Thursday, February 23, 2006

Cable ala Carte

I think cable is too expensive. I believe that they are really in the business of nickel and diming their customers out of more and more money. I also believe that their primary businesses are not providing cable TV but rather expanding their marketshare by signing up new people and also selling advertising. So in the end, once you are signed up, they really don't care much about you as a customer.

So you would think I would be happy that the government is trying to force the cable company to sell their selections one channel at a time - allowing people to only buy what they want. But I'm not.

Mostly, for whatever reasons I might detail below, the overall reason I am opposed to this is that it is providing an otherwise not available chance for the providers to make a gross adjustment to their pricing structure in a way that will undoubtedly get more expensive. I am 100% sure that whatever price reduction politicians are able to claim for an election cycle will be wiped out in less than a year. This entire initiative just has "backfire" written all over it.

How many channels do you think the average household would buy one by one? Everyone will buy their local channels, which even with ala carte pricing will likely remain a package. So we have basic, then how many? 6? 8? 10? If it were me I know I would want CNN, ESPN, Bravo, SciFi, Comedy Central, MTV, VH1, Discovery, & Cartoon Network - and that's not counting HBO type premium channels. So that's nine, although I am real fond of TNT, TBS, A&E, AMC, I like Spike for NewTrek, and also FX from time to time. So say 9 channels.

Don't you think that once they come up with the price for 9 channels it will be what I am paying for the whole thing now? They aren't stupid. In the end, we will just wind up paying more if we want to have a couple of channels we watch infrequently and the "average" buy will look like the "average" price right now.

Also, won't this mean that channels will have to carry their own freight? So lets say that I like SciFi, but nearly nobody else does. Won't that mean that the per channel price for that channel is going to be higher? Once you add in the domino that if less people are watching it then less people will advertise on it couldn't it mean that orphan stations, something that few people watch, will just get dropped from the package all together?

In Pittsburgh, would that mean we would be forced by the market to take Fox News over CNN?

In reality, this engine/freight relationship exists already. Cable providers have to deal with it from programming providers. The way they price now just spreads the cost of high priced stations over all the low priced stations. Plus, the program providers don't even give the cable providers a choice in some situations. As a cable company, if you want to offer one station a programmer has you often have to take the full package. Want Bravo? Then you also have to offer USA, Scifi, MSNBC, NBCShops...

Really it seems like the first step is not to free up the consumer to pick and choose, it is to let the cable operator pick and choose what they offer. At that point the second generation issue might become moot.

Although I doubt it, because they are all crap-weasels and they will not be happy until they have all of our video, audio, phone, internet and every discretionary dollar in our budgets plus a few.

1 comment:

Robert Toombs said...

Some good points--particularly regarding the way the media conglomerates are likely to force cable providers to take bundles of channels anyway. And since the big conglomerates own most everything, then you probably end up with just as many channels as when you started--undoubtedly at higher expense (particularly, as you pointed out, after a year or two has passed).