7 ms·

Why are there ads on cable tv? Why can't they just charge tv subscribers the whole amount and get rid of ads on tv? If netflix can do it, why can't tv do the sa

by Joeri 10y ago

Why are there ads on cable tv? Why can't they just charge tv subscribers the whole amount and get rid of ads on tv? If netflix can do it, why can't tv do the same?

nerfhammer 10y ago
Cable originally didn't have ads. They just discovered they could put ads in and nobody cancelled their subscriptions.
- rchowe 10y ago
  This is actually a common myth. Cable initially was a service where the feed for certain terrestrial broadcast stations was transmitted over a cable for users who could not receive a clear signal. Since the same feed was used, it had the ads the broadcast affiliate put into it.
- gozur88 10y ago
  The original microwave pay channels didn't have commercials. But cable always did.
- sametmax 10y ago
  Which basically means it's the consummer fault again. I mean, yes, they are evil. But just like disease, it's useless to blame it. There will always be diseases. It's our responsibility to cure current ones and create environments to avoid future ones. Which means for businesses, if you want them to stop misbehave, you should stop rewarding them when they do. Just like in politics. Which amazingly we don't do.
  - HeavenBanned 10y ago
    Old habits die hard. Why cancel a cushy $10 Netflix subscription when 1 ad pops up every session? A year later Why cancel a cushy $12 Netflix subscription when 5 ads pop up every session? 5 years later Why cancel a cushy $20 Netflix subscription when 10 ads pop up every session? Do you see where this is going? Ad and subscription creep is a very real thing, and consumer will not "protest" because behaving is so easy when they betray your trust an inch at a time.
  - FatalBaboon 10y ago
    Especially in a capitalistic world, I believe this is paramount. Oh you don't like google and facebook eventually abusing what they know about you? Don't use their services.
    - sametmax 10y ago
      In a capitalistic world, the bank note is a vote bulletin. The only one that is always listened to, and that you can use every day, on every topic. And also the one they don't teach you about in school.
matthuggins 10y ago
They can, but they don't want to remove revenue streams when enough people are willing to pay for it.
- josefresco 10y ago
  This. Why kill a revenue stream (from business), and piss off another stream (consumers) by raising prices?
joezydeco 10y ago
What does "the whole amount" mean? Think about what your local cable company charges for HBO. They have no advertising and programming is pretty good. Back in the day it was $20/month, now it's something close to $10/mo, right? What would your cable bill look like if every single channel was $10/month?
- rossjudson 10y ago
  I just navigated through Apple's maze to cancel my HBO subscription. I realized that, after months had gone by, it just represented a crap value next to Netflix.
  - chime 10y ago
    I find HBO shows equal or better in quality than the best Netflix shows. Westworld was fantastic. My wife and I just started watching The Young Pope. In a few months GoT and SV will be back on. HBO is learning from Netflix and coming out with some fantastic shows. I also like catching recent movies on HBO before they show up on Netflix, Amazon Prime etc. Of course, Netflix is well worth the subscription and if you don't watch a lot of TV, it has enough content to keep you entertained for a while. But I've noticed that I discuss HBO shows more with my friends/family than Netflix ones.
    - nindalf 10y ago
      I live in a part of the world where the opposite is true. The Netflix catalogue of originals is there but apart from that its pretty weak. Not value for money at $8/mo. On the other hand there is a legit service that gives me the sports I'm interested in (minus basketball), all HBO shows and recent movies at $3/mo. I'm canceling my subscription to Netflix for now because I find I don't actually spend any time watching it.
      - ghaff 10y ago
        Even in the US, Netflix is for watching their originals plus a pretty good back catalog of TV shows. If you're looking for anything else, it's a bonus if they happen to have it but you shouldn't really count on it. A former Netflix tech guy once told me that "People get Netflix for the movies and stay for the TV shows." Though that's probably less true than it used to be given Netflix Originals and a pretty wide recognition that their streaming movie catalog is limited. Today it's probably the Originals that drive the purchasing (as with HBO).
tn13 10y ago
Legacy and entrenched interests. Cable services have optimized their process to call and convert users instead of offering them something useful. TV is often bundled with internet and you are charged extra without you explictly asking for it.
JoshTriplett 10y ago
> Why can't they just charge tv subscribers the whole amount The secret is that there's no "whole amount", because that would imply the concept of "enough money". There's no such thing as "enough money". I mean that entirely non-sarcastically; to the extent it doesn't go to cover their costs, it goes to increase their profit, which has no upper bound. If they've found a way to extract more money, they'll do it. They question then becomes "to what extent have they found a larger revenue stream, and to what extent have they obtained more money now by alienating customers and driving them to other services".
- Bombthecat 10y ago
  I expect from Netflix no less. As soon the growth phase is over. They will turn to ads.
  - thomasz 10y ago
    In that case, I'm dead sure that a lot of their customers will return to piracy.
    - hkmurakami 10y ago
      How many is a lot? If the proportion of revenue increase outweighs subscriber loss, it's still worth inserting ads.
      - Freak_NL 10y ago
        Only if all competitors did the same. Unlike cable or terrestrial broadcast television, with Netflix the consumer has choice and can simply go to a competitor (this includes piracy). If Netflix starts experimenting with advertisements, they will give competitors a chance to move in on the subscribers that won't stand for it. Losing subscribers is fine if they don't go anywhere else (because they can't), but losing subscribers to a competitor is a risky move.
  - JoshTriplett 10y ago
dragonwriter 10y ago
> Why are there ads on cable tv? To pay the bills. > Why can't they just charge tv subscribers the whole amount and get rid of ads on tv? That's what premium channels (HBO, Cinemax, etc.) do, and they appeal to a different audience than non-premium cable, because most people are more willing to accept the cost of advertising than the cost of paying for premium channels.
daemin 10y ago
In Australia when pay/cable TV first came in it was ad free, but then ads were slowly added to it, first just ads for content on the channel, but then normal ads came in. People were rightly angry about this because they thought that by paying for TV they could skip the ads. However it turned out that by paying for TV they were signaling to advertisers that they were better off (and willing to spend money for things) than regular free-to-air TV watching people, and therefore their eyeballs were worth more. So now pay/cable TV in Australia has more ads per hour than free to air TV.
candiodari 10y ago
https://ir.netflix.com/common/download/download.cfm?companyid=NFLX&fileid=924418&filekey=1AB3E1F3-4D15-43E2-AB25-330CAF92E993&filename=Consolidated_Balance_Sheet.xlsx https://ir.netflix.com/common/download/download.cfm?companyi... Look at the bottom line. Netflix lost 126 million dollars in 3 months. Revenue per user is negative and going down. Needless to say, this can't last. Either price more than doubles, or ads come.
- dpark 10y ago
  I don't understand what you're reading that's different from what I'm reading. Where do you get this 126 million dollar loss? Netflix reported net income of $66.7MM for the quarter and $186.7MM for the year. [1] And how could revenue per user be negative? Even if Netflix were burning cash they wouldn't have negative revenue. [1 (xlsx)] http://files.shareholder.com/downloads/NFLX/3717249512x0x924401/FE69AB43-B923-4CAB-AB31-E538EC6BAE47/Earnings_Tables_1.17.16.xlsx http://files.shareholder.com/downloads/NFLX/3717249512x0x924...

