Rate increases coming, could be worse

Discussion in 'DIRECTV General Discussion' started by ChicagoBlue, Sep 11, 2012.

  1. Sep 14, 2012 #61 of 134
    kick4fun

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    I nominate you the President!
     
  2. Sep 14, 2012 #62 of 134
    FLWingNut

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    Not gonna happen. The first provider to drop ESPN will be committing suicide. Sports drives the TV bus.
     
  3. Sep 14, 2012 #63 of 134
    joshjr

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    I think this is a pretty narrow minded view. One reason I choose DirecTV is that I want a provider that covers all of my needs. DirecTV is the only option that does that. I have a DVR that records 5 shows at once (cant get anywhere else) I have NFL Sunday Ticket (cant get anywhere else) I get all the channels I want, etc. Why would I want to go to the internet and sign up for multiple services to watch the shows? Why would I want to get rid of my DVR that is more convenient for me then watching stuff on the internet? While I agree the internet is an option it is not for everyone. I for one will NOT be leaving DirecTV anytime soon.
     
  4. Sep 14, 2012 #64 of 134
    joshjr

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    Okay so you are comparing a newer TiVo product to DirecTV's oldest HD DVR? That is like comparing the HR34 to the TiVo 10-250. Its just not fair or right. If you had a HR24 and were saying the same things then I might say okay I see where you are coming from. With that old of a HD DVR the box itself might be part of your issues or you could need new cabling. Good luck with your decision. I for one think its an uneducated decision but I do hope it pays off for you.
     
  5. Sep 14, 2012 #65 of 134
    joshjr

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    Thats great, so far if I understand you correctly you will probably have a Netflix account that isnt free, a Hulu account that isnt free, may want some kind of a DVR setup that wont be free at least up front and your talking sports PPV's online. Good luck with that. I will stick with the company that already has all that together and removes the headache from me.
     
  6. Sep 14, 2012 #66 of 134
    joshjr

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    Not to mention how is a new channel ever gonna launch? Hope they can afford for free for a year and that people decide they want to sub.
     
  7. Sep 14, 2012 #67 of 134
    joshjr

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    So a few channels are able to get away with it and you think its practical for all channels to do this? I think not.
     
  8. Sep 14, 2012 #68 of 134
    lokar

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    My point in bringing up HBO is that they are successful and from what I have seen in charts on here only charge $1 or so a month more than ESPN per subscriber to MSOs, yet HBO is its own tier and ESPN is forced on everyone. I fully admit that a lot of smaller channels would probably go out of business under a la carte, but I think there are way too many channels anyway and most all of them have gone to reality crap so it is no big loss. I think a 200 channel world sounds good in theory but has turned out a lot of quantity with little quality in practice.

    I would also like to see DirecTV or some MSO start signing contracts so that if a channel changes its focus i.e. History showing Pawn Stars 24 hours a day that that channel would be in breach of its contract and could be removed immediately.
     
  9. Sep 14, 2012 #69 of 134
    Diana C

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    I of course meant "break even" on top line revenue, not bottom line profits. But since you brought up advertising revenue, if SyFy were suddenly delivered to only 1.2 million homes instead of 98 million, their advertising value would be diminished. While current ad rates are based upon viewer ratings, some shows draw more than the average share, other less. In an a la carte scenario NO show can draw more than the number of subscribers. In other words, that 1.2 million includes occasional viewers that watch SyFy now because it is there, but wouldn't want to pay $16 for it.

    Bottom line, a la carte pricing is a sure fire way to drive at least half, perhaps as much as three quarters, of all currently operating channels into oblivion.

    Here are the top 20 cable channels for 2011, based upon total primetime viewers:

    Code:
    Channel                  Millions of viewers
    1. USA                   3.165
    2. Disney Channel        2.647
    3. ESPN                  2.342
    4. TNT                   2.232
    5. History               1.987
    6. Fox News              1.883
    7. TBS                   1.614 
    8. A&E                   1.561
    9. FX                    1.532 
    10. ABC Family           1.462 
    11. Nick At Nite         1.344 
    12. SyFy                 1.330
    13. Discovery            1.288
    14. Adult Swim           1.237
    15. HGTV                 1.205
    16. MTV                  1.189
    17. AMC                  1.182
    18. Food Network         1.177
    19. Comedy Central       1.006
    20. Bravo                0.926
    If you favorite channel is not on this list, it might not survive in an a la carte world.
     
  10. Sep 14, 2012 #70 of 134
    MarkG21

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    If you really want a la carte pricing (And NOT a sports fan), why not just ditch cable/sat and get an ota antenna for local channels and news and going the iTunes/amazon route and buy your shows individually?

    Am I missing something here?? Is it more complex than that? I can see if you don't have high speed Internet in your area. What other road blocks are there?


    For me, I like direct tv's model. I'm a huge sports fan. Watch espn constantly. (thank you everyone for subsidizing espn and all the other sports channels for me).
     
  11. Sep 14, 2012 #71 of 134
    tonyd79

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    There is a lot of programming not available via streaming yet. Or costs a lot more that way. Or you have to wait for it.
     
