A LaCarte Programming

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

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  1. IowaStateFan

    IowaStateFan Godfather

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    I think that is part of the problem with this discussion. Too many people see pay tv as a right. Since the cost is going up and up they are looking to the government for relief.

    I think you are partially right, we have been a captive audience. Most people wouldn't even think about eliminating pay tv. The industry knows this and has been quietly raising rates a buck or two each year. No big deal, right? Well over 10 years that brings the entry level package to $35/year - before fees. Now people are starting to complain about it. But, if bear is right, that is changing. His comments make a lot of sense:
    Pardon me bear if I misrepresent you here, but I believe the gist of what you are saying is that new technologies are altering the way we watch TV and are fostering the competition that we all crave. With any luck it will keep the price increases down (I don't hold out much hope for price decreases).

    Agreed. The family packs are just a way of meeting the minimum requirements to satisfy the government regulators and keep them off their backs. They are not about offering more choice.

    Probably not without a fight. Actually, most people seem to want ESPN. The fact that it is not included in family packs may be the undoing of them. Now the family pack people (and I'm not one of them - I'd rather see true a la carte) are complaining that there is not enough content in those packs. Lack of sports programming seems to be drawing the most complaints. Without a true a la carte option there will always be complaints about the way packages are laid out. Witness Fifty Caliber's thread attempting to rearrange the packages.
     
  2. IowaStateFan

    IowaStateFan Godfather

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    I completely disagree with this. Truly successful companies have 4 stakeholders that they take care of - owners, employees, customers, and the community. IMO, none of these are any more or less important than the others. Without customers, there can be no sales. Without employees there can be no sales. Without owners, there is no capital to create the product/service. If you don't take care of the community you will be perceived as greedy and sales will fall. It can be viewed as a continuous circle and if any of the links in the circle are broken the company will not do as well as it could otherwise (they may not fail, but they could do better). A good company finds and develops a market and takes care of its employees. The employees take care of the customers, and the customers buy lots of the product or service. This rewards the owners (who've risked their capital) with nice profits.

    Of course, one can identify companies that are out to screw their customers. As you pointed out Enron was one. They may have succeeded for a short while doing that, but never for the long-term. The last time I looked Enron's managers were on trial, and the owners had lost their shirts. Not much of a success in my mind.
     
  3. the_bear

    the_bear Godfather

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    I understand it is already difficult to get college kids to buy big bundles of pay TV. Although, I have not seen any official research on the subject. Since college kids are always looking for research papers, I surprised we have not seen any papers yet published on the subject.
     
  4. Paul Secic

    Paul Secic Hall Of Fame

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    You'l pay more with a la cate:

    Base price: $10 to $15. $2 $5 per chanel.

    This is just a guess. Cable & DBS companies have to make money.
     
  5. IowaStateFan

    IowaStateFan Godfather

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    SOME wil pay more with a la carte. Many would save. Using your guess if I watch 5 channels:
    Base price $15
    Channels $25
    Total $40

    That's the high side. If 2 of my channels are currently in AT180 I'd pay $49.99. I'm saving $9.99 (or 20%) and getting all the channels I watch.
     
  6. jrb531

    jrb531 Icon

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    May 28, 2004
    I say Base price will be 50 cents and each channel will cost 1 penny.

    This is just a guess. :)

    Why even guess when neither you nor I have any real numbers.

    Fact is that only two things can happen if we get ala-cart options:

    1. Approx the same number of people subscribe to the same channels and nothing will change except we have some choice in the channels we select.

    2. Some channels will experience a drop in subscribers and as such will have to react by either cutting their costs, raising prices or doing something to increase their popularity.

    Now if you can provide a third option please do so but the way I see it every other business in the country has to deal with option #2.

    If a channel cannot sustain itself why is it a bad thing if less popular channels cease to exist?

    Can anyone name a few pay TV channels that have gone belly up in the last few years? Real channels that we all used to get but proved unpopular and went bye bye?

    I don't recall any do you?