by Joeri 10y ago

Why are there ads on cable tv? Why can't they just charge tv subscribers the whole amount and get rid of ads on tv? If netflix can do it, why can't tv do the same?

nerfhammer 10y ago

Cable originally didn't have ads. They just discovered they could put ads in and nobody cancelled their subscriptions.

rchowe 10y ago
This is actually a common myth. Cable initially was a service where the feed for certain terrestrial broadcast stations was transmitted over a cable for users who could not receive a clear signal. Since the same feed was used, it had the ads the broadcast affiliate put into it.
gozur88 10y ago
The original microwave pay channels didn't have commercials. But cable always did.
sametmax 10y ago
Which basically means it's the consummer fault again. I mean, yes, they are evil. But just like disease, it's useless to blame it. There will always be diseases. It's our responsibility to cure current ones and create environments to avoid future ones. Which means for businesses, if you want them to stop misbehave, you should stop rewarding them when they do. Just like in politics. Which amazingly we don't do.
- HeavenBanned 10y ago
  Old habits die hard. Why cancel a cushy $10 Netflix subscription when 1 ad pops up every session? A year later Why cancel a cushy $12 Netflix subscription when 5 ads pop up every session? 5 years later Why cancel a cushy $20 Netflix subscription when 10 ads pop up every session? Do you see where this is going? Ad and subscription creep is a very real thing, and consumer will not "protest" because behaving is so easy when they betray your trust an inch at a time.
- FatalBaboon 10y ago
  Especially in a capitalistic world, I believe this is paramount. Oh you don't like google and facebook eventually abusing what they know about you? Don't use their services.
  - sametmax 10y ago
    In a capitalistic world, the bank note is a vote bulletin. The only one that is always listened to, and that you can use every day, on every topic. And also the one they don't teach you about in school.

matthuggins 10y ago

They can, but they don't want to remove revenue streams when enough people are willing to pay for it.

josefresco 10y ago
This. Why kill a revenue stream (from business), and piss off another stream (consumers) by raising prices?

joezydeco 10y ago

What does "the whole amount" mean? Think about what your local cable company charges for HBO. They have no advertising and programming is pretty good. Back in the day it was $20/month, now it's something close to $10/mo, right? What would your cable bill look like if every single channel was $10/month?

rossjudson 10y ago
I just navigated through Apple's maze to cancel my HBO subscription. I realized that, after months had gone by, it just represented a crap value next to Netflix.
- chime 10y ago
  I find HBO shows equal or better in quality than the best Netflix shows. Westworld was fantastic. My wife and I just started watching The Young Pope. In a few months GoT and SV will be back on. HBO is learning from Netflix and coming out with some fantastic shows. I also like catching recent movies on HBO before they show up on Netflix, Amazon Prime etc. Of course, Netflix is well worth the subscription and if you don't watch a lot of TV, it has enough content to keep you entertained for a while. But I've noticed that I discuss HBO shows more with my friends/family than Netflix ones.
  - nindalf 10y ago
    I live in a part of the world where the opposite is true. The Netflix catalogue of originals is there but apart from that its pretty weak. Not value for money at $8/mo. On the other hand there is a legit service that gives me the sports I'm interested in (minus basketball), all HBO shows and recent movies at $3/mo. I'm canceling my subscription to Netflix for now because I find I don't actually spend any time watching it.
    - ghaff 10y ago
      Even in the US, Netflix is for watching their originals plus a pretty good back catalog of TV shows. If you're looking for anything else, it's a bonus if they happen to have it but you shouldn't really count on it. A former Netflix tech guy once told me that "People get Netflix for the movies and stay for the TV shows." Though that's probably less true than it used to be given Netflix Originals and a pretty wide recognition that their streaming movie catalog is limited. Today it's probably the Originals that drive the purchasing (as with HBO).

tn13 10y ago

Legacy and entrenched interests. Cable services have optimized their process to call and convert users instead of offering them something useful. TV is often bundled with internet and you are charged extra without you explictly asking for it.

JoshTriplett 10y ago

> Why can't they just charge tv subscribers the whole amount The secret is that there's no "whole amount", because that would imply the concept of "enough money". There's no such thing as "enough money". I mean that entirely non-sarcastically; to the extent it doesn't go to cover their costs, it goes to increase their profit, which has no upper bound. If they've found a way to extract more money, they'll do it. They question then becomes "to what extent have they found a larger revenue stream, and to what extent have they obtained more money now by alienating customers and driving them to other services".

Bombthecat 10y ago
I expect from Netflix no less. As soon the growth phase is over. They will turn to ads.
- thomasz 10y ago
  In that case, I'm dead sure that a lot of their customers will return to piracy.
  - hkmurakami 10y ago
    How many is a lot? If the proportion of revenue increase outweighs subscriber loss, it's still worth inserting ads.
    - Freak_NL 10y ago
      Only if all competitors did the same. Unlike cable or terrestrial broadcast television, with Netflix the consumer has choice and can simply go to a competitor (this includes piracy). If Netflix starts experimenting with advertisements, they will give competitors a chance to move in on the subscribers that won't stand for it. Losing subscribers is fine if they don't go anywhere else (because they can't), but losing subscribers to a competitor is a risky move.
- JoshTriplett 10y ago

dragonwriter 10y ago

> Why are there ads on cable tv? To pay the bills. > Why can't they just charge tv subscribers the whole amount and get rid of ads on tv? That's what premium channels (HBO, Cinemax, etc.) do, and they appeal to a different audience than non-premium cable, because most people are more willing to accept the cost of advertising than the cost of paying for premium channels.

daemin 10y ago

In Australia when pay/cable TV first came in it was ad free, but then ads were slowly added to it, first just ads for content on the channel, but then normal ads came in. People were rightly angry about this because they thought that by paying for TV they could skip the ads. However it turned out that by paying for TV they were signaling to advertisers that they were better off (and willing to spend money for things) than regular free-to-air TV watching people, and therefore their eyeballs were worth more. So now pay/cable TV in Australia has more ads per hour than free to air TV.

candiodari 10y ago

https://ir.netflix.com/common/download/download.cfm?companyid=NFLX&fileid=924418&filekey=1AB3E1F3-4D15-43E2-AB25-330CAF92E993&filename=Consolidated_Balance_Sheet.xlsx https://ir.netflix.com/common/download/download.cfm?companyi... Look at the bottom line. Netflix lost 126 million dollars in 3 months. Revenue per user is negative and going down. Needless to say, this can't last. Either price more than doubles, or ads come.

dpark 10y ago
I don't understand what you're reading that's different from what I'm reading. Where do you get this 126 million dollar loss? Netflix reported net income of $66.7MM for the quarter and $186.7MM for the year. [1] And how could revenue per user be negative? Even if Netflix were burning cash they wouldn't have negative revenue. [1 (xlsx)] http://files.shareholder.com/downloads/NFLX/3717249512x0x924401/FE69AB43-B923-4CAB-AB31-E538EC6BAE47/Earnings_Tables_1.17.16.xlsx http://files.shareholder.com/downloads/NFLX/3717249512x0x924...