[opendtv] Re: Broadcasters vs. MVPDs: Economic effects of digital transition on television program supply
- From: Tom Barry <trbarry@xxxxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Mon, 11 Jan 2010 17:23:15 -0500
It seems likely to me the cable price increases are somewhat because
cable became more competitive with OTA as the digital transition
progressed. Some of that, at least in my case, was that OTA became
more difficult to receive. Though the cable price increases eventually
drove me back to OTA again.
But I guess that's how a market equilibrium is supposed to work. Things
are not priced right if some percentage of people are not rejecting the
purchase price. If I move to another city I'll probably again take
advantage of some introductory offer and then again cancel when they try
to sneak in increases after the teaser rates expire.
- Tom
Manfredi, Albert E wrote:
> A very interesting read:
>
> http://www.indiana.edu/~telecom/people/faculty/waterman/Broadcastersvsmvpds-DW.pdf
>
> Of note:
>
> MVPDs have been able to benefit more from the digital transition than have
> OTA broadcasters. Why? Simple. They have been able to increase their rates,
> for the digital tier, for HDTV delivery, for VOD and PPV (although these last
> two are barely a blip on the radar). And cable also gets broadband and
> telephone subscribers.
>
> But in addition, cable has been able to increase the rate they charge for
> their analog basic tiers, faster than the rate of inflation.
>
> So, this increased profitability is simply a function of MVPDs being capable
> of charging more, even when their costs are not increased to deliver a given
> service, and of consumers being willing to pay more, even when they get no
> improvement in service. Examples of this are HDTV, a small increase in cost
> but large increase in the digital and premium tier fees, and in the increase
> in revenues for the basic analog tier.
>
> I guess that's the point I've been trying to make about subscribers seeing
> themselves as "victims."
>
> Bert
>
>
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