    -JB
     
  7. Opynion

    Opynion Godfather

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    Mar 21, 2006
    According to the report, with the a la carte option people could get 20 channels and save from 3% to 13%
    no matter what some people say, the FCC has looked into this a la carte and sooner or later they will do something about it -- with a republicans or not, remember what the republicans did to the phone company years ago, or was it Ronald Reagan?. :)
    The a la carte could be offered as a build a pack of 20 channels; for customers who want this option, want more channels?--get a regular package!
     
  8. Opynion

    Opynion Godfather

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    ...select the channels you want and then put them in your favorite list...

    There are more ways than one to stick the a la carte option into the video services, that's for sure! :)
     
  9. rcbridge

    rcbridge Godfather

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    I personally would like Ala-Cart, but I am looking at it from the business side many people in this discussion don't agree with the business side (I don't really like it either) but this is how it is. For the changes some of you want if many of us chose them Dish, Direct and cable would soon be out of business!!
    At a minimum we would start to loose some of the "niche" channels, I am sure we all have a few that we watch on a regular basis, (I have seen the reports on the viewership of the cable channels) and many of you would be surprised when you discover that many channels we think are widely viewed are not!!

    From that perspective be careful what you wish for!!
     
  10. jrb531

    jrb531 Icon

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    As long as Dish, D* and cable act like distributors they will not go out of business. You want to require me to pick x number of channels or I'll get charged some minimal usage fee then fine but all we are asking is that "we" get to pick the channels.

    Now some of the programmers may be in trouble for unpopular or expensive channels but why would the distributors care what channels we want if all they are doing is adding a distribution/rental fee to our bill?

    If you only want 5 channels then expect to pay some minimal usage fee as the distributors do have to maintain the distribution system. I think people understand this.

    -JB
     
  11. Greg Bimson

    Greg Bimson Hall Of Fame

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    Again, that is a paradigm shift from the current business model.

    The distributors, for fear of legislation regarding a la carte, set up packages that allowed for a family-friendly version of programming package. This must also imply that the distributors are happy with the amount of money they can make off of such a package.

    If there was any true push towards a la carte, it was evidenced by the comments made by FCC Chariman Martin, and the subsequent reaction. The Family Packs were created simply to address Martin's issues with current packaging.

    The feeling is that without a high "usage" fee for a la carte, the distributors will not be able to make a healthy profit margin on the a la carte subs. Look at what DirecTV is doing: they are sacrificing subscriber growth for higher Average Revenue Per Unit (ARPU). DirecTV wants their low end subscribers to either bump up to a higher tier, or leave. DirecTV realizes that 60 percent of their revenues come from the top 35 percent of their customer base. So they are concentrating on growing both the size and the revenues of the top of the customer base.

    And a la carte is counter to that, considering that a la carte is only about saving the consumer money (supposedly).
     
  12. jrb531

    jrb531 Icon

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    I think it depends on how you look at it.

    Saving money only because the current system is forcing "many" of us to subscribe to higher packages to get the channels we want.

    I would say this is more about choice.

    I would be perfectly happy with the exact same setup (three theirs) providing the following: (numbers not exact just for example)


    Package A: Pick 24 channels from the list of "inexpensive" channels
    (additional "A" channels cost $1 each) (package gets you 4 free channels vs ala cart)

    Package B: Pick 12 channels from the list of "medium priced" channels
    (additional "B" channels cost $2 each) (package gets you 2 free channels vs ala cart)

    Package C: Pick 6 channels from the list of "expensive" channels
    (additional "C" channels cost $4 each) (package gets you 1 free channel vs ala cart)


    If you do not subscribe to a package you can still get individual channels in that package for the "per channel" cost.

    Each package could have as many channels as you want and channels are free to move from one package to another if their content or costs change.

    IMHO what is nice about such a setup is that each of the packages will cost the very same price and Dish can keep the current package system to keep about the same revenue. The only real change is that we would get to pick the channels we want.

    This system allows choice as well as keeping a strong incentive for people to keep packages.

    Any thoughts?

    -JB

    P.S. The numbers, cost and such are for example and should not be taken literally :)
     
  13. the_bear

    the_bear Godfather

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    How true. There seems to be a misconception running through this thread that somehow a consumer level ALC mandate would help E profits. Part of the confusion is that some the ALC proposals are only at the wholesale level. The wholesale only ALC proposals still allow deep bundling discounts at the consumer level. Since the wholesale contracts are negotiated at a line item level, it would be impossible to enforce such a mandate. In another words, if E kicks ESPN out of basic. There is no way of knowing if the resulting poor ABC negotiations are in retaliation or fair play.

