Let me be the first to admit I was wrong, a la carte *cable is coming sooner than later - *Sorta

[Millhouse]

You don't think Stern has sat in a room with execs and run some numbers on delivering content straight to the internet through a subscription service rather than be bundled via satellite radio? C'mon.

Content makers that have consumers - will always work towards getting more consumers and more money. The pressure on the delivery systems (cable, newspapers, radio) to give them more consumers and more money is hamstrung by an antiquated delivery system. Change or die.

EDIT: and no I don't think the government should get involved - unless the consumer is getting screwed so bad that they need to.

Huh? of course they've analyzed it.

they don't offer stern alone because the fixed costs of the satellites is high and the marginal cost of delivering more than just stern stations is low . the cost of getting just stern will be very high compared to the price of a bundle, so everyone prefers a bundle

my point is that no one gets up in arms about that bundle or any of the other bundles of goods with high fixed costs and low marginal costs, only cable.

amusement parks, chinese buffets, microsoft office, i can keep going

 

[Millhouse]

CBS ala carte 5.99 a month without live sports

http://www.cbsnews.com/news/cbs-launches-digital-subscription-service-cbs-all-access/

ala carte is not going to be cheap

 

[cuseinchina]

people might want to buy just stern and not the rest of the satellite radio. should john mccain get involved in that? you don't have that choice

there are many many alternatives to satellite radio that are not beholden to a bundling model. Stern is choosing to sell his content via that distribution channel, that is his right.

With satellite radio they are trying to earn a return on their very expensive satellites. With cable they are making oligopoly profits on equipment that is out of date and has been paid for many times over.

 

[Millhouse]

there are many many alternatives to satellite radio that are not beholden to a bundling model. Stern is choosing to sell his content via that distribution channel, that is his right.

With satellite radio they are trying to earn a return on their very expensive satellites. With cable they are making oligopoly profits on equipment that is out of date and has been paid for many times over.

there are many alternatives to every kind of bundle. plenty of ways to watch things on your tv

 

[Phillymoose]

Huh? of course they've analyzed it.

they don't offer stern alone because the fixed costs of the satellites is high and the marginal cost of delivering more than just stern stations is low . the cost of getting just stern will be very high compared to the price of a bundle, so everyone prefers a bundle

my point is that no one gets up in arms about that bundle or any of the other bundles of goods with high fixed costs and low marginal costs, only cable.

amusement parks, chinese buffets, microsoft office, i can keep going

The fixed costs of distribution are actually quite low. The fixed costs of using an antiquated distribution channel is definitely very high. There was a time and place for such distribution, but it has passed.

As the content creators come to realize it, the momentum of change will accelerate. Right now Stern's calculus tells him to stay put. The moment that spreadsheet produces a different result, he's gone. And the results of that spreadsheet are slowly evolving with every passing day towards his departure.

 

[OttosBestFriend]

Here's what I fear most with a la carte: lots of good niche fictional programming will never get made.

Take something like AMC's Breaking Bad. Here is one of the best shows in the history of television that launched on a fringe cable channel and got higher ratings with each subsequent season. Through word of mouth (and because already got AMC in my cable package), I joined the show at the start of season 2. If i didn't have amc, i likely would not have joined in and contributed to it's success. If ratings didn't improve, it likely gets cancelled early in its run.

My biggest fear is that networks will appeal to only whatever will yield the most guaranteed subs and take fewer chances giving us nothing but lowest common denominator shows with laugh tracks like dreck such as "Big Bang Theory" or "2 and a half men."

Interestingly, without the Internet, "Breaking Bad" never makes it as far as it did. Streaming truly made that show the success that it became.

Vince Gilligan said as much at the 2013 Emmy Awards: http://www.businessinsider.com/vince-gilligan-breaking-bad-success-netflix-streaming-sites-2013-9

 

[Millhouse]

The fixed costs of distribution are actually quite low. The fixed costs of using an antiquated distribution channel is definitely very high. There was a time and place for such distribution, but it has passed.

As the content creators come to realize it, the momentum of change will accelerate. Right now Stern's calculus tells him to stay put. The moment that spreadsheet produces a different result, he's gone. And the results of that spreadsheet are slowly evolving with every passing day towards his departure.

of course. just because i think bundling is good for cable companies and cable customers, that doesn't mean that i think cable will last forever.

all i'm trying to get across here is that people buy bundles all the time but cable is the only bundle that gets their goat.

 

[OttosBestFriend]

CBS ala carte 5.99 a month without live sports

http://www.cbsnews.com/news/cbs-launches-digital-subscription-service-cbs-all-access/

Gonna be tough for all those senior citizens to figure out how to stream CBS and not sure AOL dial-up will be able to handle it anyway.

 

[Millhouse]

Gonna be tough for all those senior citizens to figure out how to stream CBS and not sure AOL dial-up will be able to handle it anyway.

going on line will open so many doors for new and exciting programming like CSI macedon and CSI mattydale

 

[TheCusian]

of course. just because i think bundling is good for cable companies and cable customers, that doesn't mean that i think cable will last forever. all i'm trying to get across here is that people buy bundles all the time but cable is the only bundle that gets their goat.

