The Problem With Cable Is Television 334
Saul Hansell writes in the NY Times about how various services offered by cable companies affect their spending and their revenue. As it turns out, a lot of the cost increases and investment needs are coming from television and video services rather than internet connectivity. The scramble for high-def and rising licensing fees for programming seem to be the biggest headaches for Comcast and Time Warner right now. Quoting:
"By all accounts, Web video is not currently having any effect on the businesses of the cable companies. Market share is moving among cable, satellite and telephone companies, but the overall number of people subscribing to some sort of pay TV service is rising. (The government's switch to digital over-the-air broadcasts is providing a small stimulus to cable companies.) However, if you remember, it took several years before music labels started to feel any pain from downloads. As the sour economy and the Web start putting more pressure on the cable companies, they may be forced to consider breaking up the big bundles of channels they now insist that consumers buy and instead offer individual channels or smaller groups of channels on an à la carte basis."
Not the programming (Score:5, Insightful)
I thought the problem was that the programming sucked.
standalone cable internet, please (Score:4, Insightful)
I have to pay for basic cable, and then pay an internet fee on top of that, even though I never watch TV.
If internet is less expensive to deliver than TV, why oh why won't the cable companies just let me buy what I want and need, without paying for the "basic tier" of trash?
tv began to die when appointment television died (Score:1, Insightful)
Sour economy? (Score:3, Insightful)
The "sour economy" is not putting any pressure on cable companies. None. Most people today consider TV as essential as a cell phone or natural gas. And given the escapism angle, I'd guess most Americans would pay the cable bill with their last $50.
Re:Smaller Bundles (Score:3, Insightful)
If I'm paying then I don't want to see commercials. I don't want to pay for content I'll never view either. So no bundles, I just want to pick the channels I want. The channels must be cheap as in $(basic_bundle_cost/basic_bundle_channel_count).
So far no one is providing a service like this. iTunes has two of the three requirements, but it is not cheap. I can't afford $1.99 for a single TV show.
Re:Smaller Bundles (Score:5, Insightful)
Don't bother. They're turning to dumbed down dreck like everything else.
The grouping is from the content providers (Score:5, Insightful)
I'm not a fan of cable companies. Not in any way.
But the problem with the groupings right now is that the content providers force certain groupings. For example, if you want to offer ESPN and ESPN2 (what cable company could afford not to), then Disney says "okay, if you want to offer ESPN and ESPN2, that'll $2.40 per month per subscriber". Which is $2.40 which goes straight to your cable bill. But then they say "well, but we have this new channel, ESPNU (or Classic or Disney Kids 5 or whatever), if you offer that channel IN THE SAME PACKAGE AS ESPN, we'll give you ESPN+ESPN2+ESPNU for only $1.40 per month per subscriber".
So each year, the providers will basically force another channel into their bundle this way. So each year, each of these content providers is raising the amount of money they get from each subscriber. And the cable companies have to offer big bundles in order to meet the requirements from the content providers.
Furthermore, it gives all the advantages to the big companies who already have lots of channels in your package. They can launch a new channel easily while the small guys are locked out since the bandwidth is already being chewed up by the big guys' new channels.
The internet is definitely the disruptive technology that will stop this. That is, if the cable companies and content providers don't find a way to prevent you from streaming video directly.
There's no technological reason why this bundling is necessary. It's just because the companies (cable and content providers) have found it to their advantage so far. I feel it would strongly benefit the customers to enforce an end to this bundling.
Re:DTV and cable (Score:3, Insightful)
I think there should be a "drop cable - switch to OTA" campaign.
- Same or better crisp clear picture!
- Same amount of quality programming! *
- Unbeatable price of $0.00!
(* None)
Re:Sour economy? (Score:5, Insightful)
I would NOT pay the $50 bill. I've pulled the plug, and started using Online + Netflix to cut my monthly bill by some $100. Got rid of the Dish DVR, the dual-tv plan. Now we (in my household) all use laptops and two workstations with big screens. We still have one of the old NTSC TVs for playing video games.
Online TV Rocks!
On-demand TV has an interesting quality - when you discover a show you like, you can immediately jump to see past episodes you missed. Case in point: Heroes. I just discovered this excellent fantasy show, but jumping in "mid-stream" leaves lots to be desired. I'm able to watch past episodes all the way back to season 1, in order, on my schedule.
There is no combination of Cable/Satellite/DVR that will give you this.
