7 ms·

We're slowly but surely collapsing back to the channel model of content. The bundling the cable services were forcing on us to support ESPN (which accounts for

We're slowly but surely collapsing back to the channel model of content. The bundling the cable services were forcing on us to support ESPN (which accounts for something like $15-20 in your TV bill) and then topping with the a la cart channels (HBO, Showtime, etc). Now, we have a few a la cart providers that stand on their own with original content (in addition to licensed content). My big fear is that the a la cart streaming channels will eventually start running commercials in the manner of Hulu. Throw in ISP bundling of streaming services, and voila, we're back to Cable Television... only since it's on demand, we can't DVR through commercials.

replicatorblog 13y ago
There are a lot of economic breakdowns showing that a la carte pricing doesn't do much to reduce cost. Chris Dixon did a quick breakdown: http://cdixon.org/2012/07/08/how-bundling-benefits-sellers-and-buyers/ http://cdixon.org/2012/07/08/how-bundling-benefits-sellers-a... Also, I'm not sure the fallback to channels is a bad thing. I've been spending a lot of time in the YouTube ecosystem and finding good regular series on a topic is a HUGE challenge. If there was a well curated food channel or educational channel on YouTube I'd pay to subscribe — It's a huge time suck searching, especially using the current tools.
- talmand 13y ago
  The comparison provided in that link doesn't work for me, much for the same reasons someone pointed out in the comments. The conclusion is that bundling benefits both the consumer and the company. The consumer gets both channels cheaper than separately and the company generates more revenue even with cheaper pricing per channel. This completely ignores the fact that I don't want the sports channel AT ALL. Therefore, instead of paying $11.70 for both channels, I'm paying $9 for the one I truly want. Now expand that over hundreds of channels, including the dozens of sports channels I don't want, and let's see how it breaks down. From the current lineup of channels that I saw the last time I looked I would expect I would only want at most a dozen channels. Compare that to the amount I currently pay would be of huge benefit to the cable company because currently I pay nothing for cable TV as I'm a cord cutter. I haven't paid for cable TV in three years because of their stupid bundling pricing, how did that benefit the company?
  - czr80 13y ago
    It doesn't matter that you don't want the sports channel, if you think it does then you haven't understood the economics argument. You're also an exception, and if the cable company tried to optimise for you (today) they would lose much much more than they would gain.
    - talmand 13y ago
      You are quite correct and I understand the economics of bundling. But that's why I stated the comparison didn't work for me. But one day they will have to optimize for people like me because the group is growing and things suggest it will continue. It may take a while but it's inevitable, as you seem to agree with in your "today" comment. Let it take a while, I'm quite happy with the current arrangement of me not paying any money for cable TV.
      - czr80 13y ago
        I'm curious: Is Spotify the future or iTunes?
        talmand 13y ago
        Why not both?
  - pbreit 13y ago
    Your 12 channels cost $100. My 300 channels (which includes your 12) cost $100. Is that really what you want? For a product with zero marginal costs, this is entirely plausible (in fact, required).
    - talmand 13y ago
      No, if that's the cost of my 12 channels then I will continue to say no thanks. Currently I get nothing, save my $100, and I'm quite content with that. I'm not sure I agree with your last point though. Because it seems the cable TV industry's idea is that the only thing to do is to increase costs for their customers over time regardless of the quality of the product. I stipulate that the quality of cable TV has gotten worse over the years even with the 300 channels they now offer. You're just paying more and more for low-quality noise you never watch.
talmand 13y ago
While true, I'm more hopeful for the market to deal with that as it is much easier for a competitor to show up vying for your entertainment dollars since they don't have to compete on the infrastructure level. With the cable companies you often had no competitor to switch to until the satellite options gained popularity, but they quickly turned into the same as the cable providers because there wasn't much competition on that front. Just like laying cable, it costs money to launch satellites. On the other hand, a direct competitor to Netflix is much easier to pull off as there's no cable to lay nor satellites to launch. What I would worry over is if a company like Netflix starts pushing for exclusivity in certain markets using local laws much like how the cable companies obtained their stranglehold on their markets. I don't see how such a thing could be done but never underestimate money and lawyers.
liquidcool 13y ago
I share your fear of commercials. Last I checked, Hulu didn't even offer a paid version that's commercial free. I wonder if that's due to contractual obligations, or that without commercials the price would be too high to bother. Considering Netflix is able to do it, I'm assuming it's contractual, which is a shame. I'd definitely pay extra for commercial free (and 1080P).
- gte910h 13y ago
  They do a completely different thing than netflix: Super fresh episodes a day later. Netflix is the equivalent of watching last seasons DVD release. I can't see netflix having even 1/5th the cost per episode hulu does.
  - talmand 13y ago
    That's the thing I've never understood about the complaint of commercials on Hulu. Hulu is not the exact same service as Netflix and never has been. Hulu provides TV shows almost immediately after airtime and I can understand that something may have to be done to offset the increased costs of doing that. Amazon offers a similar service where you can purchase an episode for many shows the day after airtime. Even though I have an Amazon Prime account I still have to pay extra to see the show immediately even though that very same episode will likely be free in the future because of the Prime account. Hulu is doing the same thing, instead of you paying extra you watch commercials. And yet, no one seems to complain over Amazon's model even though it is essentially the same thing.
    - gte910h 13y ago
      I didn't even know amazon got videos that quickly. Interesting
      - talmand 13y ago
        Yes, I got the season's pass for both Walking Dead and Breaking Bad so that's how we've kept up on them. I'm not sure how many shows they do this with.
maratd 13y ago
> we're back to Cable Television This will never happen, for the simple reason that you have choice and as a result, competition. You can choose Netflix, Hulu, Amazon Prime, or any of the smaller ones. Netflix gets commercials? It will literally take a few clicks to switch to Amazon. All 3 get commercials? Watch competition sprout. That's the beauty of the Internet. Barriers to entry are significantly less than in the real world, which allows for competition to flourish. There is literally nothing stopping you from starting your own streaming service. Most of the technology is proven and widely available. And, of course, anybody can license content. This is universal and required by law.
- Thrymr 13y ago
  > This will never happen, for the simple reason that you have choice and as a result, competition. You can choose Netflix, Hulu, Amazon Prime, or any of the smaller ones. You will not have choice with regards to exclusive content. If you want to watch Arrested Development (season 4) you will need to be on Netflix, if you want to watch Zombieland you will need Amazon Prime. Just like the networks where HBO, ESPN, etc. have exclusive rights to their content.
- mbreese 13y ago
  What are you talking about? Of course it will happen. The only way you can have true competition in the way you suggest is if all providers have the same content. When we start getting Netflix producing shows A, B, and C, and Amazon Prime producing X, Y, and Z, if you want to watch only A and Z, you are stuck paying for both services. It might not be as bad as paying for 200 channels when you only watch 3, but it's still the same model - just at a different scale.
  - maratd 13y ago
    > you are stuck paying for both services. No, I'm stuck using thepiratebay.org and when they get tired of losing revenue, they'll start sharing the content. Piracy is most certainly a force to be considered here and it can actually nudge the players toward a more competitive position where they're not hoarding content.
julianozen 13y ago
idk. I feel like we're more likely to see the cable companies become more digital than collapse. What's more likely to happen first? Some Microsoft, Google or Apple is able to offer a bunch of TV over IP channels as an tangential part of their business, or some cable company like Comcast or Time Warner will get the rights to run all its channels, or even individual streaming shows to a roku or iPad. I think it'll be much easier in this circumstance for Comcast or Time Warner will be able to adopt their business (not their prices) before a tech companies will be able to license the content deals for cheap