And your points all are valid. Cable gets a bad wrap because too much is bundled for too high a cost. The Internet has changed expectations and cable is too wrapped up in itself to deliver smaller bundles at lower cost. Eventually somebody will offer this content in smaller chunks for a lower price. Bundling still might be a better deal for some families based on viewing habits - but more choice will enable those to make that choice. A choice that is currently being withheld.

 

[TheCusian]

Huh? of course they've analyzed it. they don't offer stern alone because the fixed costs of the satellites is high and the marginal cost of delivering more than just stern stations is low . the cost of getting just stern will be very high compared to the price of a bundle, so everyone prefers a bundle my point is that no one gets up in arms about that bundle or any of the other bundles of goods with high fixed costs and low marginal costs, only cable. amusement parks, chinese buffets, microsoft office, i can keep going

I have never had satellite in my life.

I do have a computer connected to the Internet in my pocket everyday. Satellite is a dying tech just like cable and newspapers.

 

[Millhouse]

And your points all are valid. Cable gets a bad wrap because too much is bundled for too high a cost. The Internet has changed expectations and cable is too wrapped up in itself to deliver smaller bundles at lower cost. Eventually somebody will offer this content in smaller chunks for a lower price. Bundling still might be a better deal for some families based on viewing habits - but more choice will enable those to make that choice. A choice that is currently being withheld.

part of me wishes cable would just pass on the fixed cost and offer really high ala carte prices in the name of choice. people would get it through their head that dividing your bill by the number of channels you watch is not how a cable company will charge you

it can be in customers and companies best interest to not have every possible choice presented to them.

if someone figures out a way to deliver this content with low fixed costs and low marginal costs, then they'll beat cable on price regardless of whether cable bundles or not

 

[cuseinchina]

part of me wishes cable would just pass on the fixed cost and offer really high ala carte prices in the name of choice. people would get it through their head that dividing your bill by the number of channels you watch is not how a cable company will charge you

it can be in customers and companies best interest to not have every possible choice presented to them.

if someone figures out a way to deliver this content with low fixed costs and low marginal costs, then they'll beat cable on price regardless of whether cable bundles or not

That is impossible.

Why? Because once content is unbundled there is no incentive for producers of quality content to pefer the cable company as an aggregator over say Apple or whoever else.

Cable needs to charge enough to make a decent return on their investment in 'the pipe.' If they want to make more money they should improve the pipe. End of story.

The reason they are able to do anything more than get a decent return on their dumb pipe is because they operate in an oligopoly industry.

That industry is on the verge of being disrupted and of course returns will shrink for incumbents. This is very very very good for consumers who benefit from more competition and more choice.

 

[cuseinchina]

part of me wishes cable would just pass on the fixed cost and offer really high ala carte prices in the name of choice. people would get it through their head that dividing your bill by the number of channels you watch is not how a cable company will charge you

it can be in customers and companies best interest to not have every possible choice presented to them.

This is in fact a socialist viewpoint. Give people less choice, have the choice set selected by a government regulated monopolistic inefficient entity, make people subsidize others needs and habits for some sort of greater good, all for a product that sedates the masses.

You better check your libertarian credentials my friend. They are in serious question.

 

[Millhouse]

This is in fact a socialist viewpoint. Give people less choice, have the choice set selected by a government regulated monopolistic inefficient entity, make people subsidize others needs and habits for some sort of greater good, all for a product that sedates the masses.

You better check your libertarian credentials my friend. They are in serious question.

are chinese buffets socialist? is spotify? netflix? amusement parks

no one is made to subsidize anyone. you don't have to buy the bundle. just like you don't have to go to an amusement park that charges you for everything even though you just want to ride the merry go round.

words have meaning

 

[TheCusian]

part of me wishes cable would just pass on the fixed cost and offer really high ala carte prices in the name of choice. people would get it through their head that dividing your bill by the number of channels you watch is not how a cable company will charge you it can be in customers and companies best interest to not have every possible choice presented to them. if someone figures out a way to deliver this content with low fixed costs and low marginal costs, then they'll beat cable on price regardless of whether cable bundles or not

That would be awesome.

Then when ESPN comes out and says: buy our channels for AppleTV for this amount and save over $10 vs what cable offers - customer wins.

Also apart of this equation: if they offered true cost ala carte channel buying - I'd bet it costs extra in some wired fee and I'd need a new box and remote that costs extra. This is why cable companies have a bad wrap. History of wired fees.

 

[IthacaMatt]

The price point is what will be interesting to see. Something tells me you're not going to buy a direct-to-consumer, HBO streaming service for $9.99/month.
The one thing that's not really debatable is that a la carte, while viscerally appealing, will not be the cost saving home run that some think it will. Yes, if all you want is HBO and that costs $29.99/month, then that'll save you from a larger cable bill. .

Scooch, I don't think that HBO will be able to obtain that $30 price point. I think $9.99 is much more likely. You have to remember, people are only paying about $10/month for ALL of the content on Amazon Prime or Netflix.