  12. Sep 14, 2012 #72 of 134
    Mike Greer

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    I'd agree if not for the ever increasing costs. There is a price point where it just isn't worth what you get. You're obviously willing to pay more and that's great. I just don't put some much value in a few TV channels...
     
  13. Sep 14, 2012 #73 of 134
    Mike Greer

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    Again, I do agree - it just comes down to price. Obvisouly, at least for now, DirecTV is easier.. But for many of us it means paying $25+ per month per channel considering how few channels we watch.

    Your milage may vary!
     
  14. Sep 14, 2012 #74 of 134
    Mike Greer

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    I don't think it is practical for all channels - obviously the bulk of channels can't/wouldn't survive. I'm just saying I'm good with that. Watched any MTV lately? Me either!:lol:
     
  15. Sep 14, 2012 #75 of 134
    Mike Greer

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    Ok, I'll bite - keep these channels and get rid of the rest!:lol:
     
  16. Sep 14, 2012 #76 of 134
    TBoneit

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    1. If there were mass defections rates could not fall. The amount paid to the channels is by contract.

    2. Price per channel would be much higher with A La Carte. No savings there unless you only wanted 2 channels.
     
  17. Sep 14, 2012 #77 of 134
    goinsleeper

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    HBO and sports are not even remotely comparable in this manner. If you live in New York and like the Yankees, chances are you'll see them on local or regional programming. Another large portion of revenue is tickets sold for fans to sit at the game. The more people you allow to watch the game at home, the less money the team makes from tickets. Eventually even the hot dog vendors lose their jobs.

    Now take HBO. They have contracts with studios and do not pay for the creation of 99% of the programming you see. They have costs for their own investments and they do pay the studios for the rights to show their movies but they do not pay the $x millions directly for the filming of those movies.

    HBO is also not governed by the FCC is the same manor as regional sports. The reason for any sports subscription is the ability to get around the FCC. Being on the west coast and wanting to watch an east coast team creates problems with basic programming. Being able to pay for a subscription directly for MLB, NBA, NFL, NHL... is the work-around and is basically the al a carte that you are refering to.

    The overall difference here is HBO is one type of programming(for the most part), movies and original series. Sports is much more vast. What part of the country are you in? What type of sports are you looking for? Is it college, pro or high school? Do you need to pay for the channel or is it on a local affiliate? Even if you pay for the Sunday Ticket, if a game is being shown on your local or regional channel it will be blacked out on the NFL package. This is so the game can be sold twice, once to a channel holder and again to the nation.
     
  18. Sep 14, 2012 #78 of 134
    Diana C

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    Not quite...the game is not being sold, you are. The real business of broadcast television (any channel that runs advertising) is the sale of viewers to advertisers. Your are not the customer, your are the product.
     
  19. Sep 14, 2012 #79 of 134
    goinsleeper

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    Are you differentiating between local affiliate and RSN? Otherwise agreed with the side note that the rights are still sold with the idea of making the money back and then some with advertising costs. If you buy the rights to show a game, your advertising goes up for that selected time. The Superbowl being the obvious example.
     
  20. Sep 14, 2012 #80 of 134
    Diana C

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    Ok, here we go:

    Code:
    Channel                Number of viewers     Monthly Revenue    a la carte Price
                              (millions)           (millions)       (revenue neutral)
    ====================   ===================   =================  =================
    1. USA                 3.165                 $ 48.4              $ 15.30
    2. Disney Channel      2.647                   87.1                32.90
    3. ESPN                2.342                  405.9               172.90
    4. TNT                 2.232                   99.0                44.30
    5. History             1.987                   18.7                 9.40
    6. Fox News            1.883                   59.2                31.50
    7. TBS                 1.614                   48.5                30.00
    8. A&E                 1.561                   15.0                 9.60
    9. FX                  1.532                   40.3                26.30
    10. ABC Family         1.462                   18.1                12.40
    11. Nick At Nite       1.344                   44.9                33.40
    12. SyFy               1.330                   20.6                15.50
    13. Discovery          1.288                   24.3                18.90
    14. Adult Swim         1.237                   16.8                13.60
    15. HGTV               1.205                   13.7                11.40
    16. MTV                1.189                   27.1                22.80
    17. AMC                1.182                   22.3                18.90
    18. Food Network       1.177                    7.9                 6.70
    19. Comedy Central     1.006                   13.7                13.60
    20. Bravo              0.926                   16.7                18.00
                                                                     =========
                                                          Total:      557.40 
    The current Monthly Revenue is calculated using the number of households in which the channel is available (as stated on the channel's website) and the 2009 per subscriber costs (so current revenue is undoubtedly higher now). The a la carte monthly price is rounded to the nearest 10 cents. The AMC numbers do not take into account the loss of Dish Network viewers.

    Obviously, with only 20 channels, the number of viewers for each channel would probably go up. But even if the montly a la carte costs were 25% of the above values, many subscribers would not save much, if any money, at the cost of over 150 channels.

    This idea that a la carte pricing would lower costs is based upon the mistaken assumption that the per subscriber cost would remain what it is today under the current tier model. A la carte pricing simply won't work the way its advocates think it will.
     

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