replicatorblog 13y ago

There are a lot of economic breakdowns showing that a la carte pricing doesn't do much to reduce cost. Chris Dixon did a quick breakdown: http://cdixon.org/2012/07/08/how-bundling-benefits-sellers-and-buyers/ http://cdixon.org/2012/07/08/how-bundling-benefits-sellers-a... Also, I'm not sure the fallback to channels is a bad thing. I've been spending a lot of time in the YouTube ecosystem and finding good regular series on a topic is a HUGE challenge. If there was a well curated food channel or educational channel on YouTube I'd pay to subscribe — It's a huge time suck searching, especially using the current tools.

talmand 13y ago
The comparison provided in that link doesn't work for me, much for the same reasons someone pointed out in the comments. The conclusion is that bundling benefits both the consumer and the company. The consumer gets both channels cheaper than separately and the company generates more revenue even with cheaper pricing per channel. This completely ignores the fact that I don't want the sports channel AT ALL. Therefore, instead of paying $11.70 for both channels, I'm paying $9 for the one I truly want. Now expand that over hundreds of channels, including the dozens of sports channels I don't want, and let's see how it breaks down. From the current lineup of channels that I saw the last time I looked I would expect I would only want at most a dozen channels. Compare that to the amount I currently pay would be of huge benefit to the cable company because currently I pay nothing for cable TV as I'm a cord cutter. I haven't paid for cable TV in three years because of their stupid bundling pricing, how did that benefit the company?
- czr80 13y ago
  It doesn't matter that you don't want the sports channel, if you think it does then you haven't understood the economics argument. You're also an exception, and if the cable company tried to optimise for you (today) they would lose much much more than they would gain.
  - talmand 13y ago
    You are quite correct and I understand the economics of bundling. But that's why I stated the comparison didn't work for me. But one day they will have to optimize for people like me because the group is growing and things suggest it will continue. It may take a while but it's inevitable, as you seem to agree with in your "today" comment. Let it take a while, I'm quite happy with the current arrangement of me not paying any money for cable TV.
    - czr80 13y ago
      I'm curious: Is Spotify the future or iTunes?
      - talmand 13y ago
        Why not both?
- pbreit 13y ago
  Your 12 channels cost $100. My 300 channels (which includes your 12) cost $100. Is that really what you want? For a product with zero marginal costs, this is entirely plausible (in fact, required).
  - talmand 13y ago
    No, if that's the cost of my 12 channels then I will continue to say no thanks. Currently I get nothing, save my $100, and I'm quite content with that. I'm not sure I agree with your last point though. Because it seems the cable TV industry's idea is that the only thing to do is to increase costs for their customers over time regardless of the quality of the product. I stipulate that the quality of cable TV has gotten worse over the years even with the 300 channels they now offer. You're just paying more and more for low-quality noise you never watch.

