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What we pay for cable channels

Lkeller said:
KeithE4 said:
Programmers have said their prices for individual channels would increase if sold ala carte. Maybe so, but would they increase to the point where you are paying for 200+ channels to get the 7-8 you actually watch?

I think not.

Is the average viewer only watching 7-8 channels? I think not. This isn't 1975.
You got that right. In fact, here's a breakdown (In no particular order) of the channels I watch.....

In addition to the local OTA channels (With the exception of the religious channels, ION & our America One affiliate which Comcast doesn't even carry anyway) as well the news & sports channels INCLUDING & ESPECIALLY THE LEAGUE-OWNED NETWORKS (Except Versus & NHL Network, both of which are WORSE than watching C-SPAN 24/7 & NBA-TV, which just doesn't really turn me on to begin with) that I watch & why I watch them.....

All channels listed are DENVER METRO channels. If someone else in the Denver area is reading this, the list may vary from their own guide.

A&E (Comcast Channel 41) - It's Reality programming is FAR superior than that of the OTA networks & some cable channels (Plus I like the CSI trilogy reruns)

TruTV (Comcast Channel 71) - This channel should be renamed to the Reality Network (Ohh wait, another channel has a similar name. How silly of me. Such a waste when you consider that other channel doesn't even have much in the way of REAL Reality TV to begin with! :mad: )

TNT (Comcast Channel 40) - One of the places I go for my drama fix

USA Network (Comcast Channel 24) - My main "Go To" channel for my Law & Order fix

Spike TV (Comcast Channel 70) - My main "Go To" channel for my CSI fix

G4 (Comcast Channel 136) - Only when COPS is on. Otherwise, the offering HAS to be good.

Of course there are others, but they either just don't have much of anything that appeals to me (FX Comcast Channel 27 & WGN America Comcast Channel 52 just to name a couple examples) or are merely spinoffs of sister networks I do watch (Bravo Comcast Channel 180) which only have a small portion of that network (In Bravo's case, that is USA Network).

That said, do I need the sports channels? Well yes & no. Here's a breakdown of what I really need & what could go IMO......

KEEP

Altitude Sports & Entertainment (Comcast Channel 25 w/ Channel 5 as alternate) - Stan Kronecke's network. NUGGETS & AVALANCHE. 'Nuff said. ;)

FOX Sports Net Rocky Mountain (Comcast Channel 26) Yes it's FOX Sports, but they do cover A LOT of local sports in the area. They also cover the CU Buffs & Colorado Rockies as well.

TheMtn (Comcast Channel 411) Hey we're talking MOUNTAIN WEST CONFERENCE territory here. ;)

FOX Soccer Channel (Comcast Channel 401) True it's a niche channel, but it's the closest thing to a network tailored made for the MLS that we're likely going to see

GO

ESPN If it means lowering my bill, I'd gladly give them up in favor of a Big 12 Network (Which they syndicate via ESPN Plus anyway). In fact THE ONLY channel in this family I feel would be truly worth keeping is ESPNEWS (But even that is picked up by most of the affiliated RSOs anyway - YO MR. KRONECKE - YOO HOO!)

CBS College Sports (Comcast Channel 412) While this channel (Like ESPNU, which Comcast does not carry here in Denver for some odd reason) does a lot to give some of the lesser known teams in sports exposure they would not otherwise receive, I wonder just how long does CBS think they will be able to do this before EVERY conference has its own network & does what the Mountain West Conference did to ESPN (The MWC basically thumbed their noses up at ESPN & told them where the NHL told them where they could go).

FOX College Sports (Comcast Channels 413-415) See CBS College Sports (Comcast Channel 412).

Big 10 Network (Comcast Channel 410) WHO watches Big 10 sports here in Denver? THIS IS BIG 12 & MOUNTAIN WEST COUNTRY HERE. Wanna watch the Big 10 - MOVE TO MICHIGAN (I hear there's a pack of Wolverines starving for a decent team these days!) Besides, you don't see the SEC force-feeding its network down our throats. Why should the Big 10 be any different? The Pac-10 is just as bad (Only difference is they don't have their own network)
Could I do without some of those channels? Sure - a few. But those channels are added value to my viewing experience. I doubt "a la carte" would save me any money.
It beats bundling IMO. If I'm going to go with a bundle, I'd rather NOT go through a middle man (In other words - THE CABLE, SATELLITE AND PHONE COMPANIES).

