A LaCarte Programming

Discussion in 'General DISH™ Discussion' started by Kendick, Feb 10, 2006.

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  1. Jacob S

    Jacob S Hall Of Fame

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    I beleive that if we see ala carte on satellite or cable that we will see an access fee charged in addition to those channels that you pick and choose for not picking a package of channels. The satellite and cable companies want to make a minimal amount of money off of you.
     
  2. Greg Bimson

    Greg Bimson Hall Of Fame

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    I don't have to. All I have to do is this...

    The NFL will make $700 million a year off of DirecTV for the Sunday Ticket exclusive. MLB, NBA, and NHL will not even come close.

    Once again, the problem isn't that DirecTV won't allow competition for the pricing, it is that the NFL wants their $700 million a year from DirecTV for Sunday Ticket. By the way, NONE of the NFL contracts are money generators for those that hold the contracts. Fox has operated their NFL contracts at a loss for years.
    Why is there a minimum? Who determines that minimum? And are all providers charging the minimum? Why? I've questioned all of this before, without an answer, and that answer is very important...
    Nowhere did I say this. Everyone knows the cablers, DirecTV, and Dish Network price their non-sports packages at a point where they balance their expenses with their ability to make money.

    Think about this: competitive pressures force the DBS and cable companies to offer out-of-market braodcasts of non-NFL sports leagues at some minimum price, set by the leagues.

    WHY?

    If there are competitive pressures, why can't anything be done with the pricing on the sports packages?

    Why are the non-NFL sports leagues involved in the minimum pricing? Why is it the non-NFL sports leagues get to determine the minimum pricing?
     
  3. BabaLouie

    BabaLouie AllStar

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    Only non-sports? So you believe that Dish Network and DirecTv are either breaking even or losing money on their sports pakcages? I highly doubt it.

    BTW, you still have ignored my point about DirecTv requiring Sunday Ticket customers to subscribe to Total Choice. Do you think the NFL required that? Isn't it interesting that back when Sunday Ticket was available BOTH on C-Band and DirecTv, it could be purchased ala-carte, but after DirecTv got exclusive rights in the US, surprise, surprise, you then had to take a $40.00 per month package to get Sunday Ticket.

    Also, in Canada, where there are several providers offering Sunday Ticket, the price is significantly LOWER. Am I to believe that competiton has NOTHING to do with that? Yes, I'm aware that NFL football is not followed by as large a percentage of the Canadian population as here in the US, yet the fans that are there are passionate about their football.


    Again, how do you know the competitive pressures AREN'T keeping the pricing LOWER than it would otherwise be?


    You have not proven that the leagues tell Dish and Directv what they must charge for their packages.

    Consider this: Last summer, DirecTv told its Sunday Ticket customers they would have to pay $99.00 EXTRA a year to get NFL games in HD, which in previous years were provided at NO extra charge. The new plan was followed by a flood of complaints. DirecTv agreed to cut the price in half. There's NO evidence there was any stipulation by the NFL as to what extra amount DirecTv had to charge for HD games, if ANY. That was purely DirecTv's decision to charge the extra, and it was their decision to cut the price down.
     
  4. Greg Bimson

    Greg Bimson Hall Of Fame

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    Once again, we are arguing apples and oranges:

    The reason why the non-NFL sports packages have a minimum set price is because the leagues get half the payment for the package; the distributors in some other fashion get the other half.
    Stop putting words in my quotes. I said that the DBS companies price their non-sports package for the best way they can make money.

