Cable TV Ala Carte in the news again

[landtuna]

TheStreet.com has an article currently online basically saying we can expect ala carte cable subscriptions soon after the approval of Comcast and Time Warner.

We've argued this issue time and again and frankly I am a bit surprised to see someone in the trades speculating that it is a distinct possibility. Further, I don't understand exactly why.

Anyone see what I may be missing?

(In the interest of full disclosure - I am not now, nor have I been in the past five years, a subscriber to cable or sat TV.)

 

[TheBigA]

Keep in mind that TheStreet is not really a trade. It's basically a blog run by TV host Jim Cramer of CNBC. If you read the article carefully, he has no actual quotes or real facts to back up his prediction that ala carte will happen. It's more like wishful thinking.

The cable industry is against it. If the feds approve the Comcast TWC merger, the cable industry will become even more powerful. My view is that unless the feds REQUIRE ala carte as a condition of approving the merger, the industry has no reason to do it voluntarily. Regardless of what Rocco says, use of streaming boxes like Roku and Apple TV are really a blip on the radar. And even then, it all comes back to the same mega-corporations that control the cable industry. If they don't get the money from you in forced packages, they'll structure things in such a way that you'll still get channels you don't want, and your cable bill (or someone else's cable bill) will be even higher than it is now. I understand none of this affects you, but since Comcast owns NBC, at some point they'll come up with something that will lure you into their trap.

 

[gregg75]

Yes I saw the article......I think the author is having some wishful thinking. May have even been written by a twenty-something.

 

[landtuna]

I understand none of this affects you, but since Comcast owns NBC, at some point they'll come up with something that will lure you into their trap.

Thanks for the explanation. The piece did run counter to everything else I've read and it made me wonder what I had missed. Apparently nothing.

Right now I roll with a big outside antenna and either Internet streams or downloads. My current cost is virtually zero. If I were to pay somewhere around the average of $75/month for expanded cable I would get only about half a dozen services that I would watch on a regular basis. With that $75 I can buy either subscriptions or hard copy programs for the ones I really want to watch and still save some money. Unless the mean old corporations manage to shut down the Internet content completely there is nothing they could tempt me with. Going forward I think the only thing the cable companies have to offer is live sports and I can get all I want without paying them a dime.

 

[TheBigA]

Unless the mean old corporations manage to shut down the Internet content completely there is nothing they could tempt me with.

Do you still have a wired phone at your house? Suppose your phone company got out of the home phone business. They've been discussing that. So your only way to get POTS (plain old telephone service) is from a cable company. And they require you to bundle it with TV.

 

[landtuna]

Do you still have a wired phone at your house? Suppose your phone company got out of the home phone business. They've been discussing that. So your only way to get POTS (plain old telephone service) is from a cable company. And they require you to bundle it with TV.

Yes, I still have a landline phone and also DSL service from CenturyLink. Wifey and I also have our own cell phones so if landline went away (unlikely) we probably wouldn't notice except for a drop in robo calls. Wifey wants to retain the landline but I have no idea why. We use it so little each phone call probably costs us $3 pro-rated. The only cable company option I have is Cox and I will not do business with them in any way, shape or form. Their service is immediately next to having no service.

 

[tested]

In theory....if a cable operator got big enough the cable networks would have to do what they say or run the risk of losing tens of millions of households. So in theory....if Comcast/TWC required a la cart they could force the networks to accept it.

In reality it is not in Comcast's interest to do that and it will not happen.

 

[Gregg.]

Two thoughts... 1. You can transfer your old landline phone number to a cell phone. I did that when I got my cell phone since I wanted to ditch the landline. You may have to wait a couple of days for the transfer but when it comes through there's no need to keep the landline. Even if you have a second cell phone which you hardly use, if you've got a family plan, that second cell phone may cost as little as $10 per month and it still has your old number.

2. I don't think a la carte will mean much, whether Comcast & Time Warner merge or not. It's the cable provider's goal to get you to pay as much as possible, no matter how you bundle the services. I have the feeling if you only subscribe to ten channels, plus basic broadcast, in a year or two you won't be saving that much. And what happens if a network like TNT or USA suddenly comes up with a show you want to watch? On the USA Network, I only watch "Suits," which only runs for about 3 months a year. Would I not subscribe to USA? Would I subscribe and they eventually cancel the show? I'm not much into baseball. But what if friends come over and want to see the Yankee game?

I see how this current cable marketplace is a bad deal for consumers. If the Yankees insist they want $200 million a year from their cable network, the cable providers are going to pay and pass that onto us, even if we hardly watch. The cable providers have a hard time saying no. And when they do, it becomes a big battle played out in the media, such as when Time Warner last year took WCBS-TV off its system because CBS wanted a lot of money for retransmission.

I've got to have one of the best deals around. My apartment building made a deal with Time Warner where we all get the numerous HBO and Showtime channels, plus a package of non-premium channels that must number 300+, for one low price. I wonder how I'll feel if I ever move and have to start paying normal rates for cable.

 

[landtuna]

Two thoughts... 1. You can transfer your old landline phone number to a cell phone.

The LAST thing I would want is to have my home phone number, the one that gets all the junk calls, transferred to my cell. Wifey and I never give out our cell numbers except to friends and very good providers (the ones that won't bug you).

I've posted this before but here once again for those who weren't around in the "old days" is how it should work (greedy cable companies aside).

