(04-10-2013 10:43 AM)JRsec Wrote:  The reason the television deals are of long duration is that it not only benefits the networks to tie up their product for years thereby putting the leverage in live sports broadcasting product acquisition in their favor as it plays out against the trends, but the university presidents clamor for it because they want long term guarantees of income, even if they could make more from contracts of shorter duration. They are not business people, they are bureaucrats.

... and the more entrepreneurial of them are academic politicians, and the focus of their ambition is academic power and prestige, not commercial success.

To the extent that they view sports as a marketing venture for the "real" university activities, their primary goal is that it be self-funding advertising and they don't have to subsidize it out of academic income flows and academic contributions.

None of that means that the change will not happen, but it does mean that the pace of change will be slower than people sometimes imagine. Institutional arrangements always reflect the rules desired by the winners of past institutional battles, so they are always past bound, which is a factor that is always slowing down technological change, even in contexts where it is impossible for them to halt the change.

Remember many schools are building new facilities with bonded indebtedness. Being able to show the bond daddies what the guaranteed revenue stream will be the next 10 - 20 years is important.

Knowing you have guaranteed money in 2025 makes it easier to sell your debt.

Presidents may be PhD's with a skill set not especially useful in the marketplace but they do understand financing the construction of buildings and that's all the rage in athletics right now.

(04-10-2013 05:51 AM)SeaBlue Wrote:  Good stuff.

What I wasn't seeing until now is just how to get more bandwidth cheaply given that currently the internet company is also your cable company that owns the bandwidth -- and the inherent conflict of interests that goes with it. Our government to the rescue!

Everyone on the Interwebs wants to kill off the BTN model, and perhaps that will happen, but I don't see where conferences will not be able to still make plenty of money with conference-only or bundled subscriptions given the growing uniqueness of must-watch live television. With ESPN and Fox producing or owning the rights to so much content, they will become your cable company. You can order a la carte, but the happy meal bundle will be there and will be priced very attractively to families (i.e. the "family bandwidth plan").

My internet provider is ATT, so that always doesn't hold true regarding cable owning the bandwidth, but I see your point.

(04-10-2013 10:08 AM)Frank the Tank Wrote:  

(04-10-2013 09:12 AM)bitcruncher Wrote:  It won't happen as suddenly as you think. There are still a lot of us old farts around who will be resistant to change, since they didn't grow up in an age where electronics were readily available. I spend more time reading books than I do watching TV, and they aren't electronic books either. I have a massive private library, and I've read them all multiple times, except for the 26 books I've acquired in the last month or so. I'm slowly working my way through those...

I also don't think it will happen suddenly, although it's not so much about the "old farts" (albeit there's some of that).

Entertainment isn't a commodity. That's is, we're not talking about widgets. For the most part, we don't watch networks as much as we want specific shows and events (just as we rarely care about which studio releases a movie outside of maybe Disney/Pixar). The thing is that very few specific shows and events are self-sustaining on their own financially - in order for shows and events to ever be produced, you need the scale of other shows on a network or from a particular production company to pay for them. Mad Men could never, ever get produced in an environment that is truly a la carte. Never. It needs both the subscriber fees for AMC itself and the leverage of other AMC shows that Mad Men fans may or may not ever watch (e.g. The Walking Dead) for it to get produced. This is the case for well over 90% of the shows on TV. This is different than, say, music, which is a comparison that a lot of people like to make in terms of how the Internet has impacted distribution. Taylor Swift album sales aren't paying for Jay-Z productions at Universal Music Group (both artists are under that label). That's really the root of any issue with a la carte and how so many of the discussions about it are waaaaay too simplistic. Too many people are assuming that a la carte would mean that they get to choose from the lineup of networks and shows that exist today, which will end up NOT being the case. Instead, a la carte means that they would get to choose from a very limited number of networks and shows because only a small percentage of them could survive in that environment. Maybe people will argue that this is how it should work, but people need to realize in the vast majority of cases, the only reason why your own favorite network and TV shows exist is because a whole bunch of stuff that you're complaining that you never watch is paying for them.

