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2011 Pricing

Discussion in 'DIRECTV General Discussion' started by Bofurley, Dec 6, 2010.

  1. Doug Brott

    Doug Brott Lifetime Achiever DBSTalk Club

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    http://www.dbstalk.com/showthread.php?p=2669324#post2669324

    http://www.dbstalk.com/showthread.php?p=2669349#post2669349

    Additionally .. each of these providers make X amount of dollars per month. In an ala carte setup, these providers would still want to make X amount of dollars per month .. With fewer subscribers, the per-subscriber cost would have to be higher. We can debate on what "reasonable" means in my short comment, but if ESPN goes from 18-million subscribers to say 6-million subscribers .. that's 1/3 the number of subscribers. To get to the same dollars per month, ESPN would have to charge 3 times as much as they do now.

    If we assume the $4/month from the chart is still accurate, JUST to get ESPN, it would be $12/month. And since it's a "group of channels" because of the way DIRECTV sells it, we can also assume that that $12 covers all of the ESPN channels.

    This same process would cover ALL channels, not just ESPN .. Also, many channels would not enjoy the ONLY 1/3 subscribers. Some would be only getting about 10% of what they had raising the costs by 10x. Some of those $0.30/month channels would now need to cost $3/month to reach the same levels.

    Over time, the lesser channels would get squeezed out and the larger channels would seek even MORE of your $$$. The provider themselves sell channels in bundles, so you'd have to buy a group of channels regardless (ESPN bundle, CNN bundle, etc.). DIRECTV doesn't have control of that.

    Since everyone wants to maximize their money, you're always going to be paying at the top end of what you consider "value." Once you exceed what you consider to be value, you either reduce your services (less receivers, lower package, etc.) or you drop the service completely. While ala carte looks good on paper, it would ONLY work if you personally had ala carte available to you while everyone else was susceptible to the bundled pricing. If everyone were granted access to ala carte, prices would soar and service levels would decrease. Neither of which DIRECTV (or the providers for that matter) want. I doubt the customers want this either.
     
  2. uteotw

    uteotw Legend

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    All of this is frustrating, but after 20 minutes on the phone I will say the call was worth it and my bill will now be $4 less (at least for 24 months) than it has been, without dropping anything. After 9 years it's nice they're willing to work with you~
     
  3. Hoosier205

    Hoosier205 Active Member

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    [​IMG]
     
  4. sigma1914

    sigma1914 Well-Known Member DBSTalk Club

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    There's been serious studies done...this isn't something new.

    People who want a la carte use that chart to show how cheap channels should cost us. They'll say, "See...BBCA should only cost us $0.12." They fail to realize that a la carte wouldn't make a lot of stations any money. At $0.12/sub, Directv pays about $2.1 million & overall BBCA gets about $8.2 million from all providers. BBCA highest rated show ever had 1.7 million viewers & that's over all providers. So, if only 1.7 million will watch BBCA's highest show, then it's safe to assume 2 million will add it al a carte...and that's being generous. At $0.12/sub for 2 million people, that earns BBCA a whopping $240,000 from all providers combined. Bye-bye BBCA! For BBCA to earn the $8.2 million they get now, the price for little ol' BBCA would be about $4.10 per month. Now, imagine how much actual popular stations would cost...
     
  5. joed32

    joed32 Hall Of Fame

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    It's been done before on C-Band. If you bought 10 or 12 channels the price was the same as a package of channels including the ones you were getting Ala Carte. They just priced it that way so you would buy the packages.
     
  6. Tom Robertson

    Tom Robertson Lifetime Achiever DBSTalk Club

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    Ok, lets consider how ala carte might work:

    You'd start with the fee to your carrier for basic service--ie nothing but an account. Lets say $10-$20 a month.

    Then add in the first channel. You know that there will be no channels that are a penny a month. That doesn't even pay for the billing and record keeping for individualized billing. My guess--nothing will be less than $1/month. But maybe someone will put together a really cheap channel for $.50 a month.

    Even at that, very few channels are individually worth 50 cents each month.

    So channels would lump together so they can get their value up enough to warrant covering the costs of the accounting. Thus starts bundling...

    Eventually the bundles are the only way to go and ala carte has died yet again.

    The math just doesn't work. Unless you like paying $1 per channel--minimum.

    Cheers,
    Tom
     
  7. Tom Robertson

    Tom Robertson Lifetime Achiever DBSTalk Club

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    Now, I suppose C-Band had one problem--I hated to deal with multiple vendors to find the channels I wanted.

    DIRECTV would be, most likely, my only broker. (Unless Congress decided that there needed to be competition for pricing on the DIRECTV service... then I'm back to dealing with multiple companies to find the packages I want. Driving costs up with the extra accounting and billing duplication....)

    Even as DIRECTV is my only broker--they would have to significantly increase their computers to track every account's individual channel selections. Track the billing, send the monies to the channels, etc.

    Economy of scale. You don't buy a car one part at a time. The screws that cost less than a penny in a car become much more expensive ala carte....

    Cheers,
    Tom
     
  8. pfp

    pfp Whatever

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    2, 20, 200 peoples opinion doesn't make it true.

    I don't dispute that it may be true myself - I'm not entirely convinced one way or the other. I just get a bit tied of people immediately dismissing the idea as preposterous and entirely unworkable and then berating people who suggest it. Many times these same people fully support other ala carte options we are given such as the DVR fee, HD fee, MRV fee, HD plus channels.

