NIELSEN: 1.5 MILLION CUT THE CORD IN 2011

[ansky212]

File this under "Fat Chance." Despite the player bounty and concussion issues facing football right now, the NFL is still a license to print money and the networks want their piece of that very large pie. It's basic supply-and-demand. As long as the NFL supplies a good product, the viewers will demand it, the league will get those huge rights fees, and the networks will pay them.

Exactly - same deal with buying tickets to sporting events. No way I'm spending $200 for a nosebleed seat for a 3-hour football game. But as long as people are willing to pay these prices and the league is still selling out stadiums, prices will just keep going up and up.

 

[ansky212]

People complain about the cost of cable TV, but what I don't understand is how people are willing to spend $12 on a movie ticket. Talk about a ripoff. Bring your family of 4 and you're out almost 50 bucks - that's the cost of a month of cable TV in a single night. I haven't been to a movie theater in 5 years, but I'll gladly spend the same amount of money on a month's worth of cable TV.

 

[LKellerIII]

People complain about the cost of cable TV, but what I don't understand is how people are willing to spend $12 on a movie ticket. Talk about a ripoff. Bring your family of 4 and you're out almost 50 bucks - that's the cost of a month of cable TV in a single night. I haven't been to a movie theater in 5 years, but I'll gladly spend the same amount of money on a month's worth of cable TV.

That's if you don't buy popcorn, a soda, and candy - then you're out $75. I go to the movie theatre just a few times a year, and it's only to see films that benefit by the huge screen and surround sound. And I do that less now that I own a large HD TV.

 

[Markxxx]

People complain about the cost of cable TV, but what I don't understand is how people are willing to spend $12 on a movie ticket. Talk about a ripoff. Bring your family of 4 and you're out almost 50 bucks - that's the cost of a month of cable TV in a single night. I haven't been to a movie theater in 5 years, but I'll gladly spend the same amount of money on a month's worth of cable TV.

It's the "theater experience," they want. I am not a movie person, so I don't care about waiting, but some people do love watching movies with a group and the whole "experience."

That's what you get when you sporting events live as well

 

[Darth_vader]

"What I don't understand is how people are willing to spend $12 on a movie ticket. Talk about a ripoff."

Yeah it is. Thankfully there's a $3 second-run theatre not too unreasonably far from me (ironically, it's operated by the same company that operates the $12-a-pop theatres.) I rarely spend more than $4 for candy; of course, I've also been a big fan of cargo pants for many years. ;o)

 

[TexasTom]

The leagues/conferences dictate the rights fees, not the networks. The networks pass those fees along to us, which is why their subscriber fees are so high. As long as the leagues/conferences demand $MultiBillion, they will get it from somebody. If ESPN et al were to go a la carte, their revenue would decline 50-90% unless they charged that $25-50 per month I mentioned earlier.

Not necessarily. Even for sporting rights, the fees are set by a combination of a willing buyer (the networks) and seller (the leagues). The buyers are willing to pay those fees because they know that they can pass it on to the end customer and the end customer has no choice other than to drop cable/satellite service completely if they object to the price increases.

With a la carte, an actual market place feedback loop would exist for the first time. ESPN could still choose to pay $1.8 billion/year for Monday Night Football, but the resultant $1.50/month fee increase at the wholesale level would be directly seen by the end customer, who would be asked to pony up an extra $3/month on top of whatever the current price was for ESPN. That would be something new to the cable/satellite network world, so no one knows for sure what the outcome might be. Perhaps 90 million homes would continue to fork out the increased charges and the sports rights escalation would go on unabated. But, somehow, I doubt it -- and I suspect that the breaks would finally be put on for the crazy increases.

Remember...the NFL did just fine when MNF ran on ABC and the rights were about 1/4 what ESPN is now paying.

 

[arnoldevns]

I'd like to go to the low number of channels, but there are about 9 or so that I would miss, so I don't. If they do ever go A-LA-CARTE I believe my bill would be lower because I would take off some the ones I rarely watch.