Just my opinion.....

Cheers :D
 
That's an interesting list. To be honest with you, if it wasn't for ESPN, I'd put a regular antenna on my roof and forget about the rest of those channels. I'm over-paying for ESPN, and get a bunch of crappy other channels I never watch. Seriously, TNT, Food Network, Spike, Animal Planet, Bravo, Travel Channel, Game Network, and AMC...I mean who watches any of this stuff?? Meanwhile I read all this negativity about how dull the content is on radio. Watch some of these cable channels and you'll find out what true dullness is.

My cable company put the NFL Network and a couple others in a sports tier where I have to pay another $10 a month. But I get ESPN for free. Figure that out. Ala carte is the only answer. But at least 50 cable channels will go out of business.
 
Pat Cook,

As you say - it's just your opinion. I went down your list of favorite channels to compare with what I watch - with the exception of USA and TNT, I rarely watch any of the channels you say are your favorites. Of course, I live in California, so your local faves aren't available to me in any case.

People's tastes vary. That's why cable and satellite providers package programming the way they do. This is capitalism, folks. Both the content providers and cable/satellite providers have chosen a business model that is simple to administer, and maximizes their profits. Welcome to America.

Let's pretend this was a world where you could order up your favorite channels off an "a la carte" menu. Are any of you really naive enough to think that you would be paying less for cable? Unless you're a person that really only watches 7 or 8 channels, it's much more likely that you would be paying the same or more, but have fewer choices.

People like me who really do watch many channels would either be paying hundreds of dollars per month, or have to settle for many fewer choices.
 
Lkeller said:
People's tastes vary. That's why cable and satellite providers package programming the way they do. This is capitalism, folks. Both the content providers and cable/satellite providers have chosen a business model that is simple to administer, and maximizes their profits. Welcome to America.

Well, no...that's monopoly capitalism would be a better way to phrase it. In a truly competitive market, we'd see programming offered in a variety of manners -- as was once the case for C-Band satellite. As a couple of other posters have already noted, that market offered a choice of programming packages or a la carte. Those of us who wanted relatively few channels opted for a la carte -- and those like you who watched a bunch of channels took one of the packages.

I'm not sure why some of the alleged proponents of capitalism are so convinced that an actual free market in programming would be unworkable.

I'll also note that a la carte would be a good solution for the periodic fights that we now see between networks and cable/satellite providers regarding carraige fees. Because in an a la carte world, the networks would know that if they raised their rates, the end viewer would directly see the result -- and would be free to "vote" on the rate increase by choosing to keep or cancel the network. I suspect that knowledge would impose some much needed market discipline on carriage fees.
 
Wow ,nice article,ESPN,I never watch the channel,I'm in the same d@m state is ESPN headquarters is we have to pay a kings ransom for the channel,wow Isee the 1 cent channel at the bottom.ESPN should be there.Ok ,now how about a list of local OTA stations charge for retransmission.
 
TexasTom said:
Lkeller said:
People's tastes vary. That's why cable and satellite providers package programming the way they do. This is capitalism, folks. Both the content providers and cable/satellite providers have chosen a business model that is simple to administer, and maximizes their profits. Welcome to America.

Well, no...that's monopoly capitalism would be a better way to phrase it. In a truly competitive market, we'd see programming offered in a variety of manners -- as was once the case for C-Band satellite. As a couple of other posters have already noted, that market offered a choice of programming packages or a la carte. Those of us who wanted relatively few channels opted for a la carte -- and those like you who watched a bunch of channels took one of the packages.

I'm not sure why some of the alleged proponents of capitalism are so convinced that an actual free market in programming would be unworkable.

I'll also note that a la carte would be a good solution for the periodic fights that we now see between networks and cable/satellite providers regarding carraige fees. Because in an a la carte world, the networks would know that if they raised their rates, the end viewer would directly see the result -- and would be free to "vote" on the rate increase by choosing to keep or cancel the network. I suspect that knowledge would impose some much needed market discipline on carriage fees.

