4 ms·

The networks aren't "double-dipping". Your cable bill pays the cable provider and ads pay the content provider; different organizations, different sources of re

by S201 14y ago

The networks aren't "double-dipping". Your cable bill pays the cable provider and ads pay the content provider; different organizations, different sources of revenue. A much better explanation from a reddit commenter: http://www.reddit.com/r/todayilearned/comments/pz8kz/til_cable_did_not_have_commercials_until_around/c3tgl2g?context=1 http://www.reddit.com/r/todayilearned/comments/pz8kz/til_cab...

res0nat0r 14y ago
It is a bit annoying around here lately that people are being downvoted for stating a fact. Sorry other people don't agree, but it doesn't make what you've cited wrong or not a valid comment.
jrockway 14y ago
The disagreement is that DirectTV isn't paying Viacom enough money. ``Viacom wants more money, specifically, "a fee increase of more than 30 percent, amounting to more than $1 billion in additional costs over five years," according to Bloomberg.'' I'm not complaining about DirectTV charging customers, I'm complaining about Viacom charging DirectTV. If anything, DirectTV should be charging Viacom!
- TeMPOraL 14y ago
  > I'm not complaining about DirectTV charging customers, I'm complaining about Viacom charging DirectTV. If anything, DirectTV should be charging Viacom! But isn't it that DirectTV, cable companies, etc. have expensive infrastructure that is completely worthless without content to put through it? Whereas networks can always go somewhere else, find other ways to deliver their content? It would seem to me that DirectTV is more dependent on Viacom than the other way around - thus comes the direction of money flow.
  - sgk284 14y ago
    UPS doesn't pay Amazon to deliver my goods. Viacom needs the largest audience possible to maximize ad revenue. It simply won't be able to make any content without the viewership. Viacom should be paying DirectTV for building the infrastructure to enable them to have larger viewership, enabling Viacom to have increased ad revenue. In other words, if I own a thousand content websites and monetize them by running my own ad network across them, it would be non-sensical for Google to pay me to use my websites in their index, even though Google would be useless without being able to link to websites.
  - codeka 14y ago
    If what you say is true, then Viacom shouldn't care if DirecTV pulls it's content. But given their retaliation, it seems clear that they do care and the value-add really isn't all that one-way.
mikhael 14y ago
That reddit comment only really clarifies one thing: that the cable provider doesn't pay the network very much. Based on the rest of the comment -- the fact that ads are really what support networks -- it still seems silly for cable/satellite providers to have to pay non-broadcast networks at all.
Retric 14y ago
Yes they are. Cable companies get to overwrite some but not all advertising on a given station. Generally speaking Honda would buy an add from Viacom and your local dealership would buy a separate add on the same channel in a slightly different time-slot from the local cable company. It's setup like this because national brands don't want to deal with all the little cable company's out there, but local company's are willing to pay a premium to get to reach out to local customers. As to satiate TV, they can still do regional advertising if they have multiple satiables just not 'local'. Which actually hurts because 'local' company's have little interest in advertising to the entire east coast.
tptacek 14y ago
This is like the archetypical great long-form Reddit comment. Reddit has a lot of pointless craziness, but their highest highs are also way better than HN's. I'm long since past the point where the words "Great comment explaining this on Reddit" will get me to automatically click something.
- jrockway 14y ago
  FWIW, the critical "97%" number is made up: http://www.reddit.com/r/todayilearned/comments/pz8kz/til_cable_did_not_have_commercials_until_around/c3thsy6?context=1 http://www.reddit.com/r/todayilearned/comments/pz8kz/til_cab...
  - seanalltogether 14y ago
    If this image is accurate, it seems that a basic cable package is probably 1/5 fees to content providers. http://mediamemo.allthingsd.com/files/2010/03/cable-sub-fees.png http://mediamemo.allthingsd.com/files/2010/03/cable-sub-fees...
- etcet 14y ago
  There's actually a subreddit designated for this kind of post, a sort of best-of in-depth comments: http://reddit.com/r/depthhub http://reddit.com/r/depthhub
Terretta 14y ago
The networks are double dipping. The stats in there'd it comment are made up. Over 40% of your cable bill goes to the sports networks alone, which also "double dip" for ads. "... sports channels account for about 40 percent of cable fees..." and you're paying Fox News too whether you watch their ads or not -- http://allthingsd.com/20100308/hate-paying-for-cable-heres-the-reason-why/ http://allthingsd.com/20100308/hate-paying-for-cable-heres-t...
- Terretta 14y ago
  "The stats in the reddit comment..." Looks like that got auto-corrected. Sorry.
- Terretta 14y ago
  "It’s a stupid practice, and the unvarnished greed exhibited by both sides, the channels and cable providers, is astounding." http://www.forbes.com/sites/insertcoin/2012/07/13/battle-royale-between-directv-viacom-dish-and-amc-pushes-tv-closer-to-irrelevancy/ http://www.forbes.com/sites/insertcoin/2012/07/13/battle-roy...
tatsuke95 14y ago
From the Reddit reply: >"They don't want the promise to get paid on Tuesday for an episode shot today." I'm not sure I agree with that. I mean, I agree that's the way it currently works, but not that it couldn't work elsewise: with the show being fully produced, then sold. That's how both music and movies work, as well as the physical manufacture of any product. So I'm not convinced that it's not a viable model for television shows, or out-of-the-ordinary in any way.