I think you'll see Showtime follow suit, and ESPN and other live sports programmers, most of whom already have an app. Live sports is the only thing keeping the cable business alive. I predict that in 10 years or less, our current "cable" companies will provide us with broadband service, we will buy our programming ala carte, and nobody will give a damn about having a landline anymore, even if it is in a digital bundle.

 

[Toga]

Scooch, I don't think that HBO will be able to obtain that $30 price point. I think $9.99 is much more likely. You have to remember, people are only paying about $10/month for ALL of the content on Amazon Prime or Netflix.

I think you'll see Showtime follow suit, and ESPN and other live sports programmers, most of whom already have an app. Live sports is the only thing keeping the cable business alive. I predict that in 10 years or less, our current "cable" companies will provide us with broadband service, we will buy our programming ala carte, and nobody will give a damn about having a landline anymore, even if it is in a digital bundle.

What is this landline of which you speak?

 

[cuseinchina]

are chinese buffets socialist? is spotify? netflix? amusement parks

no one is made to subsidize anyone. you don't have to buy the bundle. just like you don't have to go to an amusement park that charges you for everything even though you just want to ride the merry go round.

words have meaning

those things don't have anywhere near the penetration rate that incumbent 'pay tv' operators (cable + satellite) have...they are unfair comparisons. They also have significantly lower price points. The FCC views TV access as a critical basic service. I don't happen to agree with them...but it's certainly signifantly more critical than an amusement park.

 

[Millhouse]

those things don't have anywhere near the penetration rate that incumbent 'pay tv' operators (cable + satellite) have...they are unfair comparisons. They also have significantly lower price points. The FCC views TV access as a critical basic service. I don't happen to agree with them...but it's certainly signifantly more critical than an amusement park.

riiiiiiiight

 

[Longtimesu]

i have no idea if related as to why this may happen...I know so many who have up and cut the cord that I wonder if their bottom lines are being effected enough to allow a la carte to happen. Curious to hear the take from those in the know or semi know.

More people are streaming, using the dvr. Ad budgets are down. I filmed for TV. Now we will be going paid subscribers online. It's the new wave.

 

[Scooch]

Scooch, I don't think that HBO will be able to obtain that $30 price point. I think $9.99 is much more likely. You have to remember, people are only paying about $10/month for ALL of the content on Amazon Prime or Netflix.

I think you'll see Showtime follow suit, and ESPN and other live sports programmers, most of whom already have an app. Live sports is the only thing keeping the cable business alive. I predict that in 10 years or less, our current "cable" companies will provide us with broadband service, we will buy our programming ala carte, and nobody will give a damn about having a landline anymore, even if it is in a digital bundle.

We'll see. I'm just spitballing, honestly. It's not just about what people are paying for Netflix today, but also how much a company like HBO is shelling out to to produce content. I'm skeptical that Netflix, for example, can maintain their $9.99 price point for much longer. Their programming costs are exploding, and anyone who reads their quarterly earnings can tell you how much pressure is being put on their margins. They grew less than 1 million subscribers in the US last quarter, and their stock got crushed.

I think the consumer equation on a la carte changes when you have to pay $75/month for 7 or 8 channels, along with a $60+ broadband bill.

I totally get that if *all* someone wants is Netflix, or HBO, or AMC, or whatever, then the cost may be advantageous. But when you're a family of 4, like mine, who needs a bunch of other channels to satisfy the taste of every member of the household, the a la carte approach may not look so hot.

So this is why I keep saying that we're going to see more proliferation of choice and many additional models for consumers. These declarative statements that no one will by a bundle in a couple years, or that a la carte is going to ensure only high quality programming gets made, are myopic and silly.

 

[IthacaMatt]

What is this landline of which you speak?

You know, the upsell in your Triple Pack service from your cable/telco.

 

[IthacaMatt]

We'll see. I'm just spitballing, honestly. It's not just about what people are paying for Netflix today, but also how much a company like HBO is shelling out to to produce content. I'm skeptical that Netflix, for example, can maintain their $9.99 price point for much longer. Their programming costs are exploding, and anyone who reads their quarterly earnings can tell you how much pressure is being put on their margins. They grew less than 1 million subscribers in the US last quarter, and their stock got crushed.

I think the consumer equation on a la carte changes when you have to pay $75/month for 7 or 8 channels, along with a $60+ broadband bill.

I totally get that if *all* someone wants is Netflix, or HBO, or AMC, or whatever, then the cost may be advantageous. But when you're a family of 4, like mine, who needs a bunch of other channels to satisfy the taste of every member of the household, the a la carte approach may not look so hot.

So this is why I keep saying that we're going to see more proliferation of choice and many additional models for consumers. These declarative statements that no one will by a bundle in a couple years, or that a la carte is going to ensure only high quality programming gets made, are myopic and silly.

Another thing to remember is that certain production companies / networks have multiple channels they control that they could sell in a block. Like the ESPN family of networks, Fox, NBC family of networks, etc. Eventually the Internet is going to become private corporate broadcast networks. History has several channels, so does Discovery networks, etc. I could see them bundled that way very easily.

 

[Toga]

You know, the upsell in your Triple Pack service from your cable/telco.

Exactly. sh**t.