Cable TV does not meet the definition of "monopoly"... a market with many buyers but only one seller. I guess you can say they have some of the characteristics of monopoly in the sense that local governments bargain and sign agreements with specific cable companies who become the only cable provider in a geographic area. But the fact is, viewers do have choices. If you don't like your cable provider, you can get essentially the same service from 3 satellite providers.

In any industry, there are generally only a few choices - there is typically an industry shake out, after which the stronger corporations dominate, and the lesser providers either go out of business, or struggle along with a very small share of the market. It's been true with TV, cell phone providers, computer operating systems, and internet providers.

I understand that many early satellite adopters preferred the C-band era programming model. But if "a la carte" is still a viable business model, why isn't one of the satellite providers operating with that model? AT&T U Verse is the most recent satellite provider. Maybe they should have tried the a la carte programming model to distinguish themselves from the others. Then hundreds of thousands of folks who resent the 200+ channel model would have flocked to AT&T to pay separately for their 7, 8, or a dozen channels, and AT&T would have made a fortune. Instead, all AT&T has to brag about now are their supposedly superior DVR system.

Gee - they sure are stupid. Or maybe not.
 
KeithE4 said:
The sports channels plus CNN are the only channels I would want. I don't want to pay for all that other garbage!

At the rate MSNBC is going ratings-wise, maybe it would be a good idea to have their network bundled with the shopping channels and public affairs channels on the broadcast basic tier... ;D
 
Lkeller said:
TexasTom said:
Lkeller said:
People's tastes vary. That's why cable and satellite providers package programming the way they do. This is capitalism, folks. Both the content providers and cable/satellite providers have chosen a business model that is simple to administer, and maximizes their profits. Welcome to America.

Well, no...that's monopoly capitalism would be a better way to phrase it. In a truly competitive market, we'd see programming offered in a variety of manners -- as was once the case for C-Band satellite. As a couple of other posters have already noted, that market offered a choice of programming packages or a la carte. Those of us who wanted relatively few channels opted for a la carte -- and those like you who watched a bunch of channels took one of the packages.

I'm not sure why some of the alleged proponents of capitalism are so convinced that an actual free market in programming would be unworkable.

I'll also note that a la carte would be a good solution for the periodic fights that we now see between networks and cable/satellite providers regarding carraige fees. Because in an a la carte world, the networks would know that if they raised their rates, the end viewer would directly see the result -- and would be free to "vote" on the rate increase by choosing to keep or cancel the network. I suspect that knowledge would impose some much needed market discipline on carriage fees.

Cable TV does not meet the definition of "monopoly"... a market with many buyers but only one seller. I guess you can say they have some of the characteristics of monopoly in the sense that local governments bargain and sign agreements with specific cable companies who become the only cable provider in a geographic area. But the fact is, viewers do have choices. If you don't like your cable provider, you can get essentially the same service from 3 satellite providers.

In any industry, there are generally only a few choices - there is typically an industry shake out, after which the stronger corporations dominate, and the lesser providers either go out of business, or struggle along with a very small share of the market. It's been true with TV, cell phone providers, computer operating systems, and internet providers.

I understand that many early satellite adopters preferred the C-band era programming model. But if "a la carte" is still a viable business model, why isn't one of the satellite providers operating with that model? AT&T U Verse is the most recent satellite provider. Maybe they should have tried the a la carte programming model to distinguish themselves from the others. Then hundreds of thousands of folks who resent the 200+ channel model would have flocked to AT&T to pay separately for their 7, 8, or a dozen channels, and AT&T would have made a fortune. Instead, all AT&T has to brag about now are their supposedly superior DVR system.

Gee - they sure are stupid. Or maybe not.

Agreed. What people seem to be missing here, is that in capitalism, the point is to MAXIMIZE profits. It costs a lot of money to run fiber optics to individual homes, shoot satellites up into space or even set a satellite dish on someone's rooftop. So we suck it up and have programming packages and discounted purchase or rental rates on equipment. It works the same way that cell phone providers do, lowering costs for everyone through mass production. If you start a-la-carte pricing, you dilute the ability of service providers to offer relatively inexpensive service to everyone. How many telephony companies offer pay by the minute services? They provide discounted equipment and bundle minutes. Sometimes you use all of your minutes, sometimes you have a crapload of extra minutes.