talmand 13y ago

While true, I'm more hopeful for the market to deal with that as it is much easier for a competitor to show up vying for your entertainment dollars since they don't have to compete on the infrastructure level. With the cable companies you often had no competitor to switch to until the satellite options gained popularity, but they quickly turned into the same as the cable providers because there wasn't much competition on that front. Just like laying cable, it costs money to launch satellites. On the other hand, a direct competitor to Netflix is much easier to pull off as there's no cable to lay nor satellites to launch. What I would worry over is if a company like Netflix starts pushing for exclusivity in certain markets using local laws much like how the cable companies obtained their stranglehold on their markets. I don't see how such a thing could be done but never underestimate money and lawyers.

liquidcool 13y ago

I share your fear of commercials. Last I checked, Hulu didn't even offer a paid version that's commercial free. I wonder if that's due to contractual obligations, or that without commercials the price would be too high to bother. Considering Netflix is able to do it, I'm assuming it's contractual, which is a shame. I'd definitely pay extra for commercial free (and 1080P).

gte910h 13y ago
They do a completely different thing than netflix: Super fresh episodes a day later. Netflix is the equivalent of watching last seasons DVD release. I can't see netflix having even 1/5th the cost per episode hulu does.
- talmand 13y ago
  That's the thing I've never understood about the complaint of commercials on Hulu. Hulu is not the exact same service as Netflix and never has been. Hulu provides TV shows almost immediately after airtime and I can understand that something may have to be done to offset the increased costs of doing that. Amazon offers a similar service where you can purchase an episode for many shows the day after airtime. Even though I have an Amazon Prime account I still have to pay extra to see the show immediately even though that very same episode will likely be free in the future because of the Prime account. Hulu is doing the same thing, instead of you paying extra you watch commercials. And yet, no one seems to complain over Amazon's model even though it is essentially the same thing.
  - gte910h 13y ago
    I didn't even know amazon got videos that quickly. Interesting
    - talmand 13y ago
      Yes, I got the season's pass for both Walking Dead and Breaking Bad so that's how we've kept up on them. I'm not sure how many shows they do this with.

maratd 13y ago

> we're back to Cable Television This will never happen, for the simple reason that you have choice and as a result, competition. You can choose Netflix, Hulu, Amazon Prime, or any of the smaller ones. Netflix gets commercials? It will literally take a few clicks to switch to Amazon. All 3 get commercials? Watch competition sprout. That's the beauty of the Internet. Barriers to entry are significantly less than in the real world, which allows for competition to flourish. There is literally nothing stopping you from starting your own streaming service. Most of the technology is proven and widely available. And, of course, anybody can license content. This is universal and required by law.

Thrymr 13y ago
> This will never happen, for the simple reason that you have choice and as a result, competition. You can choose Netflix, Hulu, Amazon Prime, or any of the smaller ones. You will not have choice with regards to exclusive content. If you want to watch Arrested Development (season 4) you will need to be on Netflix, if you want to watch Zombieland you will need Amazon Prime. Just like the networks where HBO, ESPN, etc. have exclusive rights to their content.
mbreese 13y ago
What are you talking about? Of course it will happen. The only way you can have true competition in the way you suggest is if all providers have the same content. When we start getting Netflix producing shows A, B, and C, and Amazon Prime producing X, Y, and Z, if you want to watch only A and Z, you are stuck paying for both services. It might not be as bad as paying for 200 channels when you only watch 3, but it's still the same model - just at a different scale.
- maratd 13y ago
  > you are stuck paying for both services. No, I'm stuck using thepiratebay.org and when they get tired of losing revenue, they'll start sharing the content. Piracy is most certainly a force to be considered here and it can actually nudge the players toward a more competitive position where they're not hoarding content.

julianozen 13y ago

idk. I feel like we're more likely to see the cable companies become more digital than collapse. What's more likely to happen first? Some Microsoft, Google or Apple is able to offer a bunch of TV over IP channels as an tangential part of their business, or some cable company like Comcast or Time Warner will get the rights to run all its channels, or even individual streaming shows to a roku or iPad. I think it'll be much easier in this circumstance for Comcast or Time Warner will be able to adopt their business (not their prices) before a tech companies will be able to license the content deals for cheap