    I have no doubt that in an ala carte world prices for individual channels (or channel blocks such as Discovery, ESPN, etc) would skyrocket. So perhaps a block of all ESPN channels would cost $12/mo. So what? How would this be different from HBO, SHO, etc that we already have as individual choices. Those that want the service and find value in the price will buy it and everyone else wont need to subsidize a channel they don't care about. Having to actually earn their customers instead of being guaranteed money from the cable/sat co's should also make the channel's more responsive to the consumer and what they want.

    Of course there are channels that would not be able to survive but really, how many channels do we need showing reruns of Friends, Law and Order, whatever. Quite frankly there are way to many channels right now with mostly garbage or overly recycled programming. These channels on the fringe will either make themselves more appealing or they will consolidate. Again - so what?
     
  9. TheRatPatrol

    TheRatPatrol Hall Of Fame

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    At least with C-Band you had access to all available channels. The problem with cable and satellite is that you're stuck with what they give you, or don't give you. I still say we need a system which has all available channels accessible, then let the customer decide what they want to watch.
     
  10. sheureka

    sheureka Legend

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    Anyone know what Select Classic will cost? TIA - sheureka
     
  11. Doug Brott

    Doug Brott Lifetime Achiever DBSTalk Club

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    I never said a la carte isn't possible .. I said "Reasonably priced a la carte isn't possible."

    We'd be left with higher prices and fewer choices.

    As for doing a scientific study to prove it .. Uh, no thanks. It's crystal clear to me what the result would be. If you're not convinced, then so be it.

     
  12. James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

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    Perhaps it was an abrupt way of putting it, paid back by your abrupt rebuke ... the thread is supposed to be about DirecTV's 2011 pricing and there is no hint of DirecTV going a la carte so a quick dismissal of the idea seems somewhat appropriate. Have you seen the dozens of other threads on the issue of a la carte? I'd expect the consensus would remain the same ... "Reasonably priced ala carte isn't possible."

    A la carte features, whether or not to have a DVR, HD, MRV or a few extra channels are within the control of DirecTV. No program provider is refusing to allow DirecTV to carry their programming if it isn't bundled with MRV. Premium packages have existed since the beginning of packages ... HBO and Showtime liked being a lot of money extra instead of reaching more people at a lower price. It is the way they agreed to have their channels placed.

    There isn't enough bandwidth to make all channels available. Some channels would still be left out.

    C Band was unique as the feeds were put up to feed cable systems and direct sales to individuals was more of an afterthought or piracy reduction than the intent of the signals being transmitted. The uplink costs were paid for by the bulk subscription of cable companies serving hundreds of thousands customers. With channels spread out across the sky not everyone had access to all channels ... so charging for what a person could get on the satellites they could see made sense. DBS is more like cable ... concentrating signals from a hundred sources in to one location. And being like cable, the pricing structure grew to be like cable.
     
  13. Tom Robertson

    Tom Robertson Lifetime Achiever DBSTalk Club

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    Since I'm convinced ala carte won't fly, what might happen?

    The whole goal is to find packaging that sells (and makes money). :)

    At the same time, I think people don't want nickel and diming.

    So, I'm guessing we'll see more packages or perhaps better described as package types.

    Right now, there is pretty much a progression of packages from low priced to high priced.

    Maybe we'll see parallel progressions of packages:
    A Sports concentration
    A family concentration
    Movies
    News

    That seems like a lot of package groups, so likely there will be just a few that actually survive.

    And the big question is what will it take for the channels accept these changes?

    Cheers,
    Tom
     
  14. James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

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    Sounds Canadian to me. :D

    And that has been one of the stalwarts of those pushing a la carte ... Canada does it! But they don't. There is still a base plus the theme packs ... and unless your interests are in only one theme pack one still gets a sizable bill.

    $$$$$$$$$$$$$
    (or government interference)
     
  15. SledgeHammer

    SledgeHammer Icon

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    Question... I've been with DTV since 2002 and have the Total Choice Plus legacy + locals + HD courtesy pack + HD + HD DVR. Right now I'm paying $68.49 a month because I did the "free HD for 2 yrs" thing a few months ago or whenever they did that promotion. If I recall, that promotion locked me into a 2yr contract. Does that mean my pricing will not go up this year? Looks like my "Total Choice Plus is $61.49 of that if I understand DirecTVs retarded bill layout.
     
  16. DogLover

    DogLover Hall Of Fame

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    The promotion did not lock you into a 2 year commitment. (Commitments are based on adding new leased equipment to your account.) Even if you did have a commitment, the terms of service allow them to change the price, so that would not nullify the commitment.
     
  17. SledgeHammer

    SledgeHammer Icon

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    That sucks... I didn't get a 5% salary increase this year :(. I guess thats why all 50 states have sued DirecTV (and won -- well, DTV settled... same thang).
     
  18. joshjr

    joshjr Hall Of Fame

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    Its not a contract. If you remove the autopay today then you will no longer get the $10 discount. Just a promo really.
     
  19. Doug Brott

    Doug Brott Lifetime Achiever DBSTalk Club

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    The lawsuit had nothing to do with DIRECTV's ability to raise prices. If you look back at your service agreement, DIRECTV has the right to change pricing at any time .. Generally speaking, they do it once every year.
     
  20. Dave

    Dave Icon

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    So just with the 4% rate hike in Feb. we are looking at the following cost for the packages.

    Choice Now=$ 58.99 - Feb. 2011=$61.34
    Choice Extra Now= $63.99 - Feb. 2011= $66.51
    Choice Ultimate Now= $ 68.98 - Feb. 2011= $ 71.74
    Premier Package Now= $ 114.99 - Feb. 2011= $ 119.59

    This is just the basic rate increase. DTV will be increasing more charges for some different items which we do not know what they are just yet.
     

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