The result is that I suddenly have a desire to explore, try new shows for a few minutes, see if I like it. Sure, the chances of me liking some new show are relatively small, but the payoff is so high!
It's a whole new way of doing TV made possible by a decent quality 3 Mb Internet connection, Hulu, Netflix, and Cast TV [casttv.com]
Re:standalone cable internet, please (Score:2, Insightful)
Wow!
Well, it's cheaper to bring multiple services into your home per service obviously than just one.
Also, have you ever heard of volume or bundle discounts? Of course it's cheaper for people who get both services.
You aren't a rocket scientist are you?
WMC gets the final nail in its coffin (Score:2, Insightful)
Re:Smaller Bundles (Score:3, Insightful)
Off you go, then [apple.com]. Put some money where your mouth is.
Re:The grouping is from the content providers (Score:5, Insightful)
Well, of course. And you got one of the more important points, i.e. forcing new channels into more homes, so the content providers can seel teh ads for more. But I think you missed one of the key points - that by including at least one thing in each package that *someone* wants, the cable companies get paid for ALL the content, which they can then use to pay off all the providers. That's why package include, say "Lifetime Movie Network", "Speed" and "Sprout" all in one. People who are seriously interested in getting the Speed channel are not the target demo for LMN! But you can sell the entire package for a high cost to everyone who wants Speed, everyone who wants LMN, and everyone who wants Sprout, for far more than you could sell the individual channels al la Carte. The providers get the same money from the cable providers, and the cable companies get more money from subscribers, 3. PROFIT
Brett
Re:Not the programming (Score:5, Insightful)
I thought the problem was that the programming sucked.
Americans are a varied bunch -- a lot of us like a lot of very different things. For most people, the Food Network is a total waste of a channel, but I wouldn't trade it away. My old roommate loved the Golf Channel, about which I felt the kind of apathy that he probably felt for FoodTV. There is no /.ers seem overwhelmingly in favor of ala-carte pricing, but I'm quite skeptical that this will improve the quality of programming. Instead, I think it will move towards the same "top-10" mentality where money is poured into the small number of large earners while the bottom half is ignored, or worse. I would love to pay $5/mo "directly" for FoodTV (directly, in the sense that Verizon would see that cash flow and value FoodTV appropriately), but I fear the result.
Plus, I'm generally not a fan of the kind of balkinization that I feel this will produce -- people that view only the things they already know they like are unlikely to branch out and view something different. There's quite a bit of interesting wheat (in there with the chaff, of course) flipping through that large middle block of digital channels.
Re:standalone cable internet, please (Score:4, Insightful)
Oh, wait...
Re:If they broke up the channels a la carte (Score:5, Insightful)
...may be forced to consider breaking up the big bundles of channels they now insist that consumers buy and instead offer individual channels or smaller groups of channels on an à la carte basis
But I am willing to pay for the good stuff, if I can be certain I will get GOOD STUFF.
That's just the thing. You won't get good stuff for your $1/month. For me, à la carte channels aren't unbundled enough. Try unbundling to the show level. Oh wait. We have that. It's called the Internet, and bittorrent.
This is where their entire distribution model falls down. They have a channel called the SciFi channel (oops, SyFy, my bad^W wtfstupidmarketing) that is used to cablecast... horror movies and fantasy movies. There's precious little SciFi on SyFy. So if they were offering à la carte channels, SyFy might make my list, but in fact it wouldn't because there's too little content on it that is the kind I want. I have no interest in an endless stream of man-in-a-rubber-suit horror movies.
USA network used to broadcast the Highlander series. I liked it, despite their minor obsession with the correct "formula" for characters leading them to introducing their own Wesley Crusher-esque guaranteed-to-accrue-far-more-power-than-he-ever-deserves character. But the Highlander series is long gone and does USA have anything else I want to watch? I don't know. Their odds are so low that I haven't bothered to find out. So scratch them off the list.
And on and on.
You see where this is going. I want to treat TV exactly the way I treat books. I want 100% of the offering free from the library, and I'll buy the individual works that I like well enough to read(watch) again, but I'm paying no more than $5 for it (for the decrease in entertainment hours vs a $7 paperback), and I want 98% of that money to go to the people directly involved in creating the entertainment ('cause that's where publishers are going to end up one day too). The studios are a giant parasitic growth on the back of the creative types capable of assembling a movie and I'm not interesting in feeding a parasite.