This subject has been debated to death, but to sum it up: If cable/satellite TV went a la carte and the only people who paid were the viewers of a given channel, all would be out of business in a year unless the fees per channel went up 5-10 times what everyone's paying now. That means $25-50 a month for ESPN, assuming that 10-20% of all cable viewers watch the channel enough to want to pay for it individually. Game rights fees are expensive, and that's why ESPN charges so much. HBO and Showtime may charge less, but they don't pay $Billions in rights fees per year to the NFL, MLB, NBA, and the big college conferences. If ESPN were able to charge what HBO charges ($15 a month now?), they might get away with it.

Essentially what would happen is the exact opposite of what the proponents of a la carte say would happen. The price of cable would skyrocket. In order to get what you get now, you would be double or triple what you do.

IF the industry had started out with a la carte, I suspect we would not have nearly the choices that we do now, but the cost might be lower.

 

[PTBoardOp94]

Essentially what would happen is the exact opposite of what the proponents of a la carte say would happen. The price of cable would skyrocket. In order to get what you get now, you would be double or triple what you do.

I don't think anyone argues that point: on a per-channel basis, ala carte would be more expensive. The idea is that most households would cut the number of channels they receive by 75% or more and save money on their total bill; simultaneously putting dozens of low-rated channels out of business.

 

[nomadcowatbk]

I'd like to go to the low number of channels, but there are about 9 or so that I would miss, so I don't. If they do ever go A-LA-CARTE I believe my bill would be lower because I would take off some the ones I rarely watch.

This subject has been debated to death, but to sum it up: If cable/satellite TV went a la carte and the only people who paid were the viewers of a given channel, all would be out of business in a year unless the fees per channel went up 5-10 times what everyone's paying now. That means $25-50 a month for ESPN, assuming that 10-20% of all cable viewers watch the channel enough to want to pay for it individually. Game rights fees are expensive, and that's why ESPN charges so much. HBO and Showtime may charge less, but they don't pay $Billions in rights fees per year to the NFL, MLB, NBA, and the big college conferences. If ESPN were able to charge what HBO charges ($15 a month now?), they might get away with it.

Essentially what would happen is the exact opposite of what the proponents of a la carte say would happen. The price of cable would skyrocket. In order to get what you get now, you would be double or triple what you do.

IF the industry had started out with a la carte, I suspect we would not have nearly the choices that we do now, but the cost might be lower.

some channels could go away and no one would notice

 

[The Voice of Reason]

It's no wonder people are canceling cable.

Cable subscribers are sick and tired of shelling out good money every month only to see repeats of movies plus being inundated with these useless reality series like the Kardasians.

I use to have cable just to watch the news. Unfortunately today news consists of liberals (MSNBC) conservatives (FOX) and boring (CNN) talking heads. Headline news has gone from news to Nancy Grace. Need I say more?

 

[ansky212]

I don't think anyone argues that point: on a per-channel basis, ala carte would be more expensive. The idea is that most households would cut the number of channels they receive by 75% or more and save money on their total bill; simultaneously putting dozens of low-rated channels out of business.

The other thing nobody has mentioned yet is the actual cost of delivering service. I would think there would have to be some base charge for "delivery" of service, similar to what the utility companies charge. So if a person chooses to only subscribe to Discovery Channel at say, $3/month, there is no way their bill is only going to be $3 (plus taxes). The whole cable infrastructure would collapse. Plus you would likely still need to rent a receiver at about $5/month or more, so now you're already paying over $10/month (including tax) for the 1 single channel you are subscribing too. It just doesn't work.

 

[PTBoardOp94]

In your example, the subscriber would save at least $30 per month compared to their previous package with 64 channels he/she didn't watch. How is that not workable?

 

[ansky212]

In your example, the subscriber would save at least $30 per month compared to their previous package with 64 channels he/she didn't watch. How is that not workable?

Of course it's workable for the subscriber. My point is that it is not workable for the cable company. What I was trying to illustrate is that the cable company would have to raise the fee of the channel and charge delivery fees in such a manner that it is still a good value to the subscriber (paying for the 1 channel vs. dropping cable completely). But what is a good value to the subscriber is not enough to be economically sustainable for the cable company. Do you really think a company that currently rakes in $50+ per month from every sub is now going to accept just $10/month? Not gonna happen. The cable companies would be out of business.

