How to keep channels from charging as much as they want ??

[kstuart]

Everyone has some channel or channels that they require a cable or satellite system to provide.

" I must have the ___ channel or I will go somewhere else. "

Given that, what can possibly keep the channels from charging as much as they like ?

Every time that a very very popular channels comes up from renewal, they can charge more.

So what can possibly be done to keep the price from going up and up and up ?

No cable or satellite provider can charge less, because their main per-customer cost is the amount charged by the channels for the programming.

 

[jerryez]

Aren't you going to offer a solution? Its' your thread.

 

[jbrooks987]

Let the "gument" (as the soon to be former senator, running for governor in my state pronounces it) legislate the prices???

 

[TheKrell]

I have a partial answer: a la carte forced on providers. Then they will only be able to charge what the market will bear per channel, and not per bundle. This will also get the distributors out of the loop and avoid carriage disputes that drop channels off satellite or cable altogether.

Providers absolutely loath this idea because they know darn well their profits will drop dramatically. So will our bills.

 

[kstuart]

I have a partial answer: a la carte forced on providers. Then they will only be able to charge what the market will bear per channel, and not per bundle. This will also get the distributors out of the loop and avoid carriage disputes that drop channels off satellite or cable altogether.

Providers absolutely loath this idea because they know darn well their profits will drop dramatically. So will our bills.

I think your terminology is ambiguous.

The (entirely arbitrary) usual practice is "cable and satellite providers" and "channel distributors".

However your post reverses that convention.

Bundling is forced on cable and satellite providers by channel distributors, the same way they force priciing. Providers like Dish Network want a la carte (Charlie has said this over and over).

It is distributors that loath the idea.

Ultimately, a la carte would cause dozens of unpopular channels - and the low viewership programs on them - to die off - because no one would pay extra for them.

 

[JohnL]

I have a partial answer: a la carte forced on providers. Then they will only be able to charge what the market will bear per channel, and not per bundle. This will also get the distributors out of the loop and avoid carriage disputes that drop channels off satellite or cable altogether.

Providers absolutely loath this idea because they know darn well their profits will drop dramatically. So will our bills.

Krell,

You have to be kidding right?

Currently, huge corporations own whole suites of channels. This allows most of the individual channels to survive on 10-25 cents per subscriber. With bundled packages most channels are subscribed too by 90-95 percent of multichannel subscribers. This allows niche channels to survive with small royalties per subscriber.

In an Ala Carte system fewer subscribers will have to generate a stations revenue stream in terms of "EyeBalls (Advertising revenue)" and direct subscriber fees. These channels will need to maintain 95 percent of their current revenue stream to be able to survive in an ala carte distribution system.

Remember as well that your service provider (Cable or Satellite) has huge fixed capitalization costs, as well as fixed operating costs, and non fixed operating costs that need to paid for to provide that service. Generally, we are looking at about a break even point of 15-20 bucks per month per subscriber on top of the programing fees.

This means in a true ala carte world you would be looking at about 15 - 20 bucks per month plus the channel fees of about 1-5 bucks per channel per month, this would mean an ala carte subscriber would be paying about 35- 60 bucks per month for an ala carte service of 15 channels. Not to mention that many many niche channels would simply disappear completely.

My best guess would be that the most popular channels would survive (USA ESPN, HBO etc), but many of the most popular channels are the very channels and many a subscriber complains about jacking up subscriber rates.

We are talking about MEGA Corporations that will almost never lose, the individual customers are the ones that almost always lose and I'd almost guarantee that the panacea that many talk about with regard to ala carte will never come to pass with Ala Carte.

John

 

[Greg Bimson]

Bundling is forced on cable and satellite providers by channel distributors, the same way they force priciing. Providers like Dish Network want a la carte (Charlie has said this over and over).

Okay, but then why doesn't Dish Network take a stand and state they will no longer package channels to subscribers?

Conversely, the only way to get that type of carriage is if there is a law passed that removes the ability for anyone to package. The programmer would have to negotiate carriage for each channel individually, and then the cable or satellite distributor could no longer sell any packages, only single channels. And paraphrasing John Entwistle, I'm sure that would fly like a lead zeppelin.

 

[TheKrell]

The (entirely arbitrary) usual practice is "cable and satellite providers" and "channel distributors".

However your post reverses that convention.

Sorry about that; I'm guilty as charged. The "convention" seems backwards to me.

You have to be kidding right?

No, I was completely serious. I happen to agree with most of your post, except that nobody knows how the costs will shake out in the end. I seriously doubt that my favorites will cost $5/channel/mo. Whatever it turns out to be, the channel distributors seem to think that they make more money the way things are now. So really they agree with me that the costs would likely go down in an a la cart world.

 

[zim2dive]

Sorry about that; I'm guilty as charged. The "convention" seems backwards to me.

No, I was completely serious. I happen to agree with most of your post, except that nobody knows how the costs will shake out in the end. I seriously doubt that my favorites will cost $5/channel/mo. Whatever it turns out to be, the channel distributors seem to think that they make more money the way things are now. So really they agree with me that the costs would likely go down in an a la cart world.

