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Intel to Offer A La Cart?


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#301 OFFLINE   unixguru

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Posted 16 February 2013 - 10:34 AM

As posted earlier, this is all based in value. Directv knows that without ESPN, it will be crippled. And ESPN knows it too. So they have the hammer. If you are thinking regulation is the answer, then you have to go to the root -- what ESPN pays the leagues for broadcast rights. You cant just regulate the distributor without regulating the product. Tell me how that would go.

No provider is willing to risk staring down ESPN, so you have what we have.


Consider if it was illegal for anyone to demand total carriage.

TV services would be able to carry ESPN and offer it as a ESPN bundle to those customers that want it. (Which they apparently already do for commercial sites.)

There would be less subscribers. The cost would be obvious. The subscribers and ESPN are then fully engaged in supply and demand balancing the price.

This supply and demand then passes through to the content creators which in this case are leagues, teams, owners, players, etc.

The problem with that is what exactly? Joe Blow isn't going to go into baseball because he can now only make $10 million instead of $20 million. Boo hoo.

Is this not how HBO/SHO/MAX/... work?

And why shouldn't it apply to small-fry like SyFy, History, etc, etc.?

The way it is we don't have a balanced way of setting value. There is little feedback loop.

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#302 OFFLINE   Hoosier205

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Posted 16 February 2013 - 10:49 AM

Whatever you want to call it its tying and illegal in most circumstances.


Something isn't illegal just because you want it to be. It has to actually be...illegal.
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#303 OFFLINE   pdxBeav

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Posted 16 February 2013 - 10:51 AM

To be fair, the market preferred the small dish model and had to buy channels they way they were offered. The initial prices of DBS service was low enough that the bundle was not an issue (especially compared to putting in a C Band dish and descrambler). As the bundle grew in price and content it divided into tier levels.

It was the small dish and relatively small price that drove DBS sales. The ease of buying it all in a package was not a negative ... there was not that much to buy. But the simplicity of the small dish was what drew people in.


I agree. The reason why C-Band died had absolutely zero to do with a la carte. Anyone who suggests otherwise simply doesn't understand or didn't follow the C-Band industry in the '80s and '90s.

#304 OFFLINE   James Long

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Posted 16 February 2013 - 11:16 AM

Agree with the latter statement but evidence that a la carte broke down before the small dish is that bundled appeared as channels went scrambled and you needed to pay for things rather than just find open feeds.

I generally leave out the unscrambled feeds as it is hard to charge a subscription to something available without a control. (DBS can charge subscription on unscrambled channels with the control being the receiver. While one could build or use a third party receiver to view unscrambled content the subscription gives you a receiver that makes the reception trivial. Now there are so few unscrambled DBS channels that they hardly bear mentioning.)

If one is a strict "it isn't a la carte unless the channels are sold individually" believer then any two channels paired leaves the a la carte realm. HBO is no longer a la carte because one gets more than one channel when one adds the service. ESPN is not a la carte if the subscription includes ESPN2 (or any other channel). Personally I am not that strict and go with the industry's use of the term. Channels or related channel groups sold outside of the tier system.

The early departures from per channel a la carte to multiple channel a la carte (small bundles) would still be considered a la carte by the industry ... and by the people who are still buying non-tier multiple channel a la carte via BUD and business offerings.

When things were unscrambled, the variety and large choice were a large driver for people who had BUDs.

I agree ... but non-subscription programming is a category separate from a la carte and tier programming. People who had the means and location to install BUD could pay a one time fee and watch whatever they could find. The only subscription involved was to magazines and guides that helped them find programming. Then the providers realized that normal people were watching and they started protecting their feeds. I was ready to install my BUD when the market changed from free (due to lack of protection) to paid - and ended up not installing the BUD.

A few years later DBS service began and I, like millions of others, were drawn away from the BUD to the simple dish. With no motors, no waiting for the dish to move between channel changes and the ability to watch multiple channels at the same time (on separate receivers).

Small dishes gave the same choice for a price.

Not quite the same choices as a BUD. There are people who still have BUDs because of the additional benefits of having such a dish. There are also people with smaller ku band dish satellite services that are not available via DBS.

But small dishes took off not because they were cheaper than cable but because they have more choices.

That is the cable vs DBS argument, not the a la carte vs tiered argument. DBS being more of a mass consumer based offering followed the cable package pricing. While DBS competed against BUD with operational convenience and dish size they competed against cable with channel selection and availability. And full a la carte was lost along the way as, at the time, it didn't make that much difference.

A la carte on BUD made sense as one did not want to pay for channels on satellites they could not receive. Someone with a simple non-motorized dish could buy the channels on that satellite. DBS didn't have that problem.

I contend that there would be no talk of a la carte at all if we were talking non-sports channels only. They are the ones tilting the price right now.

Sports is the biggest cost but there is some demand for a la carte sale of the higher tier programming. Other than premiums (which are sold a la carte) there are not many channels that are not in Choice ... so that in itself limits the number of channels people can complain about.

People ask for a la carte when they want something they do not have without paying for something they do not want.

#305 OFFLINE   James Long

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Posted 16 February 2013 - 11:22 AM

I agree. The reason why C-Band died had absolutely zero to do with a la carte. Anyone who suggests otherwise simply doesn't understand or didn't follow the C-Band industry in the '80s and '90s.

I would not go that far. There were many reasons why people preferred other ways of getting programming than C-Band. Non a la carte packaging was one of the many reasons to get DBS. My point was that it was not the only reason to get DBS.

#306 OFFLINE   pdxBeav

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Posted 16 February 2013 - 11:47 AM

I would not go that far. There were many reasons why people preferred other ways of getting programming than C-Band. Non a la carte packaging was one of the many reasons to get DBS. My point was that it was not the only reason to get DBS.


Yes, but you could get non-a la carte packages on C-Band too. I hope people aren't thinking that you had to buy a la carte if you had C-Band.

#307 OFFLINE   tonyd79

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Posted 16 February 2013 - 03:29 PM

Consider if it was illegal for anyone to demand total carriage.

TV services would be able to carry ESPN and offer it as a ESPN bundle to those customers that want it. (Which they apparently already do for commercial sites.)

There would be less subscribers. The cost would be obvious. The subscribers and ESPN are then fully engaged in supply and demand balancing the price.

This supply and demand then passes through to the content creators which in this case are leagues, teams, owners, players, etc.

The problem with that is what exactly? Joe Blow isn't going to go into baseball because he can now only make $10 million instead of $20 million. Boo hoo.

Is this not how HBO/SHO/MAX/... work?

And why shouldn't it apply to small-fry like SyFy, History, etc, etc.?

The way it is we don't have a balanced way of setting value. There is little feedback loop.


Wait. Illegal on making a deal means you don't have an open market. Thought you wanted one. You keep claiming the market would decide the model now you want to outlaw one aspect of the model?
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#308 OFFLINE   tonyd79

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Posted 16 February 2013 - 03:39 PM

I generally leave out the unscrambled feeds as it is hard to charge a subscription to something available without a control. (DBS can charge subscription on unscrambled channels with the control being the receiver. While one could build or use a third party receiver to view unscrambled content the subscription gives you a receiver that makes the reception trivial. Now there are so few unscrambled DBS channels that they hardly bear mentioning.)

If one is a strict "it isn't a la carte unless the channels are sold individually" believer then any two channels paired leaves the a la carte realm. HBO is no longer a la carte because one gets more than one channel when one adds the service. ESPN is not a la carte if the subscription includes ESPN2 (or any other channel). Personally I am not that strict and go with the industry's use of the term. Channels or related channel groups sold outside of the tier system.

The early departures from per channel a la carte to multiple channel a la carte (small bundles) would still be considered a la carte by the industry ... and by the people who are still buying non-tier multiple channel a la carte via BUD and business offerings.

I agree ... but non-subscription programming is a category separate from a la carte and tier programming. People who had the means and location to install BUD could pay a one time fee and watch whatever they could find. The only subscription involved was to magazines and guides that helped them find programming. Then the providers realized that normal people were watching and they started protecting their feeds. I was ready to install my BUD when the market changed from free (due to lack of protection) to paid - and ended up not installing the BUD.

A few years later DBS service began and I, like millions of others, were drawn away from the BUD to the simple dish. With no motors, no waiting for the dish to move between channel changes and the ability to watch multiple channels at the same time (on separate receivers).

Not quite the same choices as a BUD. There are people who still have BUDs because of the additional benefits of having such a dish. There are also people with smaller ku band dish satellite services that are not available via DBS.

That is the cable vs DBS argument, not the a la carte vs tiered argument. DBS being more of a mass consumer based offering followed the cable package pricing. While DBS competed against BUD with operational convenience and dish size they competed against cable with channel selection and availability. And full a la carte was lost along the way as, at the time, it didn't make that much difference.

A la carte on BUD made sense as one did not want to pay for channels on satellites they could not receive. Someone with a simple non-motorized dish could buy the channels on that satellite. DBS didn't have that problem.

Sports is the biggest cost but there is some demand for a la carte sale of the higher tier programming. Other than premiums (which are sold a la carte) there are not many channels that are not in Choice ... so that in itself limits the number of channels people can complain about.

People ask for a la carte when they want something they do not have without paying for something they do not want.


Hard to answer point by point on an iPhone.

Yes. I brought the cable difference in because the point I was driving was that early BUD and early DBS were about amounts of programming available. The underlying point being that Americans WANT the big packages. They like the available channels to be available and they like combos.

We can battle the exact definition of a la carte but bundle of like but unrelated channels aren't a la carte. Those are tiers. And BUD went more and more toward the bundles.

Other than the premium movie channels I am not seeing any real demand for a la carte outside sports. If you didn't have espn and RSNs on systems, the cost to the consumer would be really under the radar. People are only really starting o gripe and most of that is from the sports cost.

Ironically, sports was a driving force for both BUD and DBS.

Btw. I include the unscrambled because when BUD went to pay channels, the game for them changed. It went from pretty much free big bundle to having to make choices.
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#309 OFFLINE   Satelliteracer

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Posted 16 February 2013 - 05:45 PM

Of course the players will play for less. What could they do for a living except football? they might make $100,000 a year somewhere else.


Well, they are guaranteed their money in these television contracts for some leagues for the next 15 years. The dollars aren't going down, they're only going to go up there. Live sports is what advertisers want and the leverage is held by the leagues. I've been involved in the sports space in one for or another for 20 years and I don't see it going backward anytime soon.

Just my opinion, but the data shows that's not going to change anytime soon.
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#310 OFFLINE   James Long

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Posted 16 February 2013 - 11:17 PM

Yes. I brought the cable difference in because the point I was driving was that early BUD and early DBS were about amounts of programming available. The underlying point being that Americans WANT the big packages. They like the available channels to be available and they like combos.

The early BUD users did not have to worry about packages as nothing was scrambled. They cared about content and the BUD delivered. Even after the commercial cable channels started protecting their feeds (scrambling) and selling them to home satellite viewers BUD owners had the benefit of wild feeds. Over time those have become harder to find unscrambled. Programmers are protecting their content and their profits.

Early DBS was a decade or two behind BUD and was structured more like a cable service. BUD was a buy your dish and receiver then go find some content type of service ... the content was not included with the dish. While dish sellers could also resell content (once content was sold) the dish was separate from the content. With DBS the dish and receiver was (and still is) tied to the content.

We can battle the exact definition of a la carte but bundle of like but unrelated channels aren't a la carte. Those are tiers.

Tiers build on each other. One must have A to get B. One must have A and B to get C. A la carte allows customers to buy channels/content without all the intervening required content.

DirecTV considers their premium and adult channels to be a la carte. Even though their premium packages are several channels it fits because one does not need to buy levels A, B and C to get the level D "premium" programming.

Btw. I include the unscrambled because when BUD went to pay channels, the game for them changed. It went from pretty much free big bundle to having to make choices.

It was certainly a benefit to having a BUD ... but would you consider everything unscrambled as the lowest programming tier or everything unscrambled as a la carte individual channels since no one had to pay for another channel to get an unscrambled channel?

#311 OFFLINE   Diana C

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Posted 17 February 2013 - 12:31 AM

I made a point a few pages back that i will repeat here and then I'm done with this subject for a while...

Let's take as an example, DirecTV's Premier tier...that costs about $125/month. How much of that is programming cost? Answer: about $40 (not including the premium movie channels, which would probably remain unchanged). Even if you cut that in half by eliminating unwanted channels, you bill goes down from $125 to $105. And that's optimistic, since a channel's unbundled price would likely be significantly higher than its bundled price.

While $20 per month is not nothing, it is not the sort of savings usually promoted by advocates of al a carte pricing. The savings on smaller groups of channels are smaller. So unless you really could get by with only 4 or 5 channels, I don't see how you save anything more than single digit amounts per month.

This is, I suspect, why no one in the industry has pushed al a carte very hard...even if a MCO managed to negotiate it, it wouldn't give them a price advantage over the competitor with nothing but tiers of bundled channels.

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#312 OFFLINE   tonyd79

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Posted 17 February 2013 - 07:40 AM

I made a point a few pages back that i will repeat here and then I'm done with this subject for a while...

Let's take as an example, DirecTV's Premier tier...that costs about $125/month. How much of that is programming cost? Answer: about $40 (not including the premium movie channels, which would probably remain unchanged). Even if you cut that in half by eliminating unwanted channels, you bill goes down from $125 to $105. And that's optimistic, since a channel's unbundled price would likely be significantly higher than its bundled price.

While $20 per month is not nothing, it is not the sort of savings usually promoted by advocates of al a carte pricing. The savings on smaller groups of channels are smaller. So unless you really could get by with only 4 or 5 channels, I don't see how you save anything more than single digit amounts per month.

This is, I suspect, why no one in the industry has pushed al a carte very hard...even if a MCO managed to negotiate it, it wouldn't give them a price advantage over the competitor with nothing but tiers of bundled channels.


Will you stop making sense and bringing facts to the table?
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#313 OFFLINE   unixguru

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Posted 17 February 2013 - 07:44 AM


Whatever you want to call it its tying and illegal in most circumstances.

Something isn't illegal just because you want it to be. It has to actually be...illegal.


Obviously.

http://en.wikipedia....ying_(commerce):

Tying (informally, product tying) is the practice of selling one product or service as a mandatory addition to the purchase of a different product or service.


Some kinds of tying, especially by contract, have historically been regarded as anti-competitive practices.


The company doing this bundling may have a significantly large market share so that it may impose the tie on consumers, despite the forces of market competition.


In the United States, most states have laws against tying, which are enforced by state governments. In addition, the U.S. Department of Justice enforces federal laws against tying through its Antitrust Division.


Don't let the facts get in the way.

Example: To get History 2 requires that I subscribe to Xtra which requires I pay for ~28 channels at a price differential of $16. History 2 doesn't cost anywhere close to $16. That's $192/year. I await the facts on why this isn't tying.

Consider if it was illegal for anyone to demand total carriage.

Wait. Illegal on making a deal means you don't have an open market. Thought you wanted one. You keep claiming the market would decide the model now you want to outlaw one aspect of the model?


Business fantasy. Making a deal must make it legal. The blinders must be very tight. Try googling antitrust.

Preventing such deals is exactly what enhances competition and consumer protection and enables the free market.

#314 OFFLINE   Darcaine

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Posted 17 February 2013 - 07:45 AM

That's the smoke and mirrors the system leverages. By themselves nothing is a monopoly. Taken as a whole, it is a monopoly.


I believe the word you are looking for is Oligopoly .

An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists).[citation needed] A general lack of competition can lead to higher costs for consumers. Because there are few sellers, each oligopolist is likely to be aware of the actions of the others. The decisions of one firm influence, and are influenced by, the decisions of other firms. Strategic planning by oligopolists needs to take into account the likely responses of the other market participants.


I do believe change is coming to the tv industry faster than some want to believe (not claiming to know what that change will look like though). As Charlie Ergen said the other day..."the internet is a la carte" and cable will have to compete with that.

We're still for a la carte, because the internet is a la carte today and we know we have to compete there. It's going to go there slowly, would be my guess. Having said that, we can't change it (when looking at channel bundles). It's pretty easy to steal on the internet. I remember being in India watching a movie before it even came out in America -- I was just testing it, you know. [Chuckles.]


Edited by Darcaine, 17 February 2013 - 08:15 AM.


#315 OFFLINE   Diana C

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Posted 17 February 2013 - 08:21 AM

Will you stop making sense and bringing facts to the table?


Sorry, I guess it is a girl thing. :)

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#316 OFFLINE   Satelliteracer

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Posted 17 February 2013 - 09:40 AM

Sorry, I guess it is a girl thing. :)


+1 Well done, by the way
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#317 OFFLINE   tonyd79

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Posted 17 February 2013 - 10:26 AM

Sorry, I guess it is a girl thing. :)


No. It is being in the real world thing.
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#318 OFFLINE   pdxBeav

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Posted 17 February 2013 - 10:52 AM

With all the arguments on all sides of the issue being debated, we can all agree that programming costs are DirecTV's single largest expense and those costs are going up at a higher rate than what they pass on to the customer. This can't continue forever.

Edited by pdxBeav, 17 February 2013 - 12:33 PM.


#319 OFFLINE   unixguru

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Posted 17 February 2013 - 11:54 AM

Sources:
http://www.att.com/C...nnel_Lineup.pdf
http://www.satellite...p-Grandfathered

First I'd heard of Family package. I suppose ESPN and the like write the contracts relative to "any advertised package".

The first attachment is mostly derived from those two sources. I did this in Apple Numbers and exported Excel format so there may be issues. The second attachment has the channels that my wife and I have watched in the last year (as far as we can remember).

If you like movies and not much else then you're screwed. Entertainment ($55) + premiums ($57) = $112. Premier is $125. So switching down would save us a whole $13 or 10%.

I find the Entertainment->Choice ($10), Choice->Xtra ($6), and Xtra->Ultimate ($7) a joke. It costs me $16 to get 4 channels, Science/DIY/H2/NatGeoWild.

Internet PPV plus delayed (a few seasons) premium channel series via internet is a huge savings compared to TV services. That leaves Entertainment package at $55. Compared to just OTA, what I see there isn't worth that amount by a long shot. I will be a cord cutter when my contract is up.

It's easy to see why cord cutting is growing. We're on the verge of a big player (Intel, Apple) doing something that will blow the dam. Then TV services will have to do something radical.

Attached Files



#320 OFFLINE   unixguru

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Posted 17 February 2013 - 12:22 PM

I believe the word you are looking for is Oligopoly


Thank you!

Here is the non-mobile link: http://en.wikipedia.org/wiki/Oligopoly




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