5 ms·

Bundles are often great deals for consumers. The TV bundle is the result of decades of scale, iteration, and the free market. TV has a lot of weaknesses, but I

by rjvir 10y ago

Bundles are often great deals for consumers. The TV bundle is the result of decades of scale, iteration, and the free market. TV has a lot of weaknesses, but I don't think its bundle economics are one of them. The most successful alternatives to TV are also bundles, and the bundling is a critical part of their success. Imagine instead of paying $10/month for Netflix, you had to pay for each show a la carte (like iTunes). That would be worse for consumers - and creators.

ethbro 10y ago
Curious about bundles being an example of the free market at work. How are consumers able to vote with their dollars what channels bundles do and do not include?
- matco11 10y ago
  Well, the answer really is in your question: consumers do vote with their dollars. Except sport and other tv rights are an oligopolistic market (not a free competitive market): this allows cable companies to select bundles not in a way to minimize the cost to the consumer (which would result in you finding the perfect bundle for what you want to watch at the cheapest price), instead they can create bundles to maximize profit for themselves (which results in you having to pay for several bundles in order to get all the content you want).
Retric 10y ago
There is nothing free market about Cable TV. Free markets needs Substitute goods aka BMW vs Audi not ESPN vs Syfy or other matchups where a and b have different consumers. Remember copyright creates monopolies and monopolies are not free markets.
- zerocrates 10y ago
  Pretty much no market in existence is completely "free," but this is a pretty limited view of things. Is there nothing free about the market for software because only Adobe can sell Photoshop? Presumably then there are also no free markets for, well, any type of cultural product. In a sense that's true and Disney is the only game in town for Rogue One, but I'm not sure it's a terribly useful analytical framework. "Monopolies are not free markets" is also an interesting claim on its own.
  - Retric 10y ago
    Ehh, the idea that Monopolies are not free markets, is a fairly well understood separation. "A free market is a system in which the prices for goods and services are determined by the open market and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority." https://en.wikipedia.org/wiki/Free_market https://en.wikipedia.org/wiki/Free_market The idea is Monopolies can extract "Monopoly Rent/Economic Rent" https://en.wikipedia.org/wiki/Economic_rent https://en.wikipedia.org/wiki/Economic_rent at a higher price than normal because competitors don't enter the market and lower prices.
  - lmm 10y ago
    > Is there nothing free about the market for software because only Adobe can sell Photoshop? Presumably then there are also no free markets for, well, any type of cultural product. In a sense that's true and Disney is the only game in town for Rogue One, but I'm not sure it's a terribly useful analytical framework. Rather than a binary it's probably best to think about the extent to which one thing is a substitute for another. Photoshop is a tool, and there's no fundamental reason a competitor couldn't make a program that does the same things; to that extent, there's a free market in image editors. To the extent that there are things that you can't substitute (e.g. plugins that use a photoshop-specific API), there isn't a free market there - it's not black and white, rather there's an extent to which the market approximates a free one. Is Star Trek a substitute for Firefly? To a certain extent yes, but probably less than the Photoshop alternatives. > "Monopolies are not free markets" is also an interesting claim on its own. Huh? That's completely standard, established economics. ("Free market" is an economic term of art that doesn't always mean what it sounds like).
jandrese 10y ago
I really don't see how paying $7/month for a channel I don't watch is a "great deal". The argument is that they would rip you off a lot more with alacarte I guess?
plandis 10y ago
Bundles are fine to me. The big thing is that TV contracts just don't fundamentally work for apartment dwellers. I can't name a single TV provider in my area that doesn't make you sign a contract for several years. So if you need to move apartments you're now paying that hefty cable cancellation fee. It's even worse if they make you sign a 2 year contract since I've yet to find an apartment in Seattle that will even let you sign a 2 year lease.
- techsupporter 10y ago
  I just checked Comcast for my ZIP code (98122) and all of their double play TV+Internet pricing is on one-year contracts ("$69.99/mo for the first 12 months with 1-year agreement"). Also, Wave Broadband (both the cable company "Wave" and the fiber optic company "WaveG") has no contracts and is in parts of Seattle. CenturyLink also does one- and two-year contracts, in my experience. I have a two-year contract for their 1Gbps fiber service because I wanted the price lock and I'm never canceling.
mancerayder 10y ago
The free market? We must live in different markets. Here it's a Yes/No choice, there's only one provider. The bundle economics, designed optimally, reduce consumer choices and drive people to salivate at the possibility of paying for streaming exactly what they want (which is more efficient, if we're obsessed with market jargon).
byuu 10y ago
We're starting to feel the pain a bit with the online unbundled alternatives, sure. Right now, I have Netflix, Hulu, Amazon Prime (mostly for the shipping but it also has some shows I like), Crunchyroll. And I'm still missing things I want, which would require: Funimation, HBO Now, CBS. At that point, I'd be close to my old cable bill again, and still wouldn't have new content from AMC or Showtime. Would also love to have TV Japan, but if you think ESPN gouges you ... that requires satellite TV, the more expensive dish/receiver, and costs $25 a month for just that one channel! I would welcome an ala carte system for shows, but only if they were reasonably priced. Definitely not paying $1 for a completely predictable episode of Modern Family or a "why is this still on the air?" Simpsons episode. But Real Time? Sure. Game of Thrones? I'd happily pay double. I may just start waiting until seasons end, sign up, binge watch a whole season in a month, and cancel. I don't even think music has become reasonably priced yet. Sure it's $1 a song, but you're still paying $15 if you want the album. Even though they no longer have to make a CD, ship it to stores, and give a large markup to the retailer. And the MP3 is way lower quality than the lossless CD. Yet they still want the same price.
digler999 10y ago
are you trolling ? > That would be worse for consumers - and creators. that would be sad if "creators" had to try harder to make better content that made me want to pay for it, you know, like Game of Thrones did.