by S201 14y ago

res0nat0r 14y ago

It is a bit annoying around here lately that people are being downvoted for stating a fact. Sorry other people don't agree, but it doesn't make what you've cited wrong or not a valid comment.

jrockway 14y ago

The disagreement is that DirectTV isn't paying Viacom enough money. ``Viacom wants more money, specifically, "a fee increase of more than 30 percent, amounting to more than $1 billion in additional costs over five years," according to Bloomberg.'' I'm not complaining about DirectTV charging customers, I'm complaining about Viacom charging DirectTV. If anything, DirectTV should be charging Viacom!

TeMPOraL 14y ago
> I'm not complaining about DirectTV charging customers, I'm complaining about Viacom charging DirectTV. If anything, DirectTV should be charging Viacom! But isn't it that DirectTV, cable companies, etc. have expensive infrastructure that is completely worthless without content to put through it? Whereas networks can always go somewhere else, find other ways to deliver their content? It would seem to me that DirectTV is more dependent on Viacom than the other way around - thus comes the direction of money flow.
- sgk284 14y ago
  UPS doesn't pay Amazon to deliver my goods. Viacom needs the largest audience possible to maximize ad revenue. It simply won't be able to make any content without the viewership. Viacom should be paying DirectTV for building the infrastructure to enable them to have larger viewership, enabling Viacom to have increased ad revenue. In other words, if I own a thousand content websites and monetize them by running my own ad network across them, it would be non-sensical for Google to pay me to use my websites in their index, even though Google would be useless without being able to link to websites.
- codeka 14y ago
  If what you say is true, then Viacom shouldn't care if DirecTV pulls it's content. But given their retaliation, it seems clear that they do care and the value-add really isn't all that one-way.

mikhael 14y ago

That reddit comment only really clarifies one thing: that the cable provider doesn't pay the network very much. Based on the rest of the comment -- the fact that ads are really what support networks -- it still seems silly for cable/satellite providers to have to pay non-broadcast networks at all.

Retric 14y ago

Yes they are. Cable companies get to overwrite some but not all advertising on a given station. Generally speaking Honda would buy an add from Viacom and your local dealership would buy a separate add on the same channel in a slightly different time-slot from the local cable company. It's setup like this because national brands don't want to deal with all the little cable company's out there, but local company's are willing to pay a premium to get to reach out to local customers. As to satiate TV, they can still do regional advertising if they have multiple satiables just not 'local'. Which actually hurts because 'local' company's have little interest in advertising to the entire east coast.

tptacek 14y ago

This is like the archetypical great long-form Reddit comment. Reddit has a lot of pointless craziness, but their highest highs are also way better than HN's. I'm long since past the point where the words "Great comment explaining this on Reddit" will get me to automatically click something.

jrockway 14y ago
FWIW, the critical "97%" number is made up: http://www.reddit.com/r/todayilearned/comments/pz8kz/til_cable_did_not_have_commercials_until_around/c3thsy6?context=1 http://www.reddit.com/r/todayilearned/comments/pz8kz/til_cab...
- seanalltogether 14y ago
  If this image is accurate, it seems that a basic cable package is probably 1/5 fees to content providers. http://mediamemo.allthingsd.com/files/2010/03/cable-sub-fees.png http://mediamemo.allthingsd.com/files/2010/03/cable-sub-fees...
etcet 14y ago
There's actually a subreddit designated for this kind of post, a sort of best-of in-depth comments: http://reddit.com/r/depthhub http://reddit.com/r/depthhub

Terretta 14y ago

The networks are double dipping. The stats in there'd it comment are made up. Over 40% of your cable bill goes to the sports networks alone, which also "double dip" for ads. "... sports channels account for about 40 percent of cable fees..." and you're paying Fox News too whether you watch their ads or not -- http://allthingsd.com/20100308/hate-paying-for-cable-heres-the-reason-why/ http://allthingsd.com/20100308/hate-paying-for-cable-heres-t...

Terretta 14y ago
"The stats in the reddit comment..." Looks like that got auto-corrected. Sorry.
Terretta 14y ago
"It’s a stupid practice, and the unvarnished greed exhibited by both sides, the channels and cable providers, is astounding." http://www.forbes.com/sites/insertcoin/2012/07/13/battle-royale-between-directv-viacom-dish-and-amc-pushes-tv-closer-to-irrelevancy/ http://www.forbes.com/sites/insertcoin/2012/07/13/battle-roy...

tatsuke95 14y ago

From the Reddit reply: >"They don't want the promise to get paid on Tuesday for an episode shot today." I'm not sure I agree with that. I mean, I agree that's the way it currently works, but not that it couldn't work elsewise: with the show being fully produced, then sold. That's how both music and movies work, as well as the physical manufacture of any product. So I'm not convinced that it's not a viable model for television shows, or out-of-the-ordinary in any way.