    As you have stated, consumer level bundling helps boost E profits, but the effects are farther reaching. Even the salesman at Circuit City gets a bigger paycheck because of bundling. Bundling encourages people to watch more premium TV and therefore buy bigger TVs. While I am against an ALC mandate, I do agree with those that say it would eliminate premium TV.
     
  14. jrb531

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    You are assuming that people, given choice, would elect to only subscribe to the cheaper channels.

    I submit that many, myself included, would gladly take less channels of higher price/quality just as much as those who would be looking for el cheapo channels.

    I guess we just do not know what the public would do if given a choice which is prob why people are so afraid of it. Better to keep the status qho I guess.

    How many people to this day still pay higher monthly rates by staying with cable for no other reason as they are used to cable and fear any sort of change?

    -JB
     
  15. Greg Bimson

    Greg Bimson Hall Of Fame

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    Bingo. The pricing for each channel that the distributor pays is based upon being included in a package. Remove the package, or add the ability to get the channel a la carte, would be an entirely different price structure. This appears to be lost on jrb531, because...
    Congratulations on your example of another reason why the status quo will be maintained. All you did here is to divide channels into another packaging scheme. And there is no way this scheme can be implemented without destroying all current carriage contracts, most likely by the enactment of some kind of law. And this packaging is just a subjective as AT60, AT120, and AT180

    Case in point: the wonderful report commissioned by FCC Chairman Martin. Buried in the report is that for an analog cable subscriber to move to a la carte for the exact same money as they pay today, the subscriber will only receive 10 to 14 channels for the same money as their current package.

    So we go back to the original argument: since when does the consumer get to pick the content of the tiers?
     
  16. rcbridge

    rcbridge Godfather

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    Let's take one more step back wards and look at part of the cost of a network
    "Ad revenues" the number of potential eyes to look at a product will increase or decrease the cost of an ad (use the superbowl as an example).

    I only bring this up because this system is a very entangled one, if I am a network and I can promise you I am available in 50million households you pay me one price, if only 5 million a different price.
    This is why everyone wants in on the most basic packages!!
    Again is this a good thing for the consumer NO!! but it is part of the business model.

    Ala-carte will have a greater effect than most people realize, this is not me taking sides but trying to keep a greater perspective on the big picture!!

    Another thing if people are allowed total freedom to pick and choose at will keeping track of the number of potential eyes becomes a hugh task!!

    Again not me taking sides but just trying to present the larger picture!!
     
  17. jrb531

    jrb531 Icon

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    Nothing was lost on me.... I simply refuse to accept that "Pre-picked" channels are the only way a business can make a profit.

    You seem to miss the point of my suggestion.... while this would keep the packaging scheme it would allow "us" to pick what channels we are paying for. You also must have missed that you could ala-cart channels but at a much higher price. Might want to read something before you shoot it down.

    As far as contract... forget the damn things. These stupid anti-competative contracts riddled with "must-carry" as well as "take my crap channels or you don't get the popular ones" are what has gotten us to this point. Funny how all these contracts were waived in a matter of days when Dish created the family pack to try and head off ala-cart when proponents were using the "smut card" to help in their case. Seems like the Pay TV industry can do darn near anything they want when it's in "their" best interest but when it might help those supporting choice then suddenly we have insurmountable roadblocks that cannot be changed no matter what.

    My example was to show that the distributors could keep their same revenue stream "and" allow us the choice to pick the channels "we" want and not some form of pre-set channel packages that do nothing but maximize the profits of the programmers are the expence of competition and choice.

    Look at what the programmer reps here keep trying to shovel our way to support status quo (screw the consumer):

    1. We can't have choice because the distributors will lose $$$

    Answer: require a minimum set of channels otherwise you pay a minimum channel fee

    2. We can't have choice because it would be too difficult for the distributors to allow you to pick the channels:

    Answer: allow us to select our channels online of over the phone via computer thus you have little or no human (read: expensive) interaction.