I see the Internet as the death of television as we know it. We'll see more episodic content where the producers don't proudly trumpet the fact that they have no plan at all for the story arc and denigrate their predecessors who did (I'm looking at you Battlestar Galactica), because the networks that screwed with shows in a vain effort to please sponsors and audiences simultaneously will no longer exist. Maybe we can get a spiritual successor to Babylon 5 that doesn't get strangely squashed and stretched by the vagaries of networks, canceling and optioning on a whim.
In short, the Network Age is passing and the Studio Age is upon us. The studio controlled by the creative types will create our entertainment and the distributors that have a stranglehold on the industry will evaporate, supplanted by a vastly more efficient distribution system.
Re:Give me my $4 back then! (Score:3, Insightful)
The value in these channel is not for you, it's for the advertisers.
There's no technological reason... (Score:3, Insightful)
There is no technical reason for lots of things. That's why it is called marketing, in this case, and not technology.
But if it weren't for marketing, a lot of our technological toys would not be economically feasible. I don't know the numbers but I suspect this is true for programming too.
reverse that (Score:4, Insightful)
Re:standalone cable internet, please (Score:2, Insightful)
If you live within the range of CATV internet, surely you live within range of a DSL hookup.
If not, then I suggest you call all 535 representatives and start lobbying for a bill to make DSL mandatory for any customer who requests it (just like phone service is now).
Re:Give me my $4 back then! (Score:3, Insightful)
You do know that MTV/CNN/ESPN are generating the money that pays for many of the lesser-watched channels that you probably enjoy, right...?
Re:Not the programming (Score:3, Insightful)
3 points.
I guess the problem is that majority of programming suck,
What, you're not familiar with Sturgeon's Law [wikipedia.org]?
Critic: "Hey, 90% of science fiction is crap!"
Sturgon: "90% of everything is crap. What's your point?"
Selling individual channels, or smaller bundles, would mean you could probably ensure that what channels you get are those you actually want to watch; but it would also mean that a lot of marginal shows and channels would go out of business.
Channel-by-channel billing would increase the overhead for each channel, thus lowering the profit margin. With a slimmer margin, a channel needs more viewers to stay afloat. As a consequence, a lot of channels that you WANT to watch would go out of business, and we'd be stuck with a bigger share of that 90% and less of that 10%.
To use a slightly wider-sourced aphorism: "There's no accounting for taste." What's golden to you might be crap to me, and the 100 other "viewers" your network would need to stay afloat.
... for the most part I just have to do without until reality catches up with technology and gives me options suited to my lifestyle.
Reality has given you plenty of options -- you can either take the cheap free feed, or you can pay for convenience.
You choose not to, which is perfectly fine. But unless they're money to be made by getting you TV to watch, no body's going to bother.
Big problem with ala carte cable (Score:3, Insightful)
The big problem with allowing individual channel selection is that there are plenty of channels out there that exist because of the way channels have beein funded, selected and supported.
So you want a channel dedicated to science fiction shows, movies, etc. You need to sell it to the cable companies and if a significant number agree to carry it - and pay for it - your job is done. You can get financing based on that and it really doesn't matter what the individual customers think. Some of them will watch and it is a ratings game from there on.
Switch to an ala carte model and this changes quite a bit. First off, any channel that exists today will be immediately taken down unless you have customers signing up for it. Probably within the first couple of months. This isn't like ratings where passive viewing is conidered "viewing" and done by sampling. This will be if you don't opt-in for the channel you don't support it. And without people paying for SciFi channel specifically and intentionally, it and many others will just disappear.
Sounds fair, doesn't it. What about BET? Do you really believe there are enough viewers of the Black Entertainment Network channel to keep it afloat in an ala carte environment? What about the Golf Channel? How about the Food Network? Maybe these cable channels should never have existed in the first place because they don't have a dedicated viewer base. But you can assume that it would not be in Viacom's interest to continue BET when there isn't the revenue to support it - no matter how much Jesse Jackson threatens. SciFi channel is pretty much dead meat as well. Eternal Word TV Network (EWTN) is gone. Same with just about any other channel with a narrow demographic.
Similarly, the rules of the game for starting a new channel will be completely different. Sure, a large media powerhouse might be able to subsidize a new offering for a while to see if it takes off. But nobody else will be able to, because it will take lots of money and a very uncertain future to do it. Lots of risk. Just the sort of thing VC money has been running away from lately.
Absolutely, ala carte channel selection is a solution, but we need to understand what the problem is first. It doesn't solve any of the current problems and just creates a bunch more. It might reduce the average consumer cable bill - in fact it probably will. But it will certainly decrease the number of channels available and make it almost impossible to bring a new (really new) offering to cable networks.
