Another nail for Cable TV's (all bundled subscription) coffin?

[Lsbcal]

Just for fun I looked at how many channels we have and actually watch.

• Our package is called Americas 120, yet it says 190+ channels? We pay just over $70/mo with everything.
• We actually watch 21 of them more than once a year, about 5%.
• There are only 13 we watch regularly.
• So about 95% of the channels could go away and we'd never miss them.

I'd be surprised if they all tried to charge $5-6/mo, some would be less or we'd learn to get by with less than 13.

Remember when we were kids and had about 4 channels (3 networks and PBS)?

We pay about $107/mo now. This includes internet at 50 Mbps. I got the price down by telling them DW would pull the cord if I didn't lower the bill and how I really still wanted the sports stuff. That got me their retention specialist.

We have to use Comcast for internet as there are no good alternatives otherwise. We probably only watch about 1 hour per day of TV and that includes PBS news. Occasionally I go on a rampage and record some hours of something like "Cops" or one of those silly food reality shows. Then watch them when I'm about to head off to bed early.

The HD reception is great and I would not want to go back to the old days. It is a luxury but we can afford it. Don't want to leave too much for our heirs.

 

[Midpack]

Does anybody know how the economics of the channel bundling work? I.e. which channels are getting more under bundling than if they were sold a la carte and vice versa? or is it more of a situation that everyone is paying more than they would if channels were sold separately?

I guess nobody knows for sure as this is a hypothetical but are there any well thought out analyses/simulations on this?

No but...

I have seen several recent reports stating ESPN costs $5.50/mo.

And I found this supposed detailed channel cost breakdown from 2009.

You might be able to ballpark extrapolate a 2014 table using both bits of info.

However, I don't see the major or any OTA networks listed...

Have ESPN’s Profits Obscured A Mediocre Return On Disney’s Big Acquisitions? | Deadline

ESPN, Fox Sports, NFL Network Cost The Most To Get On TV - Arrowhead Pride

 

[LoneAspen]

Nice tool there. Looked like for us we'd need a roof mounted antenna. Against the HOA cc&R's here.

HOAs might not be able to prevent it, if it falls within the FAA's Over-the-Air rules:

Over-the-Air Reception Devices Rule | FCC.gov

 

[photoguy]

And I found this supposed detailed channel cost breakdown from 2009.

Thanks for posting -- this is really fascinating. It lists the average cost per channel at 20 cents, so if only say 1 in 5 households watched it a revenue neutral a la carte would be $1 (assuming people buy just as much a la carte).

 

[Texas Proud]

Does anybody know how the economics of the channel bundling work? I.e. which channels are getting more under bundling than if they were sold a la carte and vice versa? or is it more of a situation that everyone is paying more than they would if channels were sold separately?

I guess nobody knows for sure as this is a hypothetical but are there any well thought out analyses/simulations on this?

I am responding after the other post with the prices...

Yes, a lot of small change channels.... but since 100% of the people are paying, that can add up to a lot of money for some food channel that might only be looked at by 1% of the people...

Also, the content providers bundle what they have... take ESPN.... there are a good number of channels I get from them... how many from Turner or XYZ (don't know who they are... soooo).....

The HBOs and other movie channels are paid separate.... and I do not buy them because I just do not watch enough movies on them.... I have been given them for 3 months a couple of times and just do not see the value...


I will have to check out what I do... I bet I could get down to between 5 and 10 channels that I would want that are not network... but then again I think the cable companies have to pay the networks now....

 

[Gotadimple]

I am not exactly convinced that buying a la carte will cost less than a bundled package.

Netflix, Hulu, etc are bundled services, just like a cable provider. For a flat monthly fee, they provide access (whether you look at all they offer or not). They're cheaper because you can't watch it as it broadcasts.

Think about the cost of telephone service - before the internet and cell phones - and with the ATT virtual monopoly. And what the same phone service (local/long distance only) cost after the break-up.

