The Big Ten Network stole my car

[MJLiverock]

A la carte probably won't be much cheaper for most cable subs anyway. I read a report saying only about 30% of cable companies costs are related to the actual channel line up. The rest is maintenance, capital expenditures for more lines and capacity, corporate overhead, etc. So if 70% is fixed costs that means if you went to a total a la carte system your bill would start at about 70% of where it is today before you even started adding channels. Maybe they could get it down to 60% but probably not because the technological improvements needed to offer a la carte to each home will be expensive.

 

The diversity of channels would certainly go down as even though channels like E!, MSNBC, A&E, Turner Classic Movies, or something are cheap how many people would actually subscribe? In order to make enough to survive on lower subs they would most certainly have to raise their price because the subsidation by the more popular channels would be gone.

 

ESPN is at about $3.00+ right now, assume a channel like that gets picked up by "only "80% of the subs and they are below where they are today on revs so they would want to raise prices to something $3.30 or more.

 

Start adding in other channels you may want, News, History, Discovery, HGTV, Disney, TNT, etc. and pretty soon the bill is right back to where it is today with even less channels.

 

Sure some people will say I just want ESPN, CNN, and say TBS. But as soon as you start figuring in wives, kids, etc. the channels list starts climbing pretty fast.

 

The interconnectivity of the channels will probably create some packages just like today but in the end the bill will probably be pretty similar to today. ESPN could say well you can have ESPN for $3.00 or you can have ESPN, ESPN2, ESPN News, and ESPNU for $5.99. MTV can package MTV, CMT, VH1, Nickelodeon, NICK2, Nick Toons, TV Land etc. basically forcing you take other channels if you want only 1 or 2 of their list. A&E and History Channel are together. There is a whole suite of Discovery owned channels. Turner owns its share with TBS, TNT, Cartoon Network, Boomerang, Turner Classic Movies. Fox has FX, Fox News, Fox Movies. General Electric has NBC, CNBC, MSNBC, Universal, USA, Sci Fi.

 

Like I said earlier the Big 10 deal of $1/month isn't too bad on its own compared to the price of buying PPV games that used to be available or adding ESPN Game Plan or ESPN Full Court.

 

Before anyone asks, no I don't work for a cable or satellite company, but I do work in investment research so I see a lot of the behind the scenes costs for companies. I just think there is a lot of misunderstanding about how the cable industry works because of information and misinformation put out by both sides of the argument.

[1992casey]

Back when I had C Band, we were required to choose a package, then we could a la carte beyond that. That was a great way to deal with the fact that a package might be missing a channel or two.

 

There were packages that had as few as about a half a dozen channels for about 6 bucks per month. One time I chose a package that was equivalent to extended basic. But for some reason, that package was missing CNBC. I added it for 4 bucks per year.

 

The real beauty, though, was that we could purchase our programming from a number of different companies. Someone would usually have the right fit at the right price.

[bjkrautk]

Thought someone should at least mention the hearings tomorrow.

 

"The heads of both the NFL and Big Ten networks, along with a vice president of the Green Bay Packers, planned to testify in support of the bill being heard by a state Senate committee.

The head of the Wisconsin Cable Communications Association was expected to speak against it."