At the end of the day, much of this is form over substance. We might end up receiving entertainment primarily via the Internet instead of cable/satellite. I could easily see that. What we now know as TV networks might drastically change. I could easily see that, as well. However, does that mean that we're going to be (a) paying less money for such entertainment or (b) really moving away from buffet pricing and towards an a la carte model? I would say no on both fronts. The push against basic subscriber fees is as much about corporate profits for the cable service providers as it is about supposed consumer choice. If you actually think that Comcast is going to be charging you less money in an a la carte world (considering that they also control much of the nation's Internet broadband infrastructure), I would call you INSANELY naive beyond all reproach.

On the second front, people WANT all-you-can-eat buffets of programming when looking at their actions. Look at the 2 dominant alternatives that people that have "cut the chord" use for watching shows: Hulu and Netflix. Hulu is the result of the TV networks having realized a few years ago that people don't want to go to individual network websites to watch shows (the essence of a la carte on the Internet), but rather they absolutely want them all in one place for one price. That is NOT a la carte. This is the exact same thing as cable pricing except that it's in the form of Internet streaming: I'm paying for access to hundreds of TV shows that I may not ever watch for the ability to watch the handful of shows that I actually do want to watch. The same principle is in place with Netflix - the value proposition for Netflix streaming is that it has the scale to provide thousands of options that you may or may not ever watch.

So, maybe the "networks" in the future will be Hulu, Netflix, and sports platforms like ESPN3 that are delivered on the Internet. Those are still all built on the principle of aggregating a ton of content on a buffet basis as opposed to a true a la carte model. The thing is that the price for each of those "networks" will rise as they obtain the same amount of content as exists on cable today, so I doubt that there will be any discount to the typical consumer once you add those all up in the future assuming that consumers still want all of the same shows and events that are available today. We've talked a lot about the form of receiving content (Internet vs. cable/satellite), but the substance and costs are eventually going to end up being the same.

I think a lot of the "cord cutting" has to do with price points, as oppossed to being able to watch whatever, whenever.

For me is was a simple decision, I can pay Netflix $9/month to watch a couple of things I want and have access to a bunch of stuff I will probably never watch or I can pay Time Warner at minimum $40/month to watch a couple of things I want and have access to a bunch of stuff I will probably never watch. To me it was a no brainer, as I believe it is for most people and families. The method of delivery is irrelevant to most people, but the expansion of choices in methods of delivery has allowed for competition to emerge b/c no one dominated the internet the way the Big Media companies dominated the cables and satellite

(04-10-2013 12:21 PM)solohawks Wrote:  For me is was a simple decision, I can pay Netflix $9/month to watch a couple of things I want and have access to a bunch of stuff I will probably never watch or I can pay Time Warner at minimum $40/month to watch a couple of things I want and have access to a bunch of stuff I will probably never watch. To me it was a no brainer, as I believe it is for most people and families. The method of delivery is irrelevant to most people, but the expansion of choices in methods of delivery has allowed for competition to emerge b/c no one dominated the internet the way the Big Media companies dominated the cables and satellite

The flip side of that is that the direct video streaming is a lot less lucrative than the cable ~ consider the collapse of Netflix's profits as it transitioned from the DVD by mail model to the video streaming model ~ so there is substantial incentive for both the cable companies and the cable content providers to try to hold onto their old-model audiences for as long as possible by keeping as much out of direct internet streaming as possible.

(04-10-2013 09:06 AM)solohawks Wrote:  

(04-10-2013 08:40 AM)bitcruncher Wrote:  

(04-10-2013 07:13 AM)solohawks Wrote:  If his prediction is accurate a lot of small cable companies will be put out of business just like a lot of small cell phone providers were put out of business

You think the big businesses that own our government really care about saving small businesses? I don't...

oh no i did not mean to imply that at all! I believe that 9 times out of ten regulations strangle small businesses and price them out of the marketplace.

just wanted to point out that when the market place becomes national, small business gets shut out, shut down, bought out, etc. it was true of early cell phones and early internet providers and it will be true for internet tv.

he suggested in the video that comcast would partner with xbox to offer their cable service via the new xbox. say comcast does that and then time warner partners with playstation. boom you now how have a cable duopoly and over time all other medium to small "mom and pop" cable providers will be forced out of the market place b/c they cannot compete.

heck, even pro wrestling is a good example of this. there used to be dozens and dozens of promotions that promoted regionally, but when the market place went national they all fell to the wayside and now we have 1 giant wrestling promotion.