A la carte.. all the way baby... as the phrase goes "500 channels and nothing on".

You only pay for the channels you want to see... new channels will be just like any other real startup.. they will need funding and either live or die based on their merits.

I would like nothing more than to see rampant capitalism here... this bundling is crap. I watch ch XYZ, but there's no reason some company should force Dish to carry it in their lowest tier.. at $x per subscriber, along with 4 other channels I don't want to watch, nor to pay for.

If the online folks weren't so greedy ($2.99 *per* HD episode ?!?!), a la carte would skip a full magnitude and go from per-channel a-la-carte to per-show-a-la-carte and "channels" would be history.

The record industry never "got it" when mp3's came out.. you could immediately shut down record stores, and replace them at most with a fancy CD-burning kiosk.. save all the $$ from the no-longer needed duplication and distribution network and pass at least 50% of that savings on to the customer... but instead they wanted to charge the same silly price... and we all know how well that didn't work out for them.

Content providers are drinking from the same kool-aid.

 

[navychop]

I doubt we'll ever see a la carte. But if it came into being, it would have to charge based not only on a per channel basis, but also on a per subscriber basis, which I think most of us take for granted.

And we'll never come out ahead. Administrative costs, and pressure to recoup the same or larger costs over fewer heads, will ensure we'll pay more and get less.

 

[Scott Greczkowski]

I have been doing this for over 10 years now, and what I find funny is that the people who get REALLY upset when channels are removed because of a pricing dispute are also the same people who get REALLY upset when their bill goes up.

For a company like DISH or DIRECTV, its a damned if you do and damned if you don't type of thing.

 

[multnomah]

I think your terminology is ambiguous.

The (entirely arbitrary) usual practice is "cable and satellite providers" and "channel distributors".

However your post reverses that convention.

Bundling is forced on cable and satellite providers by channel distributors, the same way they force priciing. Providers like Dish Network want a la carte (Charlie has said this over and over).

It is distributors that loath the idea.

Ultimately, a la carte would cause dozens of unpopular channels - and the low viewership programs on them - to die off - because no one would pay extra for them.

`

What about all the foreign language channels? I can't believe there is a huge Neilsen rating for the Portuguese, French, and Punjabi channels, and yet they are thriving. The reason is that the people who watch them are willing to pay $10 or $15 per channel, so the revenue per viewer is higher than for other channels. I think the same thing would happen in an a la carte system: channels like TCM and National Geographic would charge $5 or $6 instead of 50 cents or whatever, to a smaller audience, and would remain solvent.

In an a la carte system every channel would be free to follow the same behavior as the foreign language channels, i.e. to charge as much as viewers were able to pay. What would the most popular channels charge then? $25 each? $50 each? They would try it on and see what happens. Ultimately most of us would wind up subscribing to only 5 or 10 channels.

 

[JohnL]

I have a partial answer: a la carte forced on providers. Then they will only be able to charge what the market will bear per channel, and not per bundle. This will also get the distributors out of the loop and avoid carriage disputes that drop channels off satellite or cable altogether.

Providers absolutely loath this idea because they know darn well their profits will drop dramatically. So will our bills.

Krell,

You have to be kidding right?

Currently, huge corporations own whole suites of channels. This allows most of the individual channels to survive on 10-25 cents per subscriber. With bundled packages most channels are subscribed too by 90-95 percent of multichannel subscribers. This allows niche channels to survive with small royalties per subscriber.

In an Ala Carte system fewer subscribers will have to generate a stations revenue stream in terms of "EyeBalls (Advertising revenue)" and direct subscriber fees. These channels will need to maintain 95 percent of their current revenue stream to be able to survive in an ala carte distribution system.

Remember as well that your service provider (Cable or Satellite) has huge fixed capitalization costs, as well as fixed operating costs, and non fixed operating costs that need to paid for to provide that service. Generally, we are looking at about a break even point of 15-20 bucks per month per subscriber on top of the programing fees.

This means in a true ala carte world you would be looking at about 15 - 20 bucks per month plus the channel fees of about 1-5 bucks per channel per month, this would mean an ala carte subscriber would be paying about 35- 60 bucks per month for an ala carte service of 15 channels. Not to mention that many many niche channels would simply disappear completely.

My best guess would be that the most popular channels would survive (USA ESPN, HBO etc), but many of the most popular channels are the very channels and many a subscriber complains about jacking up subscriber rates.

We are talking about MEGA Corporations that will almost never lose, the individual customers are the ones that almost always lose and I'd almost guarantee that the panacea that many talk about with regard to ala carte will never come to pass with Ala Carte.

John

 

[TheKrell]

In an a la carte system every channel would be free to follow the same behavior as the foreign language channels, i.e. to charge as much as viewers were able to pay.

Ouch! Just send in your paycheck!

You may be right that foreign language channel distributors are doing this. But that does not maximize their profits because many people will drop them when the price gets too high. What channel distributors should be doing is maximizing their profit. This involves a balancing act between cost/channel and # of subscribers.