If you want to pick and choose specific shows, then buy them on DVD or on the internet as I have already mentioned. These are methods that make it even cheaper for consumers, while still allowing for programming providers to turn a profit, as their overhead is minimal.

AS Lkeller points out, the only thing that will come from a-la-carte is less programming at essentially the same rates.
 
Lkeller said:
I understand that many early satellite adopters preferred the C-band era programming model. But if "a la carte" is still a viable business model, why isn't one of the satellite providers operating with that model?

C-band sat was overtaken by the pizza-pan sat providers due to lower equipment cost, lower complexity and lack of space for the big dish for many potential customers. Lower programming costs was not a selling feature but pizza-pan resellers got customers by giving away the equipment and charging more for their packages.

Asked and answered already. The "package-only" model provides more profit for the programmer, reseller and less administrivia for the reseller. It is generally not a benefit to the end customer.

If all your competitors support only the package model and it provides more profit why would you adopt it (unless you wanted to use ala carte to lure their existing customers away)? AT&T obviously didn't want to take the risk.
 
Lkeller said:
Cable TV does not meet the definition of "monopoly"... a market with many buyers but only one seller. I guess you can say they have some of the characteristics of monopoly in the sense that local governments bargain and sign agreements with specific cable companies who become the only cable provider in a geographic area. But the fact is, viewers do have choices. If you don't like your cable provider, you can get essentially the same service from 3 satellite providers.

And those agreements have been banned as it is. You have not just two satellite companies, but U-Verse and FiOS rapidly expanding, and in many areas, companies like WOW or others like them all providing TV service. You're absolutely right--viewers have choices (the first of which is not paying for any TV service).
 
I just don't see Ala-Carte working well here yet. I mean look at what Comcast did in regards to higher prices....sports networks were asking ridiculous amounts of money, so Comcast started a new tier. So instead of EVERYONE paying an extra dollar, the people who want it pay an extra $7. People complain, and networks have sued.

If not everyone paid for ESPN, the price would go up, I can almost guarantee that. So, instead of it being $4 per sub, it would probably be $8 per sub. Now, add in the markup by the cable companies, because they need to pay for the infrastructure too (and they'll probably add on a "connection fee" like Power Companies have to the tune of $7).

So, if you watched 10 channels (including your local channels) then MAYBE ala carte would make sense. Let's say the general entertainment channels cost $2 a piece (remember, less people are paying for them, so it costs more to keep them on the air AND we start looking at lost ad revenue, so programming likely takes a hit). So, for 10 channels, you are up to $20, then the cable company adds on the $7 fee. Add taxes, and you're likely topping $30-35. For 10 channels. Lets think about this now, I can currently get 20 channels from Comcast for less than $20 (but I can't choose which ones). Seems like number for number though, thats a better deal.

OK, now what happens to channels that can no longer pay the bills? I mean, these channels will loose casual viewers too (like myself who flips through all the channels til something catches my eye). So, take the top 20 cable networks. If all you watch are those top 20, you'll probably be OK (although the programming quality will take a big hit, so don't expect the high quality originals you get now). For those (like most) who watch channels outside of the top 20, start saying goodbye, because with Ala Carte, they won't be able to pay the bills to keep the lights on.

Now, I know many talk about "packages" and that might be best, but how do you divide them up?

Oh and if you think the cable company will take a hit on profit margin you are NUTS. They'll jack EVERYTHING up. Those who want to continue getting what they have now will pay more, and with many networks going dark, they will be getting less.

The best option for the cable industry is to become a middle man. Charge me to be connected to your pipe, to keep the network lit up, and thats it. Then, go to programming and say "look, we will DELIVER your content to our subscriber base, but you can't charge us anything, you want viewers, we got em". Obviously, thats not happening anytime soon. With "Must Carry" all but dead, every channel is soon going to get a piece of the cable bill.
 
Well, former FCC Chairman Kevin Martin tried to pass a-la-carte pricing a couple of years ago but was roundly defeated. Now many people have a cable bill that has ballooned to 100.00 and beyond and are paying for many channels they don't watch. I was at that point until I put up an antenna and fired my cable company.