by rjvir 10y ago

ethbro 10y ago

Curious about bundles being an example of the free market at work. How are consumers able to vote with their dollars what channels bundles do and do not include?

matco11 10y ago
Well, the answer really is in your question: consumers do vote with their dollars. Except sport and other tv rights are an oligopolistic market (not a free competitive market): this allows cable companies to select bundles not in a way to minimize the cost to the consumer (which would result in you finding the perfect bundle for what you want to watch at the cheapest price), instead they can create bundles to maximize profit for themselves (which results in you having to pay for several bundles in order to get all the content you want).

Retric 10y ago

There is nothing free market about Cable TV. Free markets needs Substitute goods aka BMW vs Audi not ESPN vs Syfy or other matchups where a and b have different consumers. Remember copyright creates monopolies and monopolies are not free markets.

zerocrates 10y ago
Pretty much no market in existence is completely "free," but this is a pretty limited view of things. Is there nothing free about the market for software because only Adobe can sell Photoshop? Presumably then there are also no free markets for, well, any type of cultural product. In a sense that's true and Disney is the only game in town for Rogue One, but I'm not sure it's a terribly useful analytical framework. "Monopolies are not free markets" is also an interesting claim on its own.
- Retric 10y ago
  Ehh, the idea that Monopolies are not free markets, is a fairly well understood separation. "A free market is a system in which the prices for goods and services are determined by the open market and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority." https://en.wikipedia.org/wiki/Free_market https://en.wikipedia.org/wiki/Free_market The idea is Monopolies can extract "Monopoly Rent/Economic Rent" https://en.wikipedia.org/wiki/Economic_rent https://en.wikipedia.org/wiki/Economic_rent at a higher price than normal because competitors don't enter the market and lower prices.
- lmm 10y ago
  > Is there nothing free about the market for software because only Adobe can sell Photoshop? Presumably then there are also no free markets for, well, any type of cultural product. In a sense that's true and Disney is the only game in town for Rogue One, but I'm not sure it's a terribly useful analytical framework. Rather than a binary it's probably best to think about the extent to which one thing is a substitute for another. Photoshop is a tool, and there's no fundamental reason a competitor couldn't make a program that does the same things; to that extent, there's a free market in image editors. To the extent that there are things that you can't substitute (e.g. plugins that use a photoshop-specific API), there isn't a free market there - it's not black and white, rather there's an extent to which the market approximates a free one. Is Star Trek a substitute for Firefly? To a certain extent yes, but probably less than the Photoshop alternatives. > "Monopolies are not free markets" is also an interesting claim on its own. Huh? That's completely standard, established economics. ("Free market" is an economic term of art that doesn't always mean what it sounds like).

jandrese 10y ago

I really don't see how paying $7/month for a channel I don't watch is a "great deal". The argument is that they would rip you off a lot more with alacarte I guess?

plandis 10y ago

Bundles are fine to me. The big thing is that TV contracts just don't fundamentally work for apartment dwellers. I can't name a single TV provider in my area that doesn't make you sign a contract for several years. So if you need to move apartments you're now paying that hefty cable cancellation fee. It's even worse if they make you sign a 2 year contract since I've yet to find an apartment in Seattle that will even let you sign a 2 year lease.

techsupporter 10y ago
I just checked Comcast for my ZIP code (98122) and all of their double play TV+Internet pricing is on one-year contracts ("$69.99/mo for the first 12 months with 1-year agreement"). Also, Wave Broadband (both the cable company "Wave" and the fiber optic company "WaveG") has no contracts and is in parts of Seattle. CenturyLink also does one- and two-year contracts, in my experience. I have a two-year contract for their 1Gbps fiber service because I wanted the price lock and I'm never canceling.

mancerayder 10y ago

The free market? We must live in different markets. Here it's a Yes/No choice, there's only one provider. The bundle economics, designed optimally, reduce consumer choices and drive people to salivate at the possibility of paying for streaming exactly what they want (which is more efficient, if we're obsessed with market jargon).

byuu 10y ago

We're starting to feel the pain a bit with the online unbundled alternatives, sure. Right now, I have Netflix, Hulu, Amazon Prime (mostly for the shipping but it also has some shows I like), Crunchyroll. And I'm still missing things I want, which would require: Funimation, HBO Now, CBS. At that point, I'd be close to my old cable bill again, and still wouldn't have new content from AMC or Showtime. Would also love to have TV Japan, but if you think ESPN gouges you ... that requires satellite TV, the more expensive dish/receiver, and costs $25 a month for just that one channel! I would welcome an ala carte system for shows, but only if they were reasonably priced. Definitely not paying $1 for a completely predictable episode of Modern Family or a "why is this still on the air?" Simpsons episode. But Real Time? Sure. Game of Thrones? I'd happily pay double. I may just start waiting until seasons end, sign up, binge watch a whole season in a month, and cancel. I don't even think music has become reasonably priced yet. Sure it's $1 a song, but you're still paying $15 if you want the album. Even though they no longer have to make a CD, ship it to stores, and give a large markup to the retailer. And the MP3 is way lower quality than the lossless CD. Yet they still want the same price.

digler999 10y ago

are you trolling ? > That would be worse for consumers - and creators. that would be sad if "creators" had to try harder to make better content that made me want to pay for it, you know, like Game of Thrones did.