    The sports packages, and most other "premium" services are basic revenue sharing agreements. The studios get a slice of each PPV purchase; the adult films generate about a 90 percent share for the cable or satellite company; the regular movie channels and the sports packages allow the distributor to keep half the take while giving the other half to the content provider (HBO, NBA, Showtime, MLB, etc.).
    And when the NFL decided to renew a contract, which allows them to increase their payment from DirecTV from $400 million to $700 million a year, you figure out what happened. The NFL decided to allow DirecTV to sell this with DirecTV's Total Choice. In order for DirecTV to make any money, they need the subscribers to have a minimum package now. That wasn't the case years ago.
    Because the leagues other than the NFL get half share from each subscriber. If the leagues are setting the minimum price, the leagues are therefore setting some kind of "artificial" minimum. They could pick numbers out of a hat, tell everyone that is the minimum price. It is an artificial construct that allows the league to receive a set share from their rebroadcasting partners that is not based in "competition". Just because many cablers, DirecTV and Dish Network offer NHL Center Ice does not mean that any of them are competing for the dollars associated with the package. They can't drop below a minimum price.
    Consider this...

    The NFL holds a competitive process to determine who their television partners are. The NFL resigned with DirecTV for $700 million in a somewhat competitive process, as the contracts allow the current contract holder the right of first negotiation and the right of first refusal. For this $700 million, DirecTV gets to set the price* of the Sunday Ticket package to their customers.

    Because of the competition in the bidding process, this is a "free and fair market solution". Everyone will pay dearly for the NFL games because the NFL brand is one of the most popular in the US. And DirecTV will set the price because they won the exclusive contract.

    How does this tie to a la carte? If the NFL is a version of the "free and fair market value", a la carte pricing will go way up over time. The more you build a brand, the more customers that appreciate that brand, the more the customers will pay for it. ESPN has been receiving double-digit rate increases yearly because they are a very popular brand, and because any system that loses it will lose more than 20 percent of their customers overnight.

    (* -Disclaimer- I have argued different things in the past. I believe that DirecTV does set the price to the end user for their customers, while I may have believed differently a few years ago.)
     
  5. Greg Bimson

    Greg Bimson Hall Of Fame

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    And then we have an analysis of the report, direct from SkyReport.com (reprinted without permission):
     
  6. IowaStateFan

    IowaStateFan Godfather

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    A few lines from the article with my comments.

    Assuming that this analysis is correct, it does not change my position - a la carte should be an option. I currently watch 14 channels regularly, of the remaining 100+ (I subscribe to AT120 + HD pack) I watch 3 - 5 very rarely (and wouldn't miss them), and the remainder never ever. If I could subscribe to the 14 a la carte my bill might come down $10/mo. That is just a wild a** guess, it could be a little more or a little less. $10/mo is not much, and I'd probably choose the package anyway, but if money were tight at least I'd have that option.

    Agreed. I think most of us would continue to choose a package, and I do not advocate any government mandate.

    Sort of. There may be more programs coming into our homes to choose from, but are they worth watching? How many times have you surfed the EPG and found nothing on? Are we really getting more choice? Actually, I believe we are getting less choice. For example, there are a few channels in the AT180 I'd like to have, but I'm not willing to spend the $10/mo to get them. So now my viewing choices have been restricted because I'd have to buy several channels I don't want to get the few I do. That's probably my biggest gripe with the current bundling system. The distributors put a few "goodies" in each of the tiers to entice you to buy the whole package. If I could, I'd dump a whole bunch of the channels in AT120 and add the few from AT180 that I'd like. Now that would give me increased choice.

    I agree with this, too. Most people would probably continue to buy packages. The convenience and ability to watch something spontaneously are worth the extra cost to them. I'd love to see the market work this out, but I don't believe that the industry is truly competitive. Most of the distributors are also the content providers. They don't currently have an incentive to fight the system because they all are after the same thing. Even Charlie who supposedly champions a la carte, started bundling Voom with the HD pack now that he's part owner of Voom. If any government action is required it might be to split the content providers from the distributors.
     
  7. vahighland

    vahighland Cool Member/Supporter DBSTalk Gold Club

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    This article does not indicate the cost of sports programming as a segment. Why not??? Sport programming is very expensive and I believe that if people had the option of selecting theme-based packages without sport programming, they would save $$$. It does not account for theme-based packaging, only pure a la carte.
     
  8. Stewart Vernon

    Stewart Vernon Roving Reporter Staff Member Super Moderator DBSTalk Club

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    I still like my buffet example.