The one possibility would be that this wouldn't affect DirecTV and Dish Network - they could then introduce new channels based on selling it only to their management.
Re:standalone cable internet, please (Score:3, Insightful)
If internet is less expensive to deliver than TV, why oh why won't the cable companies just let me buy what I want and need, without paying for the "basic tier" of trash?
Because they need to plug you into said basic cable system anyway. They don't have the hardware to filter out their "basic" channels from any box with a live cable feed, so they just make it part of the basic connection.
Time Warner, at least, has a "basic" package which is only the free-to-TW channels: the ones they get from the over-the-air broadcasters and things like C-SPAN which are intentionally free to all.
Re:Not the programming (Score:1, Insightful)
Missing the point.
Forcing me to pay for Billy-Joe Bob's new heart (or house) (or car) is akin to making me Billy's slave. I'm working not for my own enrichment, but for him and his needs. It's a human rights violation, pure and simple (theft of labor).
Re:Not the programming (Score:4, Insightful)
... and roads and bridges and the police and firefighters and ...
I have news: its called "society". The only way for you to hoard 100% of your loot and not to ever pay anything for the privilege of participating is to ... stop participating. I hear the hermit cabins up in the woods somewhere in Montana are still going strong. Just make sure that you do not infringe on "personal space" of some other lunatic or he will accuse you of being a "Commie", and he probably has a working (unlike his brain) shotgun.
Oh, that's right, but you wanna participate, reap all the benefits of a society without paying a penny for it .... I get it, Mr. Free Loader.
Yes, yes, like all those who went under in the late 1940s through late 1960s when top tax rates were 90%, no? Oh, wait, was that not the most prosperous time in American history ever?
Re:Not the programming (Score:5, Insightful)
No, its a fee that you pay for the privilege of partaking in society. Bob's new heart will enable him to go and make contributions which then might (or might not) affect you, but will affect someone else, who in turn might affect you etc. The alternative is dog-eat-dog jungle where all (but the richest assholes) who get sick die destitute. Sort of like America today...
Yes the nasty gubmint is giving away houses and cars to every illegal Mexican!
And don't forget all them illegal-alien-friendly channels on basic cable! Oh, wait, its actually a private enterprise that is making you pay for all them cable channels! Paragons of "free market", the agents of the "invisible hand"! Oh dear!
Re:Not the programming (Score:3, Insightful)
IMO these sorts of niche channels will be the first to go under an internet video regime.
Yes, no, maybe.
First question. If I were to go to the "internet" for the Food Channel or GolfTV, who would I pay to watch these "channels"?
In my area the internet channel would come from a) Verizon -- a television, internet, and phone provider or b) Cox Communications -- a television, internet, and phone provider. I cannot get these niche channels over the air. I could get them via satellite. So the only loser or outlier here are the satellite providers.
Second question. Why in the world do people "watch" channels like The Weather Channel, The GolfTV Channel, or the Food Channel (or any other channel or radio) vs using the internet?
Because they can zone out to them with no thought whatsoever. No clicking of a mouse. No lags or jaggies on the video. No buffering. No registration. No downloads. Its just there. Fire and forget.
By and large, television and radio are broadcast mediums. They are not "I want to watch this now" mediums. Sure people can go out of their way and build a MythTV setup or buy a TiVo or rent a DVR from their TV provider, just as they could do with VCRs or audio cassettes for almost 30 years now.
The fact is that is common for people to put their TV on TWC, GTV, HGTV, CNN, or Food Channel or whatever and they do other things and not necessarily watch the content, its just on while they do other things. Or if they do watch the content, they don't pay too much attention to it. The Weather Channel is a very popular channel, yet less than 10% of the content is ever relevant to the individual. The point I'm trying to make is that the fire and forget with no effort is not anywhere near available on the internet today, and if it were to be available tomorrow, the same people would provide the service.
If anything, I would think that the niche channels are the only ones that could survive internet video. The "premium" content is already available for pay or free download today without advertisements. Fewer people are interested in premium content, and even fewer are willing to pay for premium content, but many people would immediately switch television providers if they did not have some of their niche channels.
Re:standalone cable internet, please (Score:3, Insightful)
Because they're largely an unregulated monopoly.
Thats immediately a mod up here on slashdot, but this is simply not the truth.
Television in the US typically has at least 2 or more means of acquiring content. Cable (Cox, Verizon, and ComCast come to mind). In areas where these services are not available there is usually satellite or over the air. Probably less than 1% of the population has fewer than 2 of these options. This is NOT a monopoly.