But we are seeing more people move away from cable and use a combination of technologies to receive television. Some are combining satellite TV, like Direct TV or Dish, and OTA. Others are combining OTA and internet services like Hulu and NetFlix using either Boxee or Apple TV or just a computer interfaced with their HD monitor. It is the later combination that has MVSPs very worried and with good reason.

Of course, things aren't easy for cable providers. Re-Trans fees can be very high, ESPN being the highest at this point. But CBS and the other networks are also seeking more, much more, than .30-.50 per subscriber. Normally this would be passed on to consumers and probably will. But now that there are alternatives to cable, these MVSPs need to be careful about pricing lest they touch off a mass defection from their services.

One of my objections is the poor picture quality of so-called HD channels from cable. An OTA HD signal is beautiful to watch--the Olympics on NBC was stunning. But cable providers take an already compressed MPEG-2 signal and compress it even further in MPEG-4 to fit it into a relatively narrow bandwidth. The results are often hideous.

c5
 
In almost all places cable TV meets the exact definition of a monopoly. In order for it not to be a monopoly anyone could start a cable TV franchise in any city they wanted. This isn't possible. Saying cable isn't a monopoly 'cause of dish and u-verse type deals is like saying the Gas company isn't a monopoly, 'cause you can use electricity to heat your house and cook your food.

In fact the few places where cable isn't a monopoly and subscribers can switch carriers you find lower prices.

They need to break up cable like they did with Ma Bell and force them to allow anyone to use their cable to provide service. Then you'll see prices drop.
 
Mark said:
In order for it not to be a monopoly anyone could start a cable TV franchise in any city they wanted.

Not exactly true. It is an regulated monopoly, in the same way as the examples you mentioned of gas and electric. The regulated monopoly is supervised by a local community board that oversees rates, service, and other issues. The board is there to prevent or control excesses that could happen with a monopoly.

I have had phone service since before deregulation, and my bill now is at least three times as much as it was during Ma Bell monopoly. And the service was better. Repairs were free when the phone company owned the equipment. Competition has not lowered prices. In most cases its lowered quality. But prices appear to be pretty equal regardless of carrier.
 
Mark said:
In almost all places cable TV meets the exact definition of a monopoly. In order for it not to be a monopoly anyone could start a cable TV franchise in any city they wanted. This isn't possible. Saying cable isn't a monopoly 'cause of dish and u-verse type deals is like saying the Gas company isn't a monopoly, 'cause you can use electricity to heat your house and cook your food.

In fact the few places where cable isn't a monopoly and subscribers can switch carriers you find lower prices.

They need to break up cable like they did with Ma Bell and force them to allow anyone to use their cable to provide service. Then you'll see prices drop.

This could easily turn into the typical political brawl that erupts on the forums so very often.

Here in Georgia a few years ago it was decided that the horrible monopoly of Atlanta Gas should be broken up so now we have eight or ten "marketing companies" to choose from. With the volatility of the world energy prices who can say whether this has saved us money or cost us money?

I guess four different cable companies could run four different coaxes down the street and we would see competing technologies, etc. giving different quality of service and different price. But how could we pay for four different cables coming down the street and actually have fantasies that when you add up everyones cable invoices the the actual cost per family would be reduced?

Back to our gas situation. The old "monopoly" company still owns and maintains the pipes, they still read all the meters. They send the meter readings out to the eight or ten marketing companies so now we have eight or ten billing operations, eight or ten accounting offices, and eight or ten collection units. But everybody gets exactly the same gas as always, the same employees come and dig up pipes to repair leaks. And those who worship at the shrine of Ayn Rand promise us that we are certainly paying LESS for gas today than if we only had one company with one set of advertising, one billing department and one collection department.

Now if you will excuse me, my monthly gas bill is about due. I had my wife pull one of my teeth today and I must hurry and put it under my pillow tonight so the Tooth Fairy can bring me some extra cash by morning to pay the gas bill. Thank goodness for eight marketing companies.... or I would have had to pull TWO teeth.
 
TheBigA said:
Mark said:
In order for it not to be a monopoly anyone could start a cable TV franchise in any city they wanted.

