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Report: A la Carte Makes No $ense

Discussion in 'General Satellite Discussion' started by Nick, Jul 20, 2006.

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  1. Nick

    Nick Retired, part-time PITA DBSTalk Club

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    The...
    "...new cable channel launches would cease
    if customers were allowed to chose their TV
    offerings from a menu."


    While some argue that pick and choosing cable TV channels is the future of pay TV,
    others say bundling - as proven by its long track record - is still the way to go. In fact,
    new research suggests that a la carte TV has little economic rationale at all.

    According to a recent Kagan Research audio conference, the average cost per channel
    is declining, and new cable channel launches would cease if customers were allowed to
    chose their TV offerings from a menu. Said senior analyst Derek Baine, consumers have
    not embraced the unbundled concept in the past. Plus, viewers would just pick the channels
    they already knew, he said.

    During Kagan's conference, awkwardly named "The Economics of Basic Cable Networks
    and Potential Impact of a la Carte Pricing", the firm detailed how the average retail
    cost per channel in a big basic package declined from 75 cents in 2000 to 71 cents
    last year.

    And consumers' monthly bills increase because the channel bundle also grows
    (from 18 in 1990 to 64 in 2005). The Kagan research indicates consumers spent
    $16.78 for their channel package in 1990 but was dishing as much as$45.40 last
    year - reflecting a profit margin decrease for cable ops of 17 percentage points.

    Supporters of a la carte say since viewers only watch a handful of stations, why
    not just sell them the ones they want? Baine says DirecTV's pre-launch plan
    was to do just that, but the company scrapped the idea when consumers became
    "paralyzed" by so many viewing options.

    Mercy.

    www.SkyReports.com - used with permission
     
  2. jonsnow

    jonsnow AllStar

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    Apr 17, 2006
    OK, then with that logic wouldn't offering a 4th package for around 16.78 dollars a month with channels for 75 cents each make sense? Most la carte supporters would support such a package as an alternative which would include only 22 channels, but at 75 cents each would be a good deal. And no, don't say the family package is the 4th package because it's mostly fta channels and has no attractive content except for foxnews and discovery.
     
  3. FTA Michael

    FTA Michael Hall Of Fame

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    Jul 21, 2002
    I fully agree that too many choices will paralyze a consumer. Sociological studies suggest that customers will buy more if presented with 10 choices than if presented with 100. Even the Canadian DBS companies, home to lots of a la carte choices, added a one-size-fits-all, no-brainer package with a good selection of popular channels.

    My point is that even if some form of a la carte were to be added here, it would be little-used as long as package plans still existed. At least that's my guess. :D
     
  4. BaldEagle

    BaldEagle Legend

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    Jun 19, 2006
    "According to a recent Kagan Research audio conference, the average cost per channel is declining, and new cable channel launches would cease if customers were allowed to chose their TV offerings from a menu. Said senior analyst Derek Baine, consumers have not embraced the unbundled concept in the past. Plus, viewers would just pick the channels they already knew, he said."

    Not a valid reason for not having A la Carte. Offer free previews of the new channels and give consumers a choice if they want to keep them.
     
  5. Geronimo

    Geronimo Native American Potentate DBSTalk Gold Club

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    but what amkes you think that would exist? Sure you can come up with a scenario that pays but is it economically viable for the providers as well.
     
  6. Stewart Vernon

    Stewart Vernon Roving Reporter Staff Member Super Moderator DBSTalk Club

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    Never is this concept more evident than this evening... there were three people (myself included) in the car... and it took more than a half-hour to decide where to go eat dinner.

    If we only had 5 places we could have made a quicker decision as we quickly eliminated a couple of places that we simply didn't want or had eaten recently... but narrowing down from the other dozens of choices was difficult.

    Sometimes choice isn't good... and there's also something to be said for another old idea... That people don't always want what they ask for... sometimes you are better served when you get what you need, and not necessarily what you think you need.
     
  7. Stewart Vernon

    Stewart Vernon Roving Reporter Staff Member Super Moderator DBSTalk Club

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    Excepting of course that unless you got 100% exactly a package that you want, you would still berate it... and then, there would be others who don't want that package that you think is ideal!

    Sometimes I think Dish can't win for losing!
     
  8. wwfmike

    wwfmike Mentor

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    Jul 17, 2006
    I'm all for a la carte. I hardly watch more then 10 different channels but I need a higher package just to get one channel. They could do a good job making a la carte easy for the average consumer. Examples would be:

    Buy MTV, MTV2, VH1, etc for $1 each or get all the music channels for a bundle price. This could work for different bundles like a women's bundle, comedy bundle, etc.

    If they are worried that people wouldn't try new channels then you give them 30 or 60 day free previews and show them what you have to offer. From there, it's the broadcasters responsibility to show good programming to keep a customer instead of knowing they are there in a package. There are too many channels as it is. Most just show paid programming at night.

    My bill would drop from $85 to about $30-45 if they did this.
     
  9. Nick

    Nick Retired, part-time PITA DBSTalk Club

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    The...
    Re: SkyBOX: A la Carte Redux... The V-Chip Did It! (http://www.skyreport.com/view.cfm?ReleaseID=1975)

    Re: A la Carte Makes No $ense (http://www.skyreport.com/view.cfm?ReleaseID=1966)
    __________________________________________________________________

    SKYREPORT: The email from Bob Dixon, DirecTV Customer Service Representative,
    provides the reason a la carte will never work, but it's not specifically due to the reasons
    he provided. It's because providers like DirecTV will make sure it doesn't work by ensuring
    they overcharge for the individual services to the point where their bundles look attractive.
    __________________________________________________________________

     
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