Same goes with telephones. Why don't people complain that their phone service costs as much or more than internet or cable when telephone service is a 100 year old technology?
Its called a free market, and for most people, their telephone and their television are their most valued leisure activity, or at least its the most common form of leisure activity across most all ethnicities and age groups over 99% of the population. The internet is a thing for younger people or at most 1/2 of the population.
Re:Smaller Bundles (Score:2, Insightful)
Re:Not the programming (Score:1, Insightful)
Re:Not the programming (Score:3, Insightful)
Nice demonstration of how to fail to persuade your readers. Since you failed to give me an alternative definition of "socialism", I have no choice but to stick with mine. I work my ass off - either people get my money in the form of various direct-handouts - $25,000 in just this past year alone. ($15,000 if you exclude legitimate taxes like defense or roads.)
Re:Not the programming (Score:5, Insightful)
And of course you get to be the one making the decision as to what is "benefiting everybody", naturally, no? Like for example the fact that in many places a navy or an army does dick all because the terrain prevents any feasible invasions and at the same time a pandemic of heart-disease causing virus can kill far more then any foreign navy could manage. Or the fact that a society in which medical care costs are under control and removed from consideration of individual businessmen is actually more friendly to small enterprise, which then benefits "everyone". One could go on.
But all of this is besides the point that taxation in a democratic society is by definition legitimate. What the taxes are being spent on is a matter of debate. However one thing is clear: a society which does not take care of its weakest members is pretty much pointless. Because it is the whole point of society that in it individuals can count for help beyond their own means. Otherwise we all might as well head for hermit cabins and shoot each other on sight for "trespassing" (which by the way is many a "libertarian" fantasy).
Re:Not the programming (Score:3, Insightful)
>>>doesn't make enough money to treat it (often mutually reinforcing conditions), she should languish in poor health and/or die.
Everybody dies. If Bob did manage to get a new heart at age 85, he'll probably be dead at age 90 anyway from something else.* I know you probably think that's a cold-hearted observation, but it's simply a fact of life. Mother nature is a bitch and eventually kills all of us. Spending money trying to make citizens live forever is an impossible goal. I see no point in government pursuing impossible goals.
Also, is 85 considered too old to get a new heart? Who decides? Congress? Having visited the DMV, I don't think I want a bunch of bureaucrats making the decision "you're too old, so no heart for you". At least with a private system the choice remains in my hands. More likely I'd just accept fate and hand the money to my grandchildren, rather than waste it.*
*
*Which is yet another way government interferes. They don't want us old folks to pass our money to our children or grandchildren. They'd prefer to tax us at 50% so there's next-to-nothing left. This is not a government that is serving the people, but a government that only serves itself to your wallet.
Re:Not the programming (Score:2, Insightful)
Wow you really have gotten completely lost in the liberal propaganda haven't you!
Or the fact that a society in which medical care costs are under control and removed from consideration of individual businessmen is actually more friendly to small enterprise
This only appears true because comparisons are made with our society and socialist societies. It has nothing do with medical care, its costs or public health. The reason small enterprise is hurt in our system is that they lack the buying power to get into the big group plans, so providing the benefit is expensive on a per capita basis compared to a large enterprise. These big group plans only exist in the first place because some big Government types in Washington managed to rig the tax code such that money toward the benefit did not get applied to payroll taxes.
If the tax loop hole did not exist than there would be no bias in the system in the first place to favor the big enterprise. Your argument is complete B.S. as your proposed solution is more government as answer to a problem that same government created in the first place. You either don't understand the problem or are irrational. Any rational person knows unless its completely impractical to do so you fix problems by addressing the cause not the symptoms when the cause is known. So IgnoramusMaximus you either don't know the cause, have some other agenda, or are a fool; take your pick.
My guess is you are just ignorant, heard "Yes we can!" a few to many times and forgot to think which is what *they* want you to do. Start thinking, start analyzing past the surface and quit voting for sound bites.
Re:Not the programming (Score:3, Insightful)
C'mon, you call it a libertarian example, and then completely contradict that statement in the next sentence by essentially saying it's anarchy instead. No functional government (i.e. no enforcement of property rights or civil rights) means a place is as just as unlike libertarian utopia as the Soviet Union was.
The libertarian fantasy is not anarchy. It's not Mad Max. It's 1789 America, or more precisely, a romanticized version of that with certain revisionist modifications (e.g. no slavery).