 

[mnradiofan]

In your example, the subscriber would save at least $30 per month compared to their previous package with 64 channels he/she didn't watch. How is that not workable?

I'm certainly not paying $10 per month for one channel. I can't think of a single channel that is worth $10 to me. But I'll certainly pay $70 for 100 channels. Sure, most of the time nothing is on them that I'd like to watch. But, chances are I'll find enough programming in 30 days over those channels to justify the amount spent.

 

[LKellerIII]

Everytime cable/satellite comes up, this debate about "a-la-carte" comes up again...so I guess I'll contribute what I've said about 50 times before.

If you watch just a few channels, "a la carte" would have to be cheaper. But I estimate that I watch about 30 channels regularly, and about 50 within any month. At just $3.00 per channel, I'd be paying $150 per month, and that's WAY more than I pay now for 200+ channels.

And a la carte would be more complicated for the cable companies to adminster, so it would be more EXPENSIVE to administer, which means $3 per channel is probably a pipe-dream, and they would find a way to pass the extra costs on to the customer by either charging MORE than $3 per channel, or by adding "service fees" or some other kind of fee.

So I have to say to those that watch just a few channels - put a big-ass antenna on your roof, or watch shows on the internet, and stop bitching.

In my opinion, Cable/Satellite is fine the way it is. Yes - I'd like it to be cheaper, but I'd also like to pay $2.00 per gallon for gasoline, and $1.50 for a loaf of bread. Ain't gonna happen!

 

[carolinaradio]

Everytime cable/satellite comes up, this debate about "a-la-carte" comes up again...so I guess I'll contribute what I've said about 50 times before.

If you watch just a few channels, "a la carte" would have to be cheaper. But I estimate that I watch about 30 channels regularly, and about 50 within any month. At just $3.00 per channel, I'd be paying $150 per month, and that's WAY more than I pay now for 200+ channels.

And a la carte would be more complicated for the cable companies to adminster, so it would be more EXPENSIVE to administer, which means $3 per channel is probably a pipe-dream, and they would find a way to pass the extra costs on to the customer by either charging MORE than $3 per channel, or by adding "service fees" or some other kind of fee.

So I have to say to those that watch just a few channels - put a big-ass antenna on your roof, or watch shows on the internet, and stop bitching.

In my opinion, Cable/Satellite is fine the way it is. Yes - I'd like it to be cheaper, but I'd also like to pay $2.00 per gallon for gasoline, and $1.50 for a loaf of bread. Ain't gonna happen!

+1
Agree with everything you say. I have a cheaper package and watch about 25 channels out of like ~130 (that includes XM, shopping channels, etc, so I technically don't get that many "real" channels). I come out better also. My household's not couch potatoes, but I feel we definitely get our money's worth, especially since that's about all we really spend on "entertainment." Everything increases in cost. I have no complaints.

 

[landtuna]

If you watch just a few channels, "a la carte" would have to be cheaper. But I estimate that I watch about 30 channels regularly, and about 50 within any month. At just $3.00 per channel, I'd be paying $150 per month, and that's WAY more than I pay now for 200+ channels.

In the C-band days a programmer offered virtually every channel ala carte but also offered tiers just like today - at a discount. You could buy one or more tiers or one or more individual channels. The subscriptions were all handled by computer so the only "complication" was for the programmer to set up the subscription list on the web site.

And a la carte would be more complicated for the cable companies to adminster, so it would be more EXPENSIVE to administer,

See above. As everything is automated and all cable boxes are now addressable there is no added complication. Each channel still has to be accounted for by subscription and also needs to be included or excluded in each of the tiers. Virtually no change from today except for individual channel pricing - but they already know what the channel is costing them and all they need to calculate is the kicker.

So I have to say to those that watch just a few channels - put a big-ass antenna on your roof, or watch shows on the internet, and stop bitching.

The problem is, of course, that most cable channels are not available OTA. I would gladly pay a monthly charge for Turner Classic Movies but that's about the only one. It would also be nice if OTA customers could somehow subscribe to some of the specialty sports channels. There is money to be made there and it will be filled eventually.