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Lets Talk A la Carte Cable

Posted on 4/23/14 at 10:10 am
Posted by elprez00
Hammond, LA
Member since Sep 2011
29387 posts
Posted on 4/23/14 at 10:10 am
Seeing that Prime is getting HBO shows got me thinking about how the ala carte business model would work.

There are so many barriers in place to making this happen its not even funny. Lets supposed Cox decides to offer ALC packages. They'll more than likely do it using a tier based system (X$ for this group, XX$ for that group, XXX$ for sports/HBO, etc) How much money is this actually going to save? This might actually drive prices up. Plus, you'd still have to have their cable box, etc. And, you're basically screwed in competition, as Cox still owns all the lines and distribution, making the likelihood of another provider moving in slim to none.

Online distribution is better, as you could use different providers for content. But, you're still chained to an internet provider, who could conveniently start charging "streaming fees" for online cable customers. Then theres the problem of reaching consumers that don't have access to high bandwidth internet connections.

So whats the end solution? I think the cable companies are starting to understand their model is dying, especially as more people turn to DVR and Online streaming for their TV needs, but I predict they will fight this change tooth and nail, because it will mean the death of paying $100+/month for TV.

I love talking about this, and hope one day it will happen, but I'm a little lost on how we get there.
Posted by lpgreat1
Monroe, LA
Member since Nov 2007
1509 posts
Posted on 4/23/14 at 10:19 am to
I don't think there is any doubt that a majority of people are wising up to the value of streaming versus cable. A la carte is the future, no doubt. Cable companies will have to compete or become obsolete.

In my opinion, once major sports become available for live streaming, meaning the NFL or ESPN provides all games through an over-the-top streaming subscription, cable will start dying quickly. The only reason I haven't cut the cord yet is because of sports. Many in the target demographic, males 18-34, certainly are in the same boat.

Charging for "groups" or "genres" of content does not solve the essential problem of cable which is that customers are paying for things they don't watch.

A model that cable could switch to would be charging between $5 and $10 for a block of any 10 channels that the customer chooses. I would imagine most cable customers pay for upwards of 200 channels but probably watch less than 40 on a regular basis. Allow the customer to pick the channels they want in blocks of 10. Meaning if you want 43, you pay the price for 50.
Posted by RonFNSwanson
University of LSU
Member since Mar 2012
23172 posts
Posted on 4/23/14 at 10:23 am to
quote:

A model that cable could switch to would be charging between $5 and $10 for a block of any 10 channels that the customer chooses. I would imagine most cable customers pay for upwards of 200 channels but probably watch less than 40 on a regular basis. Allow the customer to pick the channels they want in blocks of 10. Meaning if you want 43, you pay the price for 50.


I can't wait for the day when this happens
Posted by alajones
Huntsvegas
Member since Oct 2005
34476 posts
Posted on 4/23/14 at 10:28 am to
I wish I only paid 100$ a month for cable TV.

I think I'm one of the few on this board who enjoys channel surf. There are lots of shows I watch now that I never would have found if given an a la carte choice of channels.
Posted by jmarto1
Houma, LA/ Las Vegas, NV
Member since Mar 2008
33956 posts
Posted on 4/23/14 at 10:34 am to
The first cable company that does this while offering sports will survive.
Posted by loopback
Member since Jul 2011
4869 posts
Posted on 4/23/14 at 10:36 am to
What most folks don't realize is this. For Cox to carry a certain channel, they pay a fee to the channel. Bundling of channels allows them to keep prices cheaper. (like an HMO) Someone wrote an article on what A La Carte service would cost for ESPN, that channel alone was upwards of $30/mo
Article

On the issue of cable vs streaming. There is no doubt the RF (Coax) design is dying. Before long IP TV will be where it's at. Companies like Cox will become strictly ISPs and will charge for internet alone. How that model is designed is yet to be seen. My guess is they will either have to move to a Pay-Per-Use model or they will have two "types" of internet one for "TV" and one for "Web Browsing"
Posted by Ash Williams
South of i-10
Member since May 2009
18146 posts
Posted on 4/23/14 at 10:41 am to
i think this would also mean the death of lots of smaller tv shows and channels that people just arent willing to spend the extra $2 per month to buy because they decide its not worth it

so if stuidos arent paying to have those shows developed, their major shows/channels could be sold at a cheaper rate
Posted by Dr RC
The Money Pit
Member since Aug 2011
58074 posts
Posted on 4/23/14 at 10:41 am to
quote:

What most folks don't realize is this. For Cox to carry a certain channel, they pay a fee to the channel. Bundling of channels allows them to keep prices cheaper. (like an HMO) Someone wrote an article on what A La Carte service would cost for ESPN, that channel alone was upwards of $30/mo


With what ESPN has been paying out to various sports entities for broadcast rights I doubt it would only cost $30.

Never mind that if cable goes a la carte it guarantees internet subs will skyrocket in price.

These companies are going to get their money either way. They aren't stupid.
Posted by loopback
Member since Jul 2011
4869 posts
Posted on 4/23/14 at 10:50 am to
quote:

These companies are going to get their money either way. They aren't stupid.


This. +1
Posted by bamafan425
Jackson's Hole
Member since Jan 2009
25607 posts
Posted on 4/23/14 at 11:00 am to
I think a la carte cable is still further off than we imagine. I hope not.

I've been without cable for over a year now, and I don't miss it one bit.
Posted by Scrowe
Louisiana
Member since Mar 2010
2926 posts
Posted on 4/23/14 at 11:15 am to
quote:

There are so many barriers in place to making this happen its not even funny.


Biggest barrier are the networks, not the providers. Channels are owned by 6 companies, so why would they want A la Carte services whenever selling their channels in bundles makes them more money in advertising then if they were to have each channel ALC.

quote:

They'll more than likely do it using a tier based system (X$ for this group, XX$ for that group, XXX$ for sports/HBO, etc) How much money is this actually going to save?


More than likely, none, probably will raise what you pay in the end.

quote:

Online distribution is better, as you could use different providers for content. But, you're still chained to an internet provider, who could conveniently start charging "streaming fees" for online cable customers.


I love how say this is "convenient" for the internet providers to charge "streaming fees". You expect a company to invest millions of dollars into a network and just let people use it cost free? All of these conversations are started by people with no business sense.

I'm a business and companies are trying to take away my revenue, yet they want to increase the burden of my network. I should just sit here and watch my profits fall while the networks moving to a la carte are increasing their revenue on the back of my assets.

quote:

I think the cable companies are starting to understand their model is dying


Their model is only being sold with what they are given and how they are allowed to sell it.

quote:

but I predict they will fight this change tooth and nail


You have the wrong culprit on who is fighting it, it's the networks not the providers.

quote:

because it will mean the death of paying $100+/month for TV


Who pays over 100 bucks for just TV? Maybe TV/phone/internet combined, but not just TV unless you are getting the entire line up, which you wouldn't do with a la carte anyhow.

Just look at what HBO costs alone, about 12-15 bucks a month. You think other channels won't cost that much? Be careful what you wish for whenever this hits the public may welcome in something with open arms that is more than what they expected.
Posted by dallastiger55
Jennings, LA
Member since Jan 2010
27722 posts
Posted on 4/23/14 at 11:20 am to
quote:

What most folks don't realize is this. For Cox to carry a certain channel, they pay a fee to the channel. Bundling of channels allows them to keep prices cheaper. (like an HMO) Someone wrote an article on what A La Carte service would cost for ESPN, that channel alone was upwards of $30/mo



this guy is right

ive worked in the pay TV business for 9 years now and what people dont realize is its not going anywhere for a long time. ive seen the numbers, despite all the talk Netflix and Hula ARE NOT hurting the numbers.

studies are showing that people are getting more of a secondary offer vs there main tv source

i just went to DIRECTVs conference last week in Vegas and through Q1 they have had there best quarter in the history of their company, up 21% year over year.

its not going anywhere
Posted by Neauxla
New Orleans
Member since Feb 2008
33443 posts
Posted on 4/23/14 at 11:29 am to
It will require the networks to start offering streaming directly.
Posted by Scrowe
Louisiana
Member since Mar 2010
2926 posts
Posted on 4/23/14 at 11:33 am to
quote:

With what ESPN has been paying out to various sports entities for broadcast rights I doubt it would only cost $30.