Not exactly true. It is an regulated monopoly, in the same way as the examples you mentioned of gas and electric. The regulated monopoly is supervised by a local community board that oversees rates, service, and other issues. The board is there to prevent or control excesses that could happen with a monopoly.

I have had phone service since before deregulation, and my bill now is at least three times as much as it was during Ma Bell monopoly. And the service was better. Repairs were free when the phone company owned the equipment. Competition has not lowered prices. In most cases its lowered quality. But prices appear to be pretty equal regardless of carrier.

Regulated but still not a monopoly, which by definition means "one." Thus, with a minimum of three companies offering TV service in most areas and sometimes four or more, it is not a monopoly. The exact method for getting History channel to your house isn't the point, the end result--seeing it on your TV--is.
 
Goat Rodeo Cowboy said:
I guess four different cable companies could run four different coaxes down the street and we would see competing technologies, etc. giving different quality of service and different price.

Unlike the situation with gas (or in some states, electricity), there are indeed two or more sets of cable where competition exists. One example is Pinellas County, FL, where Bright House and Knology compete -- they each have their own sets of cable and equipment on the lines and in the ground. Result -- lower cable costs, compared to Hillsborough and Pasco, where Bright House is the only cabler. No doubt they'll be even more competition in Pinellas as Verizon FiOS expands.
 
azumanga said:
Goat Rodeo Cowboy said:
I guess four different cable companies could run four different coaxes down the street and we would see competing technologies, etc. giving different quality of service and different price.

Unlike the situation with gas (or in some states, electricity), there are indeed two or more sets of cable where competition exists. One example is Pinellas County, FL, where Bright House and Knology compete -- they each have their own sets of cable and equipment on the lines and in the ground. Result -- lower cable costs, compared to Hillsborough and Pasco, where Bright House is the only cabler. No doubt they'll be even more competition in Pinellas as Verizon FiOS expands.

But, there is a limit, both from the city and private companies. From the city perspective, how many boxes do you want on every corner of every street? Because each company needs a box at least at the end of every street. And how much room exists for cabling in right of way land? We don't want to interfere with other cabling projects.

From the company's perspective, how much money do we want to spend? Building out the infrastructure is NOT cheap, nor is maintaining it. When I was growing up, our local cable company passed us by. In order to get cable service down our road, we had to prove to the cable company that at least 30% of the residents of our street would want it, otherwise they didn't see a ROI on laying the infrastructure.

Where I live now, our city does not allow "cherry picking". We've seen several companies wish to get into the cable game here, but they don't want to build the infrastructure to the non-profitable areas (IE rural) only in downtown. The city won't allow this, because they want the same utility service to be available to all residents.

Competition MAY bring down prices, but its doubtful, because SOMEONE has to pay the bills, and that someone is you and I. If less people are around to split the costs, then the cost per sub will go up. The only thing we can do is cancel cable and satelite until someone finally says "enough with escalating programming costs, nobody is paying them". The problem we see was illustrated both with Food Network and ABC in NY. Both wanted higher fees for carriage, and people don't want to live without the programming. If you drop Food Network or ABC, you loose subscribers, but if you raise prices to keep paying for them, you loose customers.

The only real losers here are the cable companies.
 
TheBigA said:
It is an regulated monopoly, in the same way as the examples you mentioned of gas and electric. The regulated monopoly is supervised by a local community board that oversees rates, service, and other issues. The board is there to prevent or control excesses that could happen with a monopoly.

I don't know what "regulation" is like where you live but it seems the only thing the city cares about in my neck of the woods is their franchise fee. There is virtually no oversight for cable at all and none whatsoever for sat.

TheBigA said:
I have had phone service since before deregulation, and my bill now is at least three times as much as it was during Ma Bell monopoly.

There are a number of factors you'd have to take into consideration before making a flat cost-then vs cost-now comparison. In 1967 I paid between $2-$3/month for basic landline phone service. It costs about $22/month now. Most of that increase is inflation ($2.50 in '67 would be a tick over $16 now) but there have also been other costs added. 911 service fees and taxes (which now account for over $6 of my monthly bill).

Other things have not changed. The phone still works every time I pick it up. What's not to like?
 
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