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Because many (most?) of the channels you have are subsidized by the popular channels. Of course, they still sell advertising time.

by EpicEng 13y ago

dragonwriter 13y ago
Okay, now you've got a circular reference of subsidy: you can't argue that WeTV and IFC are both subsidized by AMC proper, and allow AMC to lose money on AMC proper and make it up on WeTV and IFC advertising. Either, (1) WeTV and IFC have sufficient viewership-to-cost to be profitable advertising venues and can help offset losses from AMC proper (in which case, they aren't "unwanted channels" by any meaningful definition), or (2) WeTV and IFC are net money-losing channels without sufficient interested viewership for advertising to pay the bills that are subsidized by AMC, in which case they can't possibly offset losses from AMC proper. Either of these can be true, or neither of them, but not both.
- tg3 13y ago
  You're thinking that the money to be made in cable is in advertising, which couldn't be further from the truth. Advertising dollars are a supplement to subscription dollars. AMC Networks requires that cable providers (Comcast, RCN, Time Warner, DirecTV etc) carry WeTV and IFC at $0.25/subscriber, even though they are unpopular, and carry AMC at $0.75/subscriber. Cable providers pretty much have to comply, so they can get AMC. As a result, AMC Networks makes up losses on AMC proper with subscription revenues from the unwanted channels.
  - dragonwriter 13y ago
    > You're thinking that the money to be made in cable is in advertising No, I'm thinking that the specific claim I was responding to upthread was that AMC lost money on AMC proper, but could afford to make it up because it required cable carriers to carry WeTV and IFC, which were "unwanted programming", but nevertheless made up for AMC proper's losses by advertising sales. I am arguing that that claim is not sound. I am not arguing one way or the other on where the money comes from. > AMC Networks requires that cable providers (Comcast, RCN, Time Warner, DirecTV etc) carry WeTV and IFC at $0.25/subscriber, even though they are unpopular, and carry AMC at $0.75/subscriber. > Cable providers pretty much have to comply, so they can get AMC. As a result, AMC Networks makes up losses on AMC proper with subscription revenues from the unwanted channels. Assuming that that is basically true, then if WeTV and IFC are losing money (before considering subscription fees), then AMC is really just charging $1.25/subscriber for AMC proper (the thing cable cos want) making a profit, and subsidizing WeTV and IFC with it. If the subsidy works the other way, then the bundling works around the fact that what to consumers is actually desirable enough to be profitable isn't what cable cos want for some reason, which is possible if what viewers actually watch and what viewers look for in selecting cable providers are not aligned, but a counterintuitive enough claim that some evidence should be provided for it.

Because many (most?) of the channels you have are subsidized by the popular channels. Of course, they still sell advertising time.

by EpicEng 13y ago

Because many (most?) of the channels you have are subsidized by the popular channels. Of course, they still sell advertising time.

dragonwriter 13y ago

Okay, now you've got a circular reference of subsidy: you can't argue that WeTV and IFC are both subsidized by AMC proper, and allow AMC to lose money on AMC proper and make it up on WeTV and IFC advertising. Either, (1) WeTV and IFC have sufficient viewership-to-cost to be profitable advertising venues and can help offset losses from AMC proper (in which case, they aren't "unwanted channels" by any meaningful definition), or (2) WeTV and IFC are net money-losing channels without sufficient interested viewership for advertising to pay the bills that are subsidized by AMC, in which case they can't possibly offset losses from AMC proper. Either of these can be true, or neither of them, but not both.

tg3 13y ago
You're thinking that the money to be made in cable is in advertising, which couldn't be further from the truth. Advertising dollars are a supplement to subscription dollars. AMC Networks requires that cable providers (Comcast, RCN, Time Warner, DirecTV etc) carry WeTV and IFC at $0.25/subscriber, even though they are unpopular, and carry AMC at $0.75/subscriber. Cable providers pretty much have to comply, so they can get AMC. As a result, AMC Networks makes up losses on AMC proper with subscription revenues from the unwanted channels.
- dragonwriter 13y ago
  > You're thinking that the money to be made in cable is in advertising No, I'm thinking that the specific claim I was responding to upthread was that AMC lost money on AMC proper, but could afford to make it up because it required cable carriers to carry WeTV and IFC, which were "unwanted programming", but nevertheless made up for AMC proper's losses by advertising sales. I am arguing that that claim is not sound. I am not arguing one way or the other on where the money comes from. > AMC Networks requires that cable providers (Comcast, RCN, Time Warner, DirecTV etc) carry WeTV and IFC at $0.25/subscriber, even though they are unpopular, and carry AMC at $0.75/subscriber. > Cable providers pretty much have to comply, so they can get AMC. As a result, AMC Networks makes up losses on AMC proper with subscription revenues from the unwanted channels. Assuming that that is basically true, then if WeTV and IFC are losing money (before considering subscription fees), then AMC is really just charging $1.25/subscriber for AMC proper (the thing cable cos want) making a profit, and subsidizing WeTV and IFC with it. If the subsidy works the other way, then the bundling works around the fact that what to consumers is actually desirable enough to be profitable isn't what cable cos want for some reason, which is possible if what viewers actually watch and what viewers look for in selecting cable providers are not aligned, but a counterintuitive enough claim that some evidence should be provided for it.