Same for airline pricing.

Long-term, paying for each channel you might want to watch directly might cost more than what you pay a cable provider today.

-- Rita

 

[Lsbcal]

We can all theorize about this stuff and it is sort of fun. What is unclear is how tech changes will add to options and a richer experience.

The old standalone ATT landline model is hugely outdated by all the tech advances we could not foresee. I cannot easily compare the costs to the old stuff because we have so much more in communications now and the old landline phone has been somewhat absorbed by the spectrum of talk/text/data. BTW, I still have a redundant ATT landline here in earthquake country for $40/mo.

 

[Texas Proud]

I am not exactly convinced that buying a la carte will cost less than a bundled package.

Netflix, Hulu, etc are bundled services, just like a cable provider. For a flat monthly fee, they provide access (whether you look at all they offer or not). They're cheaper because you can't watch it as it broadcasts.

Think about the cost of telephone service - before the internet and cell phones - and with the ATT virtual monopoly. And what the same phone service (local/long distance only) cost after the break-up.

Same for airline pricing.

Long-term, paying for each channel you might want to watch directly might cost more than what you pay a cable provider today.

-- Rita

You are missing what we want.... we want to pay a cable company for the channels we wish to watch.... not the individual channels themselves....

I have DISH.... they are paying a LOT of channels money that I pay to them... if they would allow me to pick the channels I want, I am sure it would cost much less than what I am paying for now.... I bet I could throw out 100 channels at say 25 cents each savings $25... pay the ones I want a bit more and I am good to go... and if one or two try and get greedy and ask for more than a buck or so a month then I drop them...


But the main thing is that you are still going thru a cable provider...

 

[PhrugalPhan]

Seriously, try TV Fool if you haven't yet. It's as accurate as they come. If you see your stations in the "yellow" or closer, a good outdoor antenna will get them. If they are in the red, adding a preamp to a high-gain outdoor antenna will probably do the trick. Purple will be tougher but occasionally doable with a strong antenna and preamp setup.

TVFool uses precise, address-specific info to find your GPS coordinates and maps that against terrain and the broadcast towers, and it's by far the best tool out there.

Nice - I think I tried this site once before. Unfortunately while it takes into account most things like the terrain, it doesn't deal with issues like the airport between me and the "supposed" best channels that periodically scrambles TV transmissions. With the old analog signals this wasn't too bad, but with digital ...

 

[Gotadimple]

You are missing what we want.... we want to pay a cable company for the channels we wish to watch.... not the individual channels themselves....

I have DISH.... they are paying a LOT of channels money that I pay to them... if they would allow me to pick the channels I want, I am sure it would cost much less than what I am paying for now.... I bet I could throw out 100 channels at say 25 cents each savings $25... pay the ones I want a bit more and I am good to go... and if one or two try and get greedy and ask for more than a buck or so a month then I drop them...


But the main thing is that you are still going thru a cable provider...

Yah, Texas Proud, that would be great if we all understood the pricing model the cable company (or Netflix, or Hulu+) uses. Unfortunately, like everything retail, some channels subsidize other channels, and the service company has a profit built it as well.

So, you get one layer of service with the cable company that includes 40 channels - mostly ones not too interesting, but three to five that basically are useful to you (those 5 pay for the other 35). That means you're paying $60 a month for the 5 channels that have some usefulness, and and the other 35 are free!

But if you really want some additional channels in the next tier, you have to pay the added $20 for another 50 channels, of which you only wanted three. And $30 for another 50 channels in Tier 3.

The cable company could get you an a la carte menu, but the pricing would be much different: Like
$60 for the basic channels
$10 per month for each channel in Tier 2,
$20 per month for each channel in Tier 3. Pretty soon, you're looking at:

$60 (sorry sir it's the minimum charge + the taxes don't forget those!)
$20 for the 2 channels in tier 2 you want
$40 for the 2 channels in tier 3 you want
So, $120 + taxes per month for cable a la carte

You can have it your way!