people lament giant corporations that control everything yet that is the path we set up for ourselves

I disagree because of two Achilles heels of large corporations:

one: there are some areas that large corporations absolutely, positively refuse to service. Think of locales like Moscow, Idaho; Cheyenne, Wyoming; Las Cruces, N.M. Big corporations fail to see the point of investing in a town/city with smaller population base and abandon it for bigger population centers, so a "mom & pop" store/company/enterprise gets that smaller locale for itself, and stays in business because no one wants to take over its responsibility.

two: Large corporations like to increase their prices on their product, thinking the customer will have little choice but to accept. Some customers do, but other get angry with the large corporations, and refuse to do any business with them, and instead go straight to their competitors, the "mom & pop" business enterprises and deal with them instead. BTW, regional wrestling is not dead and the WWE doesn't control all the aspects of wrestling- just the really big PPV matches, and the nationwide wrestling circuit. However, there are still "mom & pop" operations out there that still put out good quality shows for a reasonable low price. They can't charge high $$ amounts due to WWE, but they are allowed to present wrestling viewers with an alternative to the WWE. And some viewers do take that alternative. That's why free enterprise is a wonderful thing. If the federal gov't hadn't bailed out Ford, GM, etc., those giants would have went under not long ago, and Americans might have had more choices of vehicles to drive, IMO. That's why you keep the gov't out of the marketplace, because it eventually corrects itself; it can't correct itself if gov't forcing conditions on it, IMO.

don't forget about google/youtube's expected move into premium pay channels. they will likely become a major player in any internet based tv model.

(04-10-2013 10:43 AM)Frank the Tank Wrote:  

(04-10-2013 10:19 AM)arkstfan Wrote:  Riffing on Frank's comments.

Recently one of the executives at Netflix said they are racing to become HBO before HBO becomes Netflix. That is they want to be a content producer who makes must watch shows to get that subscription fee and handle delivery before HBO severs its marriage with cable/sat.

I read a recent article where an agent or producer said the budgets for shows on HBO, AMC, Netflix are huge compared to ABC, NBC, CBS, Fox because they have to have a show that people will not give up. If I tried to cut AMC from our package my family would kill me before they'd let me give up Mad Men and Walking Dead. But the funny thing is, we never watched a Mad Men episode when it aired until Sunday. We started watching on Netflix got caught up, then watched last season on demand with our satellite company. Walking Dead we started on Netflix as well.

What will be interesting to see is if Netflix has to eventually adopt TV-like scheduling in order to make productions like House of Cards pay off. As a consumer, it's great to get all episodes of a show from day 1. From a business perspective, though, it may behoove Netlifx to ferret out episodes over a longer period of time since their model is completely about month-to-month subscriptions. If Netflix only gets one month of subscription revenue from producing a show with HBO-level production values, that's going to be VERY tough to sustain. They may need to at least put up new episodes in chunks so that they're spread out over 3 months or more.

I've been following Netflix for years now and I can tell you that stringing along its subscribers is not the plan. Netflix's plan is to create 12-24 great shows that you simply cannot live without. Check out House of Cards, and Bad Samaritans.

(04-10-2013 10:19 AM)arkstfan Wrote:  Riffing on Frank's comments.

Recently one of the executives at Netflix said they are racing to become HBO before HBO becomes Netflix. That is they want to be a content producer who makes must watch shows to get that subscription fee and handle delivery before HBO severs its marriage with cable/sat.

I read a recent article where an agent or producer said the budgets for shows on HBO, AMC, Netflix are huge compared to ABC, NBC, CBS, Fox because they have to have a show that people will not give up. If I tried to cut AMC from our package my family would kill me before they'd let me give up Mad Men and Walking Dead. But the funny thing is, we never watched a Mad Men episode when it aired until Sunday. We started watching on Netflix got caught up, then watched last season on demand with our satellite company. Walking Dead we started on Netflix as well.

AMC dramas are the only one's I ever watch and I watch all of them. Most of the rest of the crap I'm paying for is just that IMO, low quality crap. There's a lot of folks like me. So, I disagree completely with Frank that AMC wouldn't survive in an a la carte environment. I think they're one of the few existing cable networks that would do well.

(04-10-2013 11:14 PM)blunderbuss Wrote:  

(04-10-2013 10:19 AM)arkstfan Wrote:  Riffing on Frank's comments.

