[opendtv] Re: Devastating to consumers?

Craig Birkmaier wrote:

> So now FCC Chairman Martin is proposing that any cable channel
> with a subscriber fee above $0.75 -$1 per month would have to
> be offered ala carte. Predictably the cable industry is upset
> and predicting that consumers would be outraged by the
> imposition of this requirement.
>
> They even go so far as to say that this would be "devastating"
> to consumers.
>
> Can someone explain why it would be devastating to eliminate
> channels that I do not watch that I am now forced to pay for?

They explain. It will give the consumer less choice for typically more
money. They explain that the consumers who would benefit are only those
who buy a "handful" of channels only.

They also explain that program diversity would suffer. All stuff we have
already talked about on several occasions.

If your accounting costs go up, the "average" subscriber will pay a
little more, the low-ball subscriber will pay less, and the big-time
subscriber will pay a lot more.

> The FCC may not have the authority to impose ala carte, but a
> good starting point would be to require the cable and DBS
> industries to notify customers how much they are paying now in
> subscriber fees. If consumers actually knew how much they are
> paying for stuff they don't watch, the public outrage just
> might force the multichannel operators to think different.

That's not realistic. What would happen is that the costs would become
rejiggled with a la carte.

Take the extreme: all consumers request only one channel. That one
channel has to cover the entire cost of the infrastructure, so it will
cost a lot, considering what you're getting. Yeah, consumers would be
outraged.

A less extreme condition is where some of the unpopular shows are
dropped for lack of interest. But those shows are probably not the
expensive ones, so the subscriber will end up not saving anything. The
higher accounting costs will simply mask any savings you might have
expected.

You probably think that telephone companies should go back to charging
for individual telephone calls, whether local or long distance. And that
on average, everyone would save that way.

The good news would be that without the "150 channels for one low
price," consumers would think twice about going to MVPDs at all. Paying
a lot for a few channels should give any sensible person pause.

Bert
 
 
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