People gripe about 60 bucks for 70 channels, wonder how they are going to react when ESPN hits subscribers with that price?

quote:

Never mind that if cable goes a la carte it guarantees internet subs will skyrocket in price.


This is the point that everyone fails to see, if it goes to streaming, the increased volume from streaming content is going to have to go across the same ISP networks that were axed out of cable revenue stream. I guess they'll just sit back and enjoy the profit losses.

quote:

These companies are going to get their money either way. They aren't stupid.


That goes for the service providers and the networks. The networks know if they cut out the providers their customer base will suffer by going a la carte.

How many men are going to pay for Lifetime if they don't have to. That can be said for women paying for The Outdoor Channel and so on. They lose that much in customer base and the ability to say their channel hits x number of households with the oppurtunity of advertisements hitting those households which helps drive the cost of advertisements.
Posted by htownjeep
Republic of Texas
Member since Jun 2005
7612 posts
Posted on 4/23/14 at 11:33 am to
quote:

ive worked in the pay TV business for 9 years now and what people dont realize is its not going anywhere for a long time.

That's the exact damned attitude that Blockbuster had. These companies that do not change with the times will be destined to suffer the same fate.

They need to get off of their high horse and start actually listening to the customers. The way technology is nowadays (and who the hell knows where it will lead to next?) it's almost too easy to get illegally.
Posted by loopback
Member since Jul 2011
4869 posts
Posted on 4/23/14 at 11:40 am to
quote:

It will require the networks to start offering streaming directly


Over who's infrastructure? ESPN and HBO gonna start providing you with internet and fiber?
Posted by Scrowe
Louisiana
Member since Mar 2010
2926 posts
Posted on 4/23/14 at 11:47 am to
quote:

Over who's infrastructure? ESPN and HBO gonna start providing you with internet and fiber?


Just wait, some poster ignorant of telephony and how it all works will be here to say wireless whenever they have no clue how it all interconnects and such.
Posted by SG_Geaux
Beautiful St George
Member since Aug 2004
77977 posts
Posted on 4/23/14 at 12:13 pm to
quote:

Cable companies will have to compete or become obsolete.


Will they ? They are already putting in bandwidth caps.
Posted by Dr RC
The Money Pit
Member since Aug 2011
58074 posts
Posted on 4/23/14 at 12:13 pm to
quote:


That's the exact damned attitude that Blockbuster had. These companies that do not change with the times will be destined to suffer the same fate.


Comparing Blockbuster, a brick and mortar store that sold/rented physical products to cable/satellite companies that do little more than rent you a piece of equipment that feeds you your media content is silly.

Regardless of what you do, you will still have to go through a company to get your internet. Most of the biggest providers are owned by companies that do both cable/satellite and internet. Comcast/Time Warner/AT&T/Dish/whothefrickever are going to be the ones you either rent or buy equipment from regardless of how the system is set up.

On top of that, damn near every single TV network is owned by the same conglomerates that own the cable, satellite, and internet providers. If tv goes a la carte they will simply jack the prices of internet and those individual channels to obscene levels to make up any difference lost from the cable/satellite biz.

You are not going to be getting a better deal b/c they are guaranteed to shift the costs to you elsewhere.


quote:


They need to get off of their high horse and start actually listening to the customers. The way technology is nowadays (and who the hell knows where it will lead to next?) it's almost too easy to get illegally.




the exact same people who illegally download all their content now are not going to stop just b/c cable goes a la carte. They will come up with a new reason to justify why they don't think they should have to pay for anything.
Posted by Brosef Stalin
Member since Dec 2011
39195 posts
Posted on 4/23/14 at 12:22 pm to
The first thing that needs to happen is a major infrastructure overhaul. The whole country needs to be wired with internet only fiber optics. The internet has always piggy backed on phone and cable tv lines, its time it gets its own line. Of course this would take billions of dollars and a few decades to do.
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