July 19, 2012

Why Won't Comcast Just Sell Me the 16 Channels I want to Watch?

For the 80+% of households in the US who have some form of cable/satellite television it has likely occurred to you that most of the channels you pay for are a "load of garbage".   If you're like most people you probably watch 5-20 channels almost exclusively and then ignore the other 100-500 channels taking up space in your programming guide.   At one time or another most of us have had the awesome idea of simply being able to buy only for the channels that you want to watch and not paying for all the rest of that junk.   Its an awesome idea right?   Why can't I just pay for and watch ESPN, Comedy Central, Sci-Fi, BBC, Discover, AMC, HGTV, ABC, CBS, NBC, Fox, PBS and whatever else I'm forgetting that I occasionally watch?   I mean if I pay like ... oh.. I don't know ... $1 per channel than thats going to be like $20 and right now they charge me something stupid like $70 or $80 for 250+ channels most of which I never watch.  Brilliant, right?

Why won't the cable or satellite TV people simply sell me the channels I want to watch individually in an a la carte system?

The simple answer to this is that EVERYONE would do the same thing and we'd all just pick the 10-
20 or so channels that we want to watch and delete the junk.    If we could simply buy the channels we wanted for just $1 each or something then everyone would do exactly that and we'd all be paying $20 or so instead of $30-$100.    The TV providers are not going to design their business so that all their customers will pay them a fraction of the amount they currently do.    The cable and satellite companies know they are selling a lot of 'junk' channels mixed in large bundles along with several of the 'good' channels.   This is intentional on their part.   They can't get you to pay $75 for 5 channels you want to watch, but if they force you to buy 250 channels at a cost of $75 for all of them then you have no choice to buy them all in order to get the 5 channels you want.   The TV companies don't want to offer a la carte programming because it would just end up losing them revenue.

Another thing to consider is that the 'good' channels cost a lot more than the 'junk' channels.   An al a carte system may not be as cheap as we imagine.  Its not as if Comcast would bundle 250 channels for $75 and then sell those individual channels for 30¢ each.    Individual channels are often more expensive than you might imagine.   The 'junk' channels are actually quite cheap and the most popular channels are much more expensive.   You might be able to get yourself the home shopping network for free but if you want the EPSN channels then that would likely cost $10-20 per month in an a la carte system.   Don't think of the 250 channels you're paying $75 for as 30¢ per channel with a lot of stuff you don't want.  Instead think of it as paying $75 for the 'good' 20 channels you do like plus getting 230 'junk' channels for free.   Thats actually what it almost amounts to. 

To see how a la carte programming costs might end up working look at the c-band satellite programming.   C-band is the old style large satellite TV dishes that you used to see often next to trailer homes in rural areas 20+ years ago.  These are the 10 foot wide dishes that were somewhat popular in rural parts before DISH and DirectTV came out.    Initially the old large satellite TV users got signals for free out of the air because they weren't scrambled or they used technically illegal descramblers.   Later the satellite companies came up with ways for such large dish owners to buy channels legally.   Today they have companies selling c-band programming subscription services in bundles or sometimes via a la carte pricing per channel.    Think you can get BBC or EPSN Classic for 25¢ or $1 per month and maybe $2 for Sci-Fi?   Think again.   The service Skyvision charges $5.99 each for those channels with their la carte purchase.   Skyvision also sells several package deals which might include a bundle of channels that would work well for you and might be cheaper than one of the large bundles.

Its not just the cable and satellite companies that bundle channels.   The network owners also bundle channels.   I remember when I had DISH network and got in a contract dispute with one of the network companies.   At the time they were arguing over their contract rates.   The contract expired before they came to an agreement and several channels were turned off for DISH customers.   All of the channels were owned by the same company and that company didn't sell the channels to DISH individually.   The owner of the networks bundled all their networks together and sold them to DISH as a bundle.    Basically the TV network owners are doing the same thing to the cable and satellite providers that the cable and satellite providers are doing to us.

Someday a service provider may come along what is willing to do true a la carte programming and settle for low revenues per customer and stealing customers from the cable / satellite providers.   I doubt it will happen anytime soon if ever.   Its more likely in my opinion that individual networks will start offering direct subscription services via the Internet.   However I wonder if some of the existing contracts between the networks and cable or satellite providers might not allow for that.   Plus you also have to consider that many networks are owned by big companies so they might sell their networks in bundles still.

Yeah it would be a great deal for most consumers if you could buy the channels you like a la carte.  Thats pretty much the reason the TV providers don't and won't do it.

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2 comments:

  1. I see it as a tradition though - selling you the good stuff with the filler. In my head, I'm picturing CDs/Albums. For so many years, you had to buy 12-14 songs to get the 1-3 you like... but then piracy and the internet (iTunes Store? Amazon?) forced single song sales.

    I'd have already dropped my service if it wasn't for sports - football isn't really something easy to get online.

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  2. PK: Yeah one good answer for why they don't do it is because of the status quo. Its quite possible that we may end up with a la carte options via streaming on the Internet. All ready you can buy individual TV shows via iTuenes or Amazon. You can get Starz via Netflix right now. HBO is going more into online with their HBO Go offerings, but so far they aren't directly offering subscriptions.
    It wouldn't be too hard for individual sports teams or leagues to offer online steaming games. One of our local professional teams has experimented with steaming some games online. I think the problem with sports is the contracts they have with the TV networks. The team/league can't sell a big fat contract to ESPN or whoever to carry all the games then sell it on the net too, the contracts don't allow that.

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