    3. We can't have choice because of contract agreements

    Answer: Forget the stupid anti-consumer contracts! This has to be the stupidest arguement I have ever seen against choice! Because the programmers want to continue to rape the consumer in regard to forced channels and no competition we should back down and just take it?????

    4. We can't have choice because the nitch channels would go away

    Answer: So what? If a channel cannot survive on it's own popularity it must act like any other business to survive.... evolve to attract new subscribers or ensure that their content is superior to the competition so that people are willing to pay for quality.

    5. We can't have choice because then I will have to pay my fair share for the 10 zillion channels I cannot live without.

    Answer: GOOD! - you pay for your channels and I'll pay for mine!

    Shall I go on? There is a counter to every single "the sky will fall" arguement.

    It's simple and I do "get" it:

    The distributors need to make a profit
    The programmers need to make a profit
    The subscribers (us) need to have some choice aside from...

    Pay TV = Yes
    Pay TV = No

    Right now this is our only choice.

    IMHO my example above (adjusted for the correct numbers of course) would be far far far better than what we have now. The only real issue is that the programmers would have competition because we could cancel their channel if we no longer want it. I guess having this choice will cause the end of the world :)

    -JB
     
  18. IowaStateFan

    IowaStateFan Godfather

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    They don't. That's the point, isn't it. Some of us want to be able to pick our content. Others are very happy with the status quo and are afraid that changing it will screw up their television viewing. I agree that a la carte will change the way that contracts are negotiated. I also agree that some channels may end up going away under an a la carte system (note: system, not mandate. I'm against a government mandate here). The only reason some channels exist is because they are being subsidized by the package system. If they can't make it on their own, they need to be reprogrammed or done away with. If I lose my favorite channel I won't cry about it. There are much more important things than television.

    In the end, I think the discussions in this thread will become moot. Television is changing whether we want it to or not. Technology will bring more choice and more competition in ways that we can only now imagine. Five years from now we'll all be laughing at how passionate we were about such an arcane concept as a la carte. Forget a la carte channels. We'll all have a la carte shows. Streaming networks via satellite or cable will be replaced by download on demand. For $x/mo (or $y per show) we will be able to download and watch a certain number of shows each month. Only the shows we want will be coming into our homes and we will be able to choose how much we spend on television. Companies like D*, E*, TW, and Adelphia will have to be very creative to keep customers from going to the new technologies. That's the nature of a free market - adapt or go broke.
     
  19. jrb531

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    Sorry I just had to comment on this one. Aside from my questioning how valid these numbers are and where they come from let's assume this is correct...

    If I was able to pick those 14 channels from a list of all available I would do so in a second as I suspect other would. You see I currently only watch a few channels in each package.

    What some just do not get is that many people do not care what their total channel count is. They just want to watch the handfull of channels they like and are willing to pay for those.

    Since I have not seen this crystal ball report I wonder if this average analog subscriber was paying for 100 channels and the report suggests they will drop from 100 to 14 channels or was this a basic 30 channel cable subscriber who would lose half their channels but be allowed to pick from a larger selection.

    The devil is in the details is it not?

    If Dish offers 100 channels in all three packages why is it so hard to understand that some people would rather only get 30 of them if they were allowed to pick the ones they want and save even just a few $$$'s?

    I swear some people are so caught up in channel counts... well either that or they are deathly afraid of what they would have to pay for all those channels if others were not forced to subsidize them.

    -JB
     
  20. the_bear

    the_bear Godfather

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    I’m confused. Are you saying an ALC would lower bills for the average Joe or not?
    If E suddenly went ALC, they would have reduced profit. It is not about making some profit it is about making the most profit. This is why you see bigger choice from newcomers like Apple. They see Dish’s profits as something to take.
    Also, look at how much word-of-mouth effects viewing. Although, I have some premium, some of my friends have only basic. They tell me about new shows they like. So, even someone with the works is more likely to watch basic programming. This leads those shows to have bigger budgets, further upping viewer count. Being in basic really packs a one-two punch. This is why I am so against the government mandating which channels are in basic. E basically has to pay-off channels to get them out of basic.
     
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