    Some buffets have tiered setups too.

    You can buy the one-trip or to-go buffet for one price... Choose from anything you want, but only one trip!

    You can buy the whole buffet all-you-can-eat for another price good for that visit... Leave and come back tomorrow and pay that price to eat again.

    You can buy just the main course buffet, without trips to the dessert bar, for a different price (less than the full buffet). You can eat anything except the dessert bar.

    On the weekends there is a breakfast bar... One price for all you can eat breakfast but only from 8-11 am. After 11am you cannot order the breakfast bar and get breakfast. BUT, if you come at 10:30am you can stay for more than an hour and sample from the breakfast AND lunch buffets!

    Some nights they have shrimp/lobster on the buffet and the dinner price costs more.

    But if the buffet is $7.99 all-you-can-eat... you can't just pay $1.99 and eat mashed potatoes and corn. You have to pay $7.99 even if you don't want most of the buffet.
     
  9. ClaudeR

    ClaudeR Godfather

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    I agree fully with the buffet example - that is why I'll go next door to McDonalds and get a double cheese burger and fries for $2, and use the drink I have at home. Otherwise, I go to Wendy's and buy the 99 cent backed potato and chicken tenders. There are options, and Dish is offering options, such as the new DishFamily. Each rate increase is blamed on ESPN, so I would like a non-sports package at $20. Dish still gets its fee for DVR, fee for warranty, fee for not having phone line, fee for downgrading service, fee for paying your bill, fee for being a customer, etc..
     
  10. Greg Bimson

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    And what, pray tell, will cause the multichannel industry in the United States to go to a theme-based packaging scheme? The free market has already evolved to this point, so how is anyone going to be able to create a "theme-based package"?

    And just remember, how in the world would a theme-based package be packaged? WGN, TBS, TNT, F/X etc., all show some type of sports programming. Would they end up in the "sports theme"? If you don't like the packaging now, you may not like the packaging in the future.
     
  11. Stewart Vernon

    Stewart Vernon Roving Reporter Staff Member Super Moderator DBSTalk Club

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    It must also be arguable that people want sports! If people didn't... then how would all those sports teams be making all that money?

    I see people in the seats... so those people must like sports too.
     
  12. Mike D-CO5

    Mike D-CO5 Hall Of Fame

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    Just spin off the sports into it's own ala carte package and then most people would be happy. That and make forced bundeling by content providers illegal. This right here would solve most problems and the need for ALL channels to be ala carte would go away.
     
  13. Greg Bimson

    Greg Bimson Hall Of Fame

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    Nice comment. Now who is going to force this?
    But what about forced bundling by distributors? There should be some kind of law that discriminates between channel providers bundling and distributors bundling?
     
  14. vahighland

    vahighland Cool Member/Supporter DBSTalk Gold Club

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    Let me elaborate on what I mean by themes. Start with one of Dish Network's programming pages:
    http://www.dishnetwork.com/content/programming/packages/at_150/index.asp?viewby=1&packid=10045&sortby=1
    Currently, they display the channel lineup by themes such as Lifestyles Entertainment, News/Informational, Family, Sports, Education/Leaning, etc. Of course not everyone will agree with these themes, but the point is that there's a reason why they display the channel lineup in this manner.

    Now, there are methods by which you could determine what the themes are. Firstly, get the customers involved. Customers could and would be happy to fill out surveys, create affinity diagrams, and perform other activities to come to some consensus with what the themes are. I know I would. To answer your specific questions about those channels, I don't know but I know how to find out. LET THE CUSTOMERS DECIDE. If I were in the surveys, I would ask questions like what % of sports programming does TBS have? And yes the % could change over time, but so could the themes and placement of channels.

    The content providers should not be the ones dictating the packages. The large distributors of content (Dish, DirecTV, Comcast) are in a unique position to stand up to the content providers in lieu of government involvement. Believe me; I would rather NOT have the government involved, unless all other options have been exhausted.

