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Rate increases coming, could be worse


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133 replies to this topic

#51 OFFLINE   lokar

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Posted 13 September 2012 - 02:26 PM

You would be surprised. Take SyFy...

SyFy collects an average of $0.21 per subscriber (slightly higher than the industry average of 20 cents), and is currently available in 98 million homes. That's roughly $20 million dollars per month. Meanwhile, SyFy gets about 1.2 million viewers. To break even, if offered a la carte, and purchased only by people that watch it, they would need to collect over $16 per month.

If we use that value as an average, your "package" of 9 cable channels and 4 locals would cost you well over $200 per month.


Interesting numbers but I think you should say "maintain their current subscriber income" instead of "break even" since we don't know what their profits are and they are getting money from commercials as well. If they have to lower their price to remain competitive and maybe produce a few less Sharktopus movies per year to stay within their budget, I am OK with that.

HBO shows that you can be a la carte and successful. All I know is a world where sports networks pay escalating sums of money for rights fees that they expect MSOs to then take out of everyone's pockets is eventually doomed to failure. I heard on the news that the number of cable/satellite subscribers continues to drop and while the percentage is still high, I am sure it will continue to drop as rates keep increasing. I think D* is realizing this too as they are becoming slow to add new sports nets like the Pac-12 and the new TWC Lakers channel. Sports at least need to be a la carted immediately and I say this as a sports fan. If ESPN is going to charge HBO like subscriber fees, then they need to be a la carted the same way.

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#52 OFFLINE   JoeTheDragon

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Posted 13 September 2012 - 02:38 PM

maybe not full la carte but at the very lest we can move sports to a HBO like add on pack.

Sports is a big part of the costs and maybe my makeing that a add on you can pick people who are willing to pay for TV but not all the big sports channels that they do not want to have.

Also maybe even have some sports only packs + TBS / TNT and the CNBC / MSNBC / FX / trutv / WGN / other main channels that some time show big sports events on them.
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#53 OFFLINE   Satelliteracer

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Posted 13 September 2012 - 07:16 PM

maybe not full la carte but at the very lest we can move sports to a HBO like add on pack.

Sports is a big part of the costs and maybe my makeing that a add on you can pick people who are willing to pay for TV but not all the big sports channels that they do not want to have.

.


Easy to say, very difficult to do.
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#54 OFFLINE   tonyd79

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Posted 13 September 2012 - 07:51 PM

Interesting numbers but I think you should say "maintain their current subscriber income" instead of "break even" since we don't know what their profits are and they are getting money from commercials as well. If they have to lower their price to remain competitive and maybe produce a few less Sharktopus movies per year to stay within their budget, I am OK with that.


Actually, they do get money from commercials, so with fewer eyeballs per month, their income there diminishes as well. They can charge more per eyeball as they are self-choosing customers but if their potential audience drops to a fraction, so does their ad revenue. And don't expect the ratings to mean much. If I watch one show on TVLand because I already get it, unless it is my favorite show, I would not pay a whole month for that one show. Viewership would drop.

As for income versus break even. Unless a third party who viewers pay (like now, which does what we have now with the added expense of tracking, billing, ordering, troubleshooting a more complex system) does the distribution, the channels costs go UP because they have to provide the delivery mechanism themselves or via a third party. So, saying break even makes the price go even higher.

Only the most popular and must have channels work a la carte.

You use HBO. What is the price of HBO? Use it for your model. It is not the pennies you pay for channels like the Viacom channels.

There is not a scenario that a la carte is cheaper on a per unit basis. It would only work for the very select few that really don't watch much tv.
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#55 OFFLINE   Satelliteracer

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Posted 13 September 2012 - 11:25 PM

maybe not full la carte but at the very lest we can move sports to a HBO like add on pack.

Sports is a big part of the costs and maybe my makeing that a add on you can pick people who are willing to pay for TV but not all the big sports channels that they do not want to have.


That's exactly what Directv is trying to do

http://www.insidesoc...-forward-d.html

Of course, that brings out a number of customers that don't care about the cost and want it no matter what. Puts Directv and every other distributor in a tough spot.
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#56 OFFLINE   Satelliteracer

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Posted 13 September 2012 - 11:29 PM

Sooner or later all sports will have to be in its own premium package, like HBO and Showtime.


We will agree to disagree on this. The sports channels are a product of many things, including huge salaries for players, etc. They need eyeballs for ad revenue and subscribers to drive ratings for that ad revenue. On the flip side, they also need high subscription fees to pay for the rights fees that pay for the salaries, etc.

Many distributors right now are trying to put Pac 12 into a "premium" package, or a sports tier, same with Longhorn Network, etc. You see what happens as a result. No matter what, someone isn't going to be happy. The sports fan that feels all sports should be included and costs be damned, or the non sports fan that could not care less about sports and has to bear huge portion of their monthly bill to support the very sports they do not want. Where's the middle ground?
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#57 OFFLINE   TheRatPatrol

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Posted 14 September 2012 - 06:02 AM

We will agree to disagree on this. The sports channels are a product of many things, including huge salaries for players, etc. They need eyeballs for ad revenue and subscribers to drive ratings for that ad revenue. On the flip side, they also need high subscription fees to pay for the rights fees that pay for the salaries, etc.

Many distributors right now are trying to put Pac 12 into a "premium" package, or a sports tier, same with Longhorn Network, etc. You see what happens as a result. No matter what, someone isn't going to be happy. The sports fan that feels all sports should be included and costs be damned, or the non sports fan that could not care less about sports and has to bear huge portion of their monthly bill to support the very sports they do not want. Where's the middle ground?

But what if all providers stood up to these high priced sports channels and said enough is enough, sports needs its own package, wouldn't that help the cause? Movie stars have high salaries too, yet movie channels can be put together in their own package.

The true sports fans are willing to pay to get their sports. I know I would pay more to get the Pac 12 Network, as well as many others on here.

Edited by TheRatPatrol, 14 September 2012 - 06:13 AM.


#58 OFFLINE   Carl Spock

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Posted 14 September 2012 - 06:37 AM

maybe not full la carte but at the very lest we can move sports to a HBO like add on pack.


That's exactly what Directv is trying to do


Sooner or later all sports will have to be in its own premium package, like HBO and Showtime.


We will agree to disagree on this.


Wait a minute, SR. Maybe I need a third cup of coffee but aren't you arguing for two completely contradictory positions? What is it? Should sports channels like the PAC 12 be a separate tiered package? That's what the article you linked to seems to say DirecTV's position is. Or are they part of the base package? You seem to be telling TheRatPatrol that must be the case.

Please tell me what I'm missing here.
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#59 OFFLINE   JoeTheDragon

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Posted 14 September 2012 - 07:41 AM

We will agree to disagree on this. The sports channels are a product of many things, including huge salaries for players, etc. They need eyeballs for ad revenue and subscribers to drive ratings for that ad revenue. On the flip side, they also need high subscription fees to pay for the rights fees that pay for the salaries, etc.

Many distributors right now are trying to put Pac 12 into a "premium" package, or a sports tier, same with Longhorn Network, etc. You see what happens as a result. No matter what, someone isn't going to be happy. The sports fan that feels all sports should be included and costs be damned, or the non sports fan that could not care less about sports and has to bear huge portion of their monthly bill to support the very sports they do not want. Where's the middle ground?

well it's sports pack out of market on the distributors.

Big ten on Directv is only RSN like sports channel that is not in a sports pack on a wide base.
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#60 OFFLINE   JoeTheDragon

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Posted 14 September 2012 - 07:48 AM

Also there have been hints of a "NEW" sports pack / tear dating back to when VS was taken down.

Now maybe we need a choice ultimate with sports channels and not Movie channel and encore.
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#61 OFFLINE   kick4fun

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Posted 14 September 2012 - 07:48 AM

But what if all providers stood up to these high priced sports channels and said enough is enough, sports needs its own package, wouldn't that help the cause? Movie stars have high salaries too, yet movie channels can be put together in their own package.

The true sports fans are willing to pay to get their sports. I know I would pay more to get the Pac 12 Network, as well as many others on here.


I nominate you the President!

#62 OFFLINE   FLWingNut

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Posted 14 September 2012 - 09:57 AM

Not gonna happen. The first provider to drop ESPN will be committing suicide. Sports drives the TV bus.

#63 OFFLINE   joshjr

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Posted 14 September 2012 - 10:36 AM

So few channels are worth a spit… I say save bandwidth and let 80% of the crap just go away.

As more and more people pull the plug and go online with streaming we get closer and closer to A la carte by way of Net Flix, Hulu, Apple TV etc. Sure the cost will shift to pay for Internet service but I think we’ll still be ahead.

I do believe A la carte is the future – just not through the typical means… Especially not with DirecTV. I personally don’t see much of future for the current model. At the current rate of increases the average bill will be $200 and there will be even more channels that few people watch but are forced to pay for.

I can buy a lot of programming from Amazon, Hulu, NetFlix etc for $200 a month.

I hope DirecTV is preparing for the likely defection of customers who don’t put such high value on crap programming….


I think this is a pretty narrow minded view. One reason I choose DirecTV is that I want a provider that covers all of my needs. DirecTV is the only option that does that. I have a DVR that records 5 shows at once (cant get anywhere else) I have NFL Sunday Ticket (cant get anywhere else) I get all the channels I want, etc. Why would I want to go to the internet and sign up for multiple services to watch the shows? Why would I want to get rid of my DVR that is more convenient for me then watching stuff on the internet? While I agree the internet is an option it is not for everyone. I for one will NOT be leaving DirecTV anytime soon.

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#64 OFFLINE   joshjr

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Posted 14 September 2012 - 10:39 AM

I just bought a Tivo Premiere XL for $315 with lifetime service and when my contract is up I am cancelling DTV. I find too many of the channels are showing reality junk instead of the programing they use to have. Some times I go thru the guide twice to see if I could find a show to watch. The channels are becoming almost the same instead of different. The price goes up and the value goes down. The Tivo is so much better then my HR20-200. It is super fast changing channels ,the ota brings in all sub channels that the HR20 cannot get. The recordings never breaks up like the HR20. Every five minutes the picture on the HR20 breaks up when watching a recording. There are no audio drop outs with the Tivo compared to the HR20. The HR20 is a piece of junk compared to the Tivo. I am not going to keep paying $90 a month to watch reality junk.


Okay so you are comparing a newer TiVo product to DirecTV's oldest HD DVR? That is like comparing the HR34 to the TiVo 10-250. Its just not fair or right. If you had a HR24 and were saying the same things then I might say okay I see where you are coming from. With that old of a HD DVR the box itself might be part of your issues or you could need new cabling. Good luck with your decision. I for one think its an uneducated decision but I do hope it pays off for you.

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#65 OFFLINE   joshjr

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Posted 14 September 2012 - 10:42 AM

I’d gladly pay Showtime $20 a month and stop paying DirecTV the $14 a month I pay if they’d just steam it directly to me and skip DirecTV in the middle. I don’t need to pay for ABC, CBS, NBC or FOX programming – I have an antenna. I’d also pay more directly to the content creators for channels like History Channel, Comedy Channel, AMC and a few others… All at the cost of worthless channels like fake music channels like MTV and VH1. When was the last time you saw something related to music on MTV anyway?

Live sporting events are DirecTV’s only hope if you ask me… But I can’t even get PAC12 network from them (sadly I need Comcast or Dish Network for that!). Maybe an online pay-per-view kind of thing would work.

I already pay for the Internet infrastructure why should I pay DirecTV to duplicate what could be done on the Internet?

Let's face it - pay-tv costs are out of control and the pay-tv industry is in serious trouble if it doesn't change.


Thats great, so far if I understand you correctly you will probably have a Netflix account that isnt free, a Hulu account that isnt free, may want some kind of a DVR setup that wont be free at least up front and your talking sports PPV's online. Good luck with that. I will stick with the company that already has all that together and removes the headache from me.

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#66 OFFLINE   joshjr

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Posted 14 September 2012 - 10:46 AM

In theory, sounds great. The reality is much different. The internet can't deliver four simultaneous HD streams to a house let alone the entire neighborhood, etc. Not yet, it will be quite while before that happens and a VERY long time when it happens in rural America. The speed isn't there right now for that much disparity.

You mention AMC, and other channels like that. Remember that right now you may be paying a small amount for those channels as part of your overall bill, but now look at their ratings and parse them out over those costs. In other words, to keep those channels on an a la carte basis rather than bundled today, a customer would be paying 5 to 20 times what they pay today on a per channel basis. Now, that may lower your overall bill, but you'll be paying far more on a per channel basis for far fewer options. That's exactly what is happening in Canada right now.

http://business.fina...-but-at-a-cost/


When AMC and those others don't get that support from subscribers, they can't sustain and they go away.

I like choice, I like the fact I pay about $3 per day for 200+ channels 24/7/365 that gives me entertainment, news, sports, drama, etc. My Starbucks fix gives me joy for 10 minutes and costs more. I pay more than that for my wireless service. It all comes down to what people want, but at $3 a day considering what you get...there is tremendous value.


Not to mention how is a new channel ever gonna launch? Hope they can afford for free for a year and that people decide they want to sub.

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#67 OFFLINE   joshjr

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Posted 14 September 2012 - 10:48 AM

I agree that right now the Internet can't just replace the old model but it sure seems headed that way and they more the cost goes up the quicker I think it will happen. It could for me - at least come pretty darn close to replacing DirecTV!

Truth is, in my selfish world, I don't need 4 simultaneous streams and the only live TV I need is some basic sports... Even those sports could be streamed (and are if you're a Comcast subscriber).

I'd be happy to pay 5 to 20 times for the channels I want and considering the few channels I want I'll still come out way ahead. If the channels I want can't convince enough people to watch and to stay in business then so be it. Showtime and HBO don't seem to have any trouble staying in business and they have some of the best programming available. Aren't Showtime and HBO 'a la carte' today and since the beginning?

I'm all for choice and channel selection but I'll have to disagree on the 'tremendous value'. I, and I think many others, watch very few of the 200+ channels but we all have to pay for them.

Remember this is TV not healthcare or Police protection. TV isn't all that important and as the cost continues to explode many people are just going to say 'screw it'.


So a few channels are able to get away with it and you think its practical for all channels to do this? I think not.

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#68 OFFLINE   lokar

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Posted 14 September 2012 - 10:59 AM

You use HBO. What is the price of HBO? Use it for your model. It is not the pennies you pay for channels like the Viacom channels.

There is not a scenario that a la carte is cheaper on a per unit basis. It would only work for the very select few that really don't watch much tv.


My point in bringing up HBO is that they are successful and from what I have seen in charts on here only charge $1 or so a month more than ESPN per subscriber to MSOs, yet HBO is its own tier and ESPN is forced on everyone. I fully admit that a lot of smaller channels would probably go out of business under a la carte, but I think there are way too many channels anyway and most all of them have gone to reality crap so it is no big loss. I think a 200 channel world sounds good in theory but has turned out a lot of quantity with little quality in practice.

I would also like to see DirecTV or some MSO start signing contracts so that if a channel changes its focus i.e. History showing Pawn Stars 24 hours a day that that channel would be in breach of its contract and could be removed immediately.

#69 OFFLINE   Diana C

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Posted 14 September 2012 - 11:31 AM

Interesting numbers but I think you should say "maintain their current subscriber income" instead of "break even" since we don't know what their profits are and they are getting money from commercials as well. If they have to lower their price to remain competitive and maybe produce a few less Sharktopus movies per year to stay within their budget, I am OK with that.

HBO shows that you can be a la carte and successful. All I know is a world where sports networks pay escalating sums of money for rights fees that they expect MSOs to then take out of everyone's pockets is eventually doomed to failure. I heard on the news that the number of cable/satellite subscribers continues to drop and while the percentage is still high, I am sure it will continue to drop as rates keep increasing. I think D* is realizing this too as they are becoming slow to add new sports nets like the Pac-12 and the new TWC Lakers channel. Sports at least need to be a la carted immediately and I say this as a sports fan. If ESPN is going to charge HBO like subscriber fees, then they need to be a la carted the same way.


I of course meant "break even" on top line revenue, not bottom line profits. But since you brought up advertising revenue, if SyFy were suddenly delivered to only 1.2 million homes instead of 98 million, their advertising value would be diminished. While current ad rates are based upon viewer ratings, some shows draw more than the average share, other less. In an a la carte scenario NO show can draw more than the number of subscribers. In other words, that 1.2 million includes occasional viewers that watch SyFy now because it is there, but wouldn't want to pay $16 for it.

Bottom line, a la carte pricing is a sure fire way to drive at least half, perhaps as much as three quarters, of all currently operating channels into oblivion.

Here are the top 20 cable channels for 2011, based upon total primetime viewers:

Channel                  Millions of viewers
1. USA                   3.165
2. Disney Channel        2.647
3. ESPN                  2.342
4. TNT                   2.232
5. History               1.987
6. Fox News              1.883
7. TBS                   1.614 
8. A&E                   1.561
9. FX                    1.532 
10. ABC Family           1.462 
11. Nick At Nite         1.344 
12. SyFy                 1.330
13. Discovery            1.288
14. Adult Swim           1.237
15. HGTV                 1.205
16. MTV                  1.189
17. AMC                  1.182
18. Food Network         1.177
19. Comedy Central       1.006
20. Bravo                0.926

If you favorite channel is not on this list, it might not survive in an a la carte world.

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#70 OFFLINE   MarkG21

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Posted 14 September 2012 - 12:28 PM

If you really want a la carte pricing (And NOT a sports fan), why not just ditch cable/sat and get an ota antenna for local channels and news and going the iTunes/amazon route and buy your shows individually?

Am I missing something here?? Is it more complex than that? I can see if you don't have high speed Internet in your area. What other road blocks are there?


For me, I like direct tv's model. I'm a huge sports fan. Watch espn constantly. (thank you everyone for subsidizing espn and all the other sports channels for me).

#71 OFFLINE   tonyd79

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Posted 14 September 2012 - 12:58 PM

If you really want a la carte pricing (And NOT a sports fan), why not just ditch cable/sat and get an ota antenna for local channels and news and going the iTunes/amazon route and buy your shows individually?

Am I missing something here?? Is it more complex than that? I can see if you don't have high speed Internet in your area. What other road blocks are there?

For me, I like direct tv's model. I'm a huge sports fan. Watch espn constantly. (thank you everyone for subsidizing espn and all the other sports channels for me).


There is a lot of programming not available via streaming yet. Or costs a lot more that way. Or you have to wait for it.
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#72 OFFLINE   Mike Greer

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Posted 14 September 2012 - 01:15 PM

I think this is a pretty narrow minded view. One reason I choose DirecTV is that I want a provider that covers all of my needs. DirecTV is the only option that does that. I have a DVR that records 5 shows at once (cant get anywhere else) I have NFL Sunday Ticket (cant get anywhere else) I get all the channels I want, etc. Why would I want to go to the internet and sign up for multiple services to watch the shows? Why would I want to get rid of my DVR that is more convenient for me then watching stuff on the internet? While I agree the internet is an option it is not for everyone. I for one will NOT be leaving DirecTV anytime soon.


I'd agree if not for the ever increasing costs. There is a price point where it just isn't worth what you get. You're obviously willing to pay more and that's great. I just don't put some much value in a few TV channels...

#73 OFFLINE   Mike Greer

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Posted 14 September 2012 - 01:16 PM

Thats great, so far if I understand you correctly you will probably have a Netflix account that isnt free, a Hulu account that isnt free, may want some kind of a DVR setup that wont be free at least up front and your talking sports PPV's online. Good luck with that. I will stick with the company that already has all that together and removes the headache from me.


Again, I do agree - it just comes down to price. Obvisouly, at least for now, DirecTV is easier.. But for many of us it means paying $25+ per month per channel considering how few channels we watch.

Your milage may vary!

#74 OFFLINE   Mike Greer

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Posted 14 September 2012 - 01:17 PM

So a few channels are able to get away with it and you think its practical for all channels to do this? I think not.


I don't think it is practical for all channels - obviously the bulk of channels can't/wouldn't survive. I'm just saying I'm good with that. Watched any MTV lately? Me either!:lol:

#75 OFFLINE   Mike Greer

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Posted 14 September 2012 - 01:19 PM

Here are the top 20 cable channels for 2011, based upon total primetime viewers:

Channel                  Millions of viewers
1. USA                   3.165
2. Disney Channel        2.647
3. ESPN                  2.342
4. TNT                   2.232
5. History               1.987
6. Fox News              1.883
7. TBS                   1.614 
8. A&E                   1.561
9. FX                    1.532 
10. ABC Family           1.462 
11. Nick At Nite         1.344 
12. SyFy                 1.330
13. Discovery            1.288
14. Adult Swim           1.237
15. HGTV                 1.205
16. MTV                  1.189
17. AMC                  1.182
18. Food Network         1.177
19. Comedy Central       1.006
20. Bravo                0.926

If you favorite channel is not on this list, it might not survive in an a la carte world.


Ok, I'll bite - keep these channels and get rid of the rest!:lol:




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