I don't know what you pay, but I pay $60 a month for basic plus tier 2 channels (and I don't care about what they have in tier 3).

-- Rita

 

[Texas Proud]

Yah, Texas Proud, that would be great if we all understood the pricing model the cable company (or Netflix, or Hulu+) uses. Unfortunately, like everything retail, some channels subsidize other channels, and the service company has a profit built it as well.

So, you get one layer of service with the cable company that includes 40 channels - mostly ones not too interesting, but three to five that basically are useful to you (those 5 pay for the other 35). That means you're paying $60 a month for the 5 channels that have some usefulness, and and the other 35 are free!

But if you really want some additional channels in the next tier, you have to pay the added $20 for another 50 channels, of which you only wanted three. And $30 for another 50 channels in Tier 3.

The cable company could get you an a la carte menu, but the pricing would be much different: Like
$60 for the basic channels
$10 per month for each channel in Tier 2,
$20 per month for each channel in Tier 3. Pretty soon, you're looking at:

$60 (sorry sir it's the minimum charge + the taxes don't forget those!)
$20 for the 2 channels in tier 2 you want
$40 for the 2 channels in tier 3 you want
So, $120 + taxes per month for cable a la carte

You can have it your way!

I don't know what you pay, but I pay $60 a month for basic plus tier 2 channels (and I don't care about what they have in tier 3).

-- Rita

But I do not see the prices like you do...

Say $20 to have you connected.... (maybe $10)... maybe $10 for local channels (maybe less)... and then you buy only the 5 or 10 channels you want at say $1 each and maybe $5 for ESPNs many channels... total of $45 instead of the $70ish I pay now...


And we all know that they can charge much less than what they do since they ALWAYS have a special going on for new customers.... and half the price we are paying..... or even less....

 

[tryan]

Live sports are the only thing that keep us from cutting cable.

Every year I call Scamcast and re-initiate the new customer rate by threatening to go to Dish. Little bit of a PITA ... but it keeps the cable and internet to about $100/mo.

That said, I am rehabing the basement at the lake in a game room theme and will have a flat panel screen on the wall with a Roku. Between Roku and a Slingbox we get what we want at the lake. Really not interested in 2 cable bills.

 

[Gotadimple]

But I do not see the prices like you do...

Say $20 to have you connected.... (maybe $10)... maybe $10 for local channels (maybe less)... and then you buy only the 5 or 10 channels you want at say $1 each and maybe $5 for ESPNs many channels... total of $45 instead of the $70ish I pay now...


And we all know that they can charge much less than what they do since they ALWAYS have a special going on for new customers.... and half the price we are paying..... or even less....

Interesting Idea! First year service is a loss leader, and they don't make money on the customer. But they do when you get past the first year.

I think there is a lot to be said for wanting to pay for only what you use. I do that with cell phone service, using a pay as you go provider. Using the phone service is relatively inexpensive, but buying the cell phone is not!

But I suspect that to make the minimum profit that cable companies need to pay salaries and re-invest in the technology, a la carte pricing will be a lot higher. I think if you could get a reduction for the channels you don't want, the credit would be significantly less than you think it should be.

Bottom-line: fiber optic cable (or satellites) and maintaining that network is not cheap - the content that goes over the network is cheap, as you've discovered.

-- Rita

 

[HawkeyeNFO]

HOAs might not be able to prevent it, if it falls within the FAA's Over-the-Air rules:

Over-the-Air Reception Devices Rule | FCC.gov

HOAs have been taken to court over this. They cannot prevent people from putting up an antenna to receive TV.

 

[taniabiddle]

Bundled subscriptions

I'm living in an over 55 retirement community in PA. We are restricted as to our telephone, cable company and internet provider. I was very happy to read that info in the Verge. We get over charged for it all and cannot change. I would very much like to use another carrier. Is this bundling lawful in PA?

I'll stayed tuned to this thread.: