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I was responding to this bit: >Password sharing is a symptom of cable companies inability (or indifference) to innovate on either content or price Because vid
by xadhominemx 9y ago
I was responding to this bit:
>Password sharing is a symptom of cable companies inability (or indifference) to innovate on either content or price
Because video is barely profitable and HSD is very profitable, cable companies definitely do not like to sell TV as much as they like to sell HSD. Cord cutting is not as big a deal for the cable companies' profitability as most people think. If anything, the bandwidth required for streaming (now in HD but soon in 4k and then in VR) is so high DSL becomes less viable as a competitor and cable companies can raise prices for HSD even faster.
- rco8786 9y agoby "content" I was mostly referring to how that content is packaged and delivered. Cable customers are paying huge premiums for channels they don't want but have no other choice.
- xadhominemx 9y agoThat is by the design of the content providers
- ankushnarula 9y agoThis is mostly correct. For cable/satellite/OTT, most of the package (Viacom, Time Warner, NBCUniversal, etc) content providers bundle content and get a large lump sum up-front per annum from each distributor. However, premium a la carte content providers (HBO, Showtime, etc) receive a small lump sum plus a a bulk of the per subscription fee. For Netflix, Hulu, and Amazon Prime - content is bundled and paid for up-front per annum on a multi-year contract. For example, Paramount/MGM/Lionsgate/EPIX distributed solely through Netflix thru 2014 and then switched sole distribution to Amazon Prime. Hollywood traditionally likes cash up front because production and marketing costs are "bursty" rather than evenly distributed. And this is because the success to failure rate (risk) of entertainment products is too abysmal to easily obtain reasonable financing rates from lenders or reasonable terms from investors.