In the days of C and Ku-band big dishes we had a subscription service computer that lived near San Diego. No matter who you used for programming you could sign on to their web site, provide your descrambler box ID and modify your subscription. It took all of about 5 minutes or less. Most programmers offered both packages and ala carte subscriptions and most also allowed you to mix or match as you saw fit. That was, far and away, the most efficient and cost effective way of choosing programming I've ever seen. If the programming community ever gets their act together with a setup like that again I might once again take advantage of it. Until then I will get my programming "off the grid" and their subscriptions be damned.

 

[newsmark]

I don't think a la carte will mean much, whether Comcast & Time Warner merge or not. It's the cable provider's goal to get you to pay as much as possible, no matter how you bundle the services. I have the feeling if you only subscribe to ten channels, plus basic broadcast, in a year or two you won't be saving that much.

I think you hit the nail on the head here. Even if the cable companies wanted a la carte, the individual channels don't. If a company owns 6 channels, they want you to be forced to pay subscriber fees for all six. They tie all 6 channels together in their contract. You want ESPN? Sure, if you carry--and pay for-- ESPN2, ESPNews, Disney Channel, ABC Family, etc. (Not picking on ABCDisney. Every company does it. It's good business from their end, since these channels make money even when no one's watching.)

If the feds were to mandate a la carte, I think the cable companies would indeed offer individual channels. But the cost to get the 10 channels you want, a la carte, would probably be more expensive than the package that gives you dozens of channels.

(Before RadioDiscussions' break, I posted some links about how much cable channels make from subscriber fees. It's often more than they make from advertising, so you can bet they'll put up a lot of money to protect the current system.)

 

[LKellerIII]

I think you hit the nail on the head here. Even if the cable companies wanted a la carte, the individual channels don't. If a company owns 6 channels, they want you to be forced to pay subscriber fees for all six. They tie all 6 channels together in their contract. You want ESPN? Sure, if you carry--and pay for-- ESPN2, ESPNews, Disney Channel, ABC Family, etc. (Not picking on ABCDisney. Every company does it. It's good business from their end, since these channels make money even when no one's watching.)

If the feds were to mandate a la carte, I think the cable companies would indeed offer individual channels. But the cost to get the 10 channels you want, a la carte, would probably be more expensive than the package that gives you dozens of channels.

(Before RadioDiscussions' break, I posted some links about how much cable channels make from subscriber fees. It's often more than they make from advertising, so you can bet they'll put up a lot of money to protect the current system.)

True. Anybody who thinka they are going to save money with "a la carte" is dreaming. If hell should freeze over, and the government really mandates this, what do you think you would be charged for each channel? Let's say it's just $3 each per month, and you only want 15 channels. That's $45 per month. There are current basic cable and satellite plans that come in at about that amount per month, and you'd get more than 15 channels.

And people seem to forget that cable companies raise their prices constantly. So in the above scenario, what's to stop them from raising it to $4 next year, $5 the year after that, etc. ?

 

[Avid Listener]

True. Anybody who thinka they are going to save money with "a la carte" is dreaming. If hell should freeze over, and the government really mandates this, what do you think you would be charged for each channel? Let's say it's just $3 each per month, and you only want 15 channels. That's $45 per month. There are current basic cable and satellite plans that come in at about that amount per month, and you'd get more than 15 channels.

And people seem to forget that cable companies raise their prices constantly. So in the above scenario, what's to stop them from raising it to $4 next year, $5 the year after that, etc. ?

I have such a deal from my cable company. The problem is that I don't just want any old 15 channels picked at random, I want the 15 channels I want to watch. To get the ones I want, I need a much, much more expensive tier, and then I'll have the 15 channels I want, and another 100 channels I have to program off of my remote because they just get in the way.

 

[TVCOOL]

I think its the start of the end for Cable TV as we know, when the WWE forgoes making the WWE Network a channel and went web /smart tv only it's the spark that companies such as HBO, ESPN ,etc will follow as cable subscribers drop. All the ESPN we need is ESPN, ESPN2 and ESPN Classics no need for 10+ ESPN channels (likewise for Disney, MTV, CNN, VH1 ,etc)

 

[LKellerIII]

The "end of cable as we know it" may have started, but there's about a decade of life left in it. I'm not a techie, but I don't think the internet has the bandwidth for tens of millions of people streaming at the same time each night. And keep in mind that Comcast provides internet service, as well. If you think they're going to watch their cable business die, and not find a way to make subscribers and content providers pay more...much more...for internet access, you are naive.

So yes - maybe cable will be dead, but we'll be paying much more to stream content...probably as much on a monthly basis as cable costs now.

 

[TheBigA]

So yes - maybe cable will be dead, but we'll be paying much more to stream content...probably as much on a monthly basis as cable costs now.

Exactly. Sooner or later, programming costs catch up with the consumer.

 

[umfan]

Cable isn't dead, it's just that the current infrastucture will be more oriented to providing broadband as opposed to television content. The cable companies will still be able to offer TV programming for not much additional incremental cost over the same infrasturcture that they are providing internet from, so it's going to remain available. Likely, people will have to pay extra to view over a computer or wireless device.

I don't see wireless broadband internet becoming a primary source anytime soon, so a pipe into the home will still be needed keeping cable and phone companies relevant.

But one way or the other, the consumer will pay the piper for the programming as other posters have aptly noted.