Tony

 

[jayn_j]

You can buy just greenbeens anywhere. You can buy 5 cans of coke anywhere. Heck I buy two 12 oz cans from a 50 cent machine and save 20 cents over the 20 oz bottle purchased over the counter most days! With green beans and coke you have a choice. With ESPN you don't!

Everybody here can come up with examples of things that are bundled and things that aren't, depending on their viewpoint.

I especially like the apples example everybody comes up with, mostly because we aren't comparing apples to Apples . In addition to the varieties, there is actually a difference between bagged apples (bundles) and bulk apples (ala-carte). You can only get the little apples that are just the right size for small children in bags. The bulk apples are always larger and suite the tastes and appetites of adults better.

Tony, is the core of your desire the need to kick ESPN? I can definitely get behind that. Build a package that excludes the sports stations for a significant savings and I am all over it. I detest the way pro-sports has us all bending over in all aspects of TV from cable rates to broadcast exclusivity. Create a sports bundle, a non sports bundle and a combined bundle and I am there.

 

[TNGTony]

My argument is AGAINST the DISTRIBUTOR forcing the retailer's hand at the expense of the customer. I don't know how many ways I have to say it. ESPN isn't the offender, it's ABC/Disney saying that not only does this channel have to be available on the lowest tier package, but so does Disney and ABC Family. It's Viacom with it's slew of channels including MTV, VH1, Nickelodeon and others. It's NBC/Universal with USA, SciFi, Bravo, CNBC, MSNBC. SHopNBC etc. It's Univision with Telefutura and Galavision!

My argument is that these are monopolistic practices and as such are one of the few times when it's the government's JOB to get involved and stop the practice!

And once again your apples example falls short! At my Kroger the other day I had a CHOICE. I could buy small apples individually or in a bag. I could pick the apples I liked and stuff them in a bag. I could also buy large apples individually or in a bag! I had choice everywhere I went. I ended up buying two large apples and selecting a dozen small apples to put in a bag for MY lunch!

I want you to come up with one example where the bundle of unrelated products is the ONLY way you can get any one popular product and you are limited to one or two outlets. Not even CDs have to be bought bundled any more! You can select any song you want from a CD and buy it individually now.

 

[Greg Bimson]

I knew the HBO example would come up eventually. HBO. Just HBO, not the other 8 channels is $14.99. The rest are free. You can choose to only watch HBO but the rest are free. HBO all by its lonesome was $10 a month two decades ago!

And here comes the return winner...

You pay for AT100, and the channels you watch are what you pay for, while the rest are free.

Now your "a la carte" has boundaries. The justification that HBO itself is $14.99 while the rest are free proves it.

All I am asking for is consistency in the arguments. And no one can give consistency.

 

[jayn_j]

I want you to come up with one example where the bundle of unrelated products is the ONLY way you can get any one popular product and you are limited to one or two outlets. Not even CDs have to be bought bundled any more! You can select any song you want from a CD and buy it individually now.

But Tony, even the content you are talking about cannot pass this test. Take USA network for example: I can purchase this channel from DISH, DirecTV. Comcast, Fios (in some places), C-Band, I-Tunes, and according to the Monk I watched tonight, I can download from the USA Network website as well.

Some of these choices are bundled, but you do have a choice of bundles. Some, such as C-band or I-tunes are not only ala-carte, but are even split as individual shows on the network.

Sorry to keep arguing, but I simply cannot make this all hang together using your model. I know you see it perfectly clearly and are frustrated. Kind of like the Kissinger quote: "If you knew exactly what I know, you would agree with me completely"

The key there is "exactly". No more, no less.

 

[stevenl]

I have no problem with cable companies or sat companies offering Ala Carte, as long as it does not affect the packages and as long as it was not due to government interference. If the Market demands Ala Carte then so be it, but right now the Free Market does not demand it, otherwise wed all have it by now.

The evidence of what the free market wants is there, take for example the HD war.. The market doesn't care which channels they are they only argue what number of them. 20 vs 50 vs 100 what they are is not important to the market. At least not "as" important as the number.

 

[TNGTony]

And here comes the return winner...

You pay for AT100, and the channels you watch are what you pay for, while the rest are free.

Now your "a la carte" has boundaries. The justification that HBO itself is $14.99 while the rest are free proves it.

All I am asking for is consistency in the arguments. And no one can give consistency.

The differecne is HBO owns HBO.

NBC does not own Turner channels but in NBC contracts for USA they tell the cable system that they must be on the same basic packages as the Turner channels.

jayn_j,

Really? You can get USA network ALL BY ITSELF with nothing else on cable? Where? On Fios all by istelf, Really? On the internet you have access to the exact same channel as on cable or satellite? I be the answer to all thise is NO!!!

I am having a really hard time understanding the resistance to ALLOWING choice to the customer. It is completely alien to me.

See ya
Tony

 

[stevenl]

I dont think anyone is against choice.. But the market has to guide it that way, Not government regulation.

 

[Greg Bimson]

The differecne is HBO owns HBO.

NBC does not own Turner channels but in NBC contracts for USA they tell the cable system that they must be on the same basic packages as the Turner channels.

And now we get to the crux of the argument.

The cable/satellite systems (MSO's) create a package of channels to market to their customers, and there is a negotiation between the programmers and the MSO's to determine the placement of each of their channels. MSO's can try to negotiate ESPN to its own tier. But ESPN has the ability to say they will not consider anything but the basic tier. And it still is a negotiation.

Once you get an MSO to state they will no longer sell their own tiers, will you get a cafeteria-style menu to pick your programming. Or, once you get an MSO and a programmer to agree to sell not only in tiers but in an a la carte or vertically-owned channel setting is a "choice" possible.

However, can you imaging what you are considering as packaging? All Turner channels, all NBC Universal channels, all FOX channels, all Viacom channels, all Scripps-Howard channels, all Discovery channels, all ESPN channels, etc.

Then the next complaint will be how someone only wants FX, but not Fox News, Fox Reality or FOX Business, but would like to replace them with CNN, MTV and CNBC.

That is why this is a very slippery slope.

And like I mentioned earlier, there is a class-action lawsuit against the top four MSO's and the top four programmers regarding this "packaging" and so-called "monopoly". The judge is about ready to dismiss it for lack of evidence. So unless someone wants the government to regulate the pay-TV business AGAIN , you better be sure that is exactly what you want.

 

[TNGTony]

No slippery slope. It's called an oligopoly. This is one of the few things our government is supposed to protect the consumer from. It restricts free trade.

The current political atmosphere in this country right now says that even if it's a monopoly, "so what". Microsoft was ajudicated a monopoly. The recourse? None! Do I expect something to happen? No. So a judge looking at an oligopoly and saying the same thing you guys are ("Eh... so what?") is not beyond the scope of reality right now.

Does this change the fact that these are monopolistic practices? Nope!

I will repeat my statement, I am aghast and amazed that people on this board are AGAINST ALLOWING choice!

See ya
Tony