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Guest Message by DevFuse

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Unbundling in the Air?


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125 replies to this topic

#121 OFFLINE   unixguru

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Posted 19 March 2013 - 08:27 AM

As it happens, my company's client list includes both several of the content providers mentioned as well as a couple of multi-channel operators.


It's surprising that you have the views you do. :rolleyes:

The revenue earned from advertising time on virtually any non-sports channel has barely kept up with inflation, let alone the rise in operating costs. This is why channels are more and more turning to subscriber fees. This fall off in advertising revenue is caused by two factors: the increase in channels (which all compete for the same ad dollars by delivering ever more narrow demographics)


Seems there is evidence that their costs are out of control. I can see why it would be hard to keep up with 20% annual increases in "manufactured" costs.

Increased channels is a self-inflicted wound. You know it is getting bad when they replay a show on another channel. They created more channels purely so they could sell more ads. The amount of programming hasn't increased. They are just replaying stuff even more. Now you're saying that the ad revenue has dropped. Imagine that. So in the end they added more cost (in infrastructure, not content) and didn't get any return. These business people couldn't find their ...

But wait... the consumer will bail them out!

Advertisers have been tracking DVR use for years and have a very good sense of how many people skip commercials. They build this "discount" into what they are willing to pay.


Just like I said... the end of skipping is coming.

Do you know what a MCO's biggest headache is? Tracking subscriber counts - knowing how many subscribers have access to which channels. The more "tiers" and packages an operator has, the more difficult the problem. Managing and tracking multiple tiers, grandfathered packages, and the monthly changes subscribers make, not to mention blackouts, special promotions and PPV purchases, is a huge headache and a major expense.


Get a new IT department. And stop playing games with promotions - no excuse for self-inflicted wounds.

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#122 OFFLINE   Cyber36

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Posted 19 March 2013 - 08:57 AM

I believe it is the beginning of the end of tv as we know it........

#123 OFFLINE   tonyd79

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Posted 19 March 2013 - 09:06 AM

If ESPN was unbundled they would get what the market will bear. I know we've gone in circles on this issue, but without bundling ESPN would set their price to maximize profits. It really is that simple.


An right now they have the upper hand and they know it. They can pretty much ask for anything they want and they get it.

It is not that the cable/satellite systems WANT espn on every tier. It is espn demanding that now and getting it because not having espn is suicide to cable and satellite systems.

At least right now. If Fox can make a dent, that may change but espn is long at this moment.

The fallacy is that unbundling will change the dynamic. It won't because the option to put any channel in its own package or on a special tier already exists. The MARKET has driven the current status of espn. A la carte champions act as if it is artificial to have bundles. It is not. The MARKET made them. That includes everyone in the chain including the customer.

To use your words, they are already getting what the market will bear.
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#124 OFFLINE   Diana C

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Posted 19 March 2013 - 09:35 AM

It's surprising that you have the views you do. :rolleyes:


I won't respond in kind, I'll just point out that my clients also include banks, pharmaceutical companies, retailers and companies in many different industries. If you think that the fact that I have done some work for customers in the TV field makes me biased, then I suppose you will reject ANY informed opinion, since such information will automatically make the speaker biased.

Seems there is evidence that their costs are out of control. I can see why it would be hard to keep up with 20% annual increases in "manufactured" costs.


I don't think anyone would argue that point. The rise of "reality" programming has been one of several steps taken to reign in costs. But the audience also demands certain production values. I can't count how many times people here on these boards have complained about "cheesy" effects in sci-fi series, or that a show "looks like it was shot on 16mm film". High quality digital effects and high definition production equipment costs lots of money. The talent also commands ever higher salaries, and again, the viewers flock to shows with "big name" casts. These costs have to be paid. The money has to come from somewhere.

Just like I said... the end of skipping is coming.


Not likely...that ship has sailed. What you will see more of is product placements and "in-program" advertisements (you know, those things that appear on the bottom 25% of the screen in the middle of the show).

Get a new IT department.


Thanks, that's what I do for a living...help corporations reorganize their IT.

And stop playing games with promotions - no excuse for self-inflicted wounds.


Promotions are only a part of the problem. Again, just look around here and you'll see the references to folks that have various "grandfathered" packages. What would be their reaction if they were forced to move to the new tiers? And promotions are a necessary evil. The MCO's live in a commodity market. There is no real impediment to changing providers. Gone are the days of franchise exclusivity. Personally, I have 4 providers to choose from (DirecTV, Dish Network, Cablevision and Verizon), and most people have at least 3. Promotions are the way they keep customers. Nobody likes it, but it has to be done, again, because consumers expect them.

To paraphrase an old saying: People get the market they deserve.

Edited by Diana C, 19 March 2013 - 03:11 PM.
corrected typo

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#125 OFFLINE   unixguru

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Posted 19 March 2013 - 03:07 PM

What you will see more of is product placements and "in-program" advertisements (you know, those things that appear on the bottom 25% of the screen in the middle of the show).


I suspect many of us have a low threshold of pain for that. When I see more than a tiny amount I hit delete. Period.

It's bad enough that we have to have a constant channel advertisement - as if we don't know what channel we are watching.

This is just another reason why I might walk away from TV entirely.

#126 OFFLINE   FLWingNut

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Posted 19 March 2013 - 07:38 PM

The ESPN issue has little to do with bundling. ESPN gets what it gets because no provider is willing to chance the reaction they'd get if they dropped it. No provider can compete without ESPN, at least for now.




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