    Keep in mind, I'm just stating this as an alternative to pure a la carte if pure a la carte is deemed too difficult to manage. By the way I'm not just picking on sports, I think the current offerings AT60, AT120, AT180 make no sense period.
     
  15. vahighland

    vahighland Cool Member/Supporter DBSTalk Gold Club

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    We all know that. The people who really want sports should have the freedom to spend as much as their hard-earned money on sports as they want. Some people optionally pay for DirecTV's NFL Ticket and I think that's dandy. The keyword is OPTIONAL!!!
     
  16. vahighland

    vahighland Cool Member/Supporter DBSTalk Gold Club

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    I've enjoyed many of the analogies, especially the buffet, but it's just not the same thing. When it comes to food, a consumer has many choices because of competition. You can go the grocery store and buy individual items. There are countless grocery stores, gourmets, and market stores to choose from. And of course this is the cheapest way to eat. Or, you can pay a little more money and have someone else get the food and prepare it. There are countless restaurants with different menus, food quality, and prices to choose from. Some offer buffets with optional choices, some just a plain buffet, and many with no buffet. You decide want you want and go get it. It's that simple.

    Not true for TV land. If all I want is A&E, Discovery, TLC, DIY, and the local channels, it's impossible to get.
     
  17. Greg Bimson

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    And the funny thing is DBS has gone from zero to 27 million customers over the past 12 years without letting the customer decide on which channels to buy. However, the customers have decided to buy those packages; currently 27 million customers.
    What unique position? Suppose Dish Network draws a line in the sand: Dish Network will now only sell theme-based packages. All of their current carriage contracts must be ripped up and renegotiated. There will be fights between Dish Network and the content providers. A large chunk of channels go missing while carriage agreements are finalized. And the customers are left in limbo. Dish Network would lose customers practically overnight.

    The content provider has had the upper hand, because as one TV executive has said, "content is king!". And if the content isn't available on a platform, people will move to another platform. Just look at how long the Viacom/Dish Network dispute lasted before an agreement was made (all of three days). Dish Network took the brunt of the backlash in both terms of media and subscribers.
     
  18. Art7220

    Art7220 Godfather

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    What everyone forgets is that lots of channels wasn't a problem when cable bills were $20/month. Then rates kept climbing up to 40 if not more, now it's a problem.

    Cable can make ala carte not work by colluding together to raise rates for smaller channel groups so they can say, "See, ala carte is more expensive."

    I read on Broadcasting Cable that the NCTA and Disney produced another ala carte study that concluded it would not be cheaper and that the last study was flawed. This is an example of the cable lobbying group and a programmer colluding to say ala carte won't work. What did you expect?

    -A-
     
  19. the_bear

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    The buffet changes my eating habits. When I get to the buffet, I go straight to the shrimp and lobster, but when I order a la carte I eat the mashed potatoes and corn. I can only assume under a la carte I will be watching less “History of National Parks” and more “Law & Order” reruns.
     
  20. Stewart Vernon

    Stewart Vernon Roving Reporter Staff Member Super Moderator DBSTalk Club

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    You have to think of it this way... Yes, there are many different restaurants... but you can ONLY get a Mcdonald's Quarter Pounder at McDonald's! Yes, you can get burgers elsewhere, but only one place to get that burger!

    There are lots of different TV channels... and lots of different ways to get TV signals (Dish, DirecTV, C-band, SkyAngel, Time Warner, Cox, Comcast, Charter, Verizon in some areas, DVD, VHS, Betamax, free OTA)... so there is competition and choice! But there is only one A&E channel, and you can't get A&E everywhere.

    To get a Quarter Pounder, you have to eat at McDonald's... but you could eat elsewhere. To get A&E your choices are similarly more limited... but IF you just wanted to watch TV, then there are lots of options.

    Some folks want to apply the "monopoly" tag where it isn't appropriate. You could say McDonald's has a monopoly on the Quarter Pounder, and you'd be right... but you can get hamburgers elsewhere.
     
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