[opendtv] Re: News: The People Vs. Comcast

  • From: Albert Manfredi <albert.e.manfredi@xxxxxxxxxx>
  • To: <opendtv@xxxxxxxxxxxxx>
  • Date: Sat, 12 Jan 2008 18:08:59 -0500

Craig Birkmaier wrote:

> The rewrite concluded:
> The time for fundamental changes to the business model
> that broadcasters have relied upon for decades is rapidly
> approaching.

The problem with this line of thinking, and with Kevin Martin's insistence on a 
more a la carte model for cable (and presumably also DBS??), is that it sounds 
so non-credible.

In a relatively free market, it is consumers who decide, not pundits. If people 
were as adamant about "high cable prices" as the pundits keep telling us, you 
would see the beginnings of a decline in households using these umbillical 
systems. That's how it's supposed to work.

No matter how much they hype up the fact that people occasionally watch a TV 
program online, people are not yet dropping their multichannel service 
subscriptions. Microeconomics 101 tells us that the price of these 
subscriptions is not quite high enough. The online distribution, for the time 
being, is simply an adjunct. Not a replacement.

This is no different from the price of gasoline. As long as people continue 
buying outrageous vehicles to the tune of 50 percent of new vehicle sales, the 
price of gasoline, by definition, is not high enough. (Hopefully, above 
$3.00/gal, the trend may start to reverse itself.)

In short, "boo hoo" about high cable prices.


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