 

[Ghpr13]

`

What about all the foreign language channels? I can't believe there is a huge Neilsen rating for the Portuguese, French, and Punjabi channels, and yet they are thriving. The reason is that the people who watch them are willing to pay $10 or $15 per channel, so the revenue per viewer is higher than for other channels. I think the same thing would happen in an a la carte system: channels like TCM and National Geographic would charge $5 or $6 instead of 50 cents or whatever, to a smaller audience, and would remain solvent.

In an a la carte system every channel would be free to follow the same behavior as the foreign language channels, i.e. to charge as much as viewers were able to pay. What would the most popular channels charge then? $25 each? $50 each? They would try it on and see what happens. Ultimately most of us would wind up subscribing to only 5 or 10 channels.

I understand what you're saying here, but I don't see how cable/satellite companies would survive then. If I'm going to have to choose between having 5 to 10 stations for, let's just say, $100.00, why wouldn't I just go OTA? Right now in Louisville, KY, I can get about 15 or so channels OTA and not pay a dime.

Sometimes I really wonder what the long term outlook will be for satellite TV if they can't get a handle on the subscribers' cost. This goes for both D* & E*.

Right now with this economy as it is, OTA keeps looking better & better, specially when teamed up with NetFlix or Amazon on Demand. Also, in areas like Louisville, KY, where income is low, cable is a cheaper and easier way to go for a lot of people down here. Heck, when I first moved here from Chicago, I couldn't believe the number of people I met who had cable but no phone! Why? Because cable will sign up anyone. No credit checks, no contracts, nothing. Phone companies want a large deposit upfront if you never had service or lost service...no upfront cost with cable.

The sad part is that I love Dish and think that satellite TV (both D* & E*) is really the best technology out there for the best PQ. Unfortunately, there a long history of the best technology not always surviving. (With all due respect to C-Band and KU subs)

Ghpr13

 

[grb]

Krell,

You have to be kidding right?

Currently, huge corporations own whole suites of channels. This allows most of the individual channels to survive on 10-25 cents per subscriber. With bundled packages most channels are subscribed too by 90-95 percent of multichannel subscribers. This allows niche channels to survive with small royalties per subscriber.

In an Ala Carte system fewer subscribers will have to generate a stations revenue stream in terms of "EyeBalls (Advertising revenue)" and direct subscriber fees. These channels will need to maintain 95 percent of their current revenue stream to be able to survive in an ala carte distribution system.

Remember as well that your service provider (Cable or Satellite) has huge fixed capitalization costs, as well as fixed operating costs, and non fixed operating costs that need to paid for to provide that service. Generally, we are looking at about a break even point of 15-20 bucks per month per subscriber on top of the programing fees.

This means in a true ala carte world you would be looking at about 15 - 20 bucks per month plus the channel fees of about 1-5 bucks per channel per month, this would mean an ala carte subscriber would be paying about 35- 60 bucks per month for an ala carte service of 15 channels. Not to mention that many many niche channels would simply disappear completely.

My best guess would be that the most popular channels would survive (USA ESPN, HBO etc), but many of the most popular channels are the very channels and many a subscriber complains about jacking up subscriber rates.

We are talking about MEGA Corporations that will almost never lose, the individual customers are the ones that almost always lose and I'd almost guarantee that the panacea that many talk about with regard to ala carte will never come to pass with Ala Carte.

John

I agree.

So we all end up with a forced socialism in the form of channel bundling. This is how channels like LOGO (gay programming) exist -- by making us all pay for them in order to get the handful of channels we really want.

 

[CubsWin]

This means in a true ala carte world you would be looking at about 15 - 20 bucks per month plus the channel fees of about 1-5 bucks per channel per month, this would mean an ala carte subscriber would be paying about 35- 60 bucks per month for an ala carte service of 15 channels. Not to mention that many many niche channels would simply disappear completely.

Maybe a lot of the niche channels should disappear.

 

[lobosrul]

Maybe a lot of the niche channels should disappear.

... what niche channels? All I see are channels that started off with unique programming but have switched to mainly reality TV shows. IE what the hell do Ice Road Truckers or Swamp People have to do with history? Or Bravo which started off covering performing arts etc, now shows reality TV about makeovers and crap. And the Country Music Television stations lineup tonight is a rerun of Are You Smarter than a Fifth Grader, a Dukes of a Hazard episode, and Police Academy. I guess the theme song for Dukes of a Hazard is a country song so its relevant to country music

 

[TheKrell]

You missed the most outrageous: wrestling on the SyFy channel.

 

[Ghpr13]

... what niche channels? All I see are channels that started off with unique programming but have switched to mainly reality TV shows. IE what the hell do Ice Road Truckers or Swamp People have to do with history? Or Bravo which started off covering performing arts etc, now shows reality TV about makeovers and crap. And the Country Music Television stations lineup tonight is a rerun of Are You Smarter than a Fifth Grader, a Dukes of a Hazard episode, and Police Academy. I guess the theme song for Dukes of a Hazard is a country song so its relevant to country music

You missed the most outrageous: wrestling on the SyFy channel.

It sad how some channels that had such great programming at one time have turned into crap channels. In the channels mentioned above, I think Bravo is the saddest of them all. It was such a great channel just a few years ago.

Ghpr13