Recently one of the executives at Netflix said they are racing to become HBO before HBO becomes Netflix. That is they want to be a content producer who makes must watch shows to get that subscription fee and handle delivery before HBO severs its marriage with cable/sat.

I read a recent article where an agent or producer said the budgets for shows on HBO, AMC, Netflix are huge compared to ABC, NBC, CBS, Fox because they have to have a show that people will not give up. If I tried to cut AMC from our package my family would kill me before they'd let me give up Mad Men and Walking Dead. But the funny thing is, we never watched a Mad Men episode when it aired until Sunday. We started watching on Netflix got caught up, then watched last season on demand with our satellite company. Walking Dead we started on Netflix as well.

AMC dramas are the only one's I ever watch and I watch all of them. Most of the rest of the crap I'm paying for is just that IMO, low quality crap. There's a lot of folks like me. So, I disagree completely with Frank that AMC wouldn't survive in an a la carte environment. I think they're one of the few existing cable networks that would do well.

Right now ESPN gets $5 something per subscriber. It is generally estimated that in an ala carte environment that ESPN would have to charge $30.

I dropped the $5 a month sports package on ATT because I rarely watched it and I'm a big sports fan but I'm not sure I care enough about ESPN's content to pay $30. I almost never watch Monday night football, I don't watch ESPN or MLB. They've lost the EPL and MLS that I do watch.

I watch college football but the season is 14 weeks long and at least 6 of those weeks I'll either be at a game or traveling to/from and see none of the games that Saturday. $120 is a lot of money for 8 weekends of viewing.

Same math hits AMC. They were getting around 25 cents per subscriber they've been seeking 75 cents in renewals. Currently they are in just under 100 million homes, so they bring in $75 million per month if they get all their renewals at the level they want. Realistically they are probably making more like $30 million per month.

What happens if ala carte hits? There aren't 100 million homes that consider AMC must watch. There might be 20 million. So they in theory could get by with charging $1.50 a month to get current revenue and would need around $3.50 to get what they think they are worth.

But it's not quite that simple. Now AMC has to aggressively market to attract subscribers and insure they remain must have to their current subscribers that could easily eat up 50 cents per subscriber.

To market effectively the game changes. Right now they hold up the cable and sat companies telling them pay up or your subscribers will go elsewhere and clog up your customer service in anger. In ala carte cable and satellite tell consumers "you want it, this is the price, pay it". But do you want that if you are AMC? No. You want the cable and satellite companies to push it to their customers. So you are going to have to make it worth their time, and what's more why would Comcast collect and remit $2 a month for AMC for nothing? So now you have to set a price that allows you to pay Comcast for collecting your money and flipping the access switch off or on depending on subscription status. And you want them to push the product not just collect the money.

You can easily push AMC into the $5 territory and then only if you are keeping 20 million households and that may be optimistic. Mad Men has gone off its peak of 5 million viewers to just over 3 million. The Walking Dead season finale drew 9 million on first airing and 1.5 million on the repeat immediately following.

If those numbers represent the "must haves" AMC might be at a price point of $10 to $12 a month.

(04-10-2013 10:19 AM)arkstfan Wrote:  Riffing on Frank's comments.

Recently one of the executives at Netflix said they are racing to become HBO before HBO becomes Netflix. That is they want to be a content producer who makes must watch shows to get that subscription fee and handle delivery before HBO severs its marriage with cable/sat.

I read a recent article where an agent or producer said the budgets for shows on HBO, AMC, Netflix are huge compared to ABC, NBC, CBS, Fox because they have to have a show that people will not give up. If I tried to cut AMC from our package my family would kill me before they'd let me give up Mad Men and Walking Dead. But the funny thing is, we never watched a Mad Men episode when it aired until Sunday. We started watching on Netflix got caught up, then watched last season on demand with our satellite company. Walking Dead we started on Netflix as well.

Same way I start most television shows these days. Mad Men I never watched live until last season. Even then out of 13 episodes I watched probably 8 or 9 live and the rest on demand. This season will end up much the same Sunday's premier I watched live and based on my time I'll watch the rest either live or the next day on demand.

(04-11-2013 08:33 AM)arkstfan Wrote:  

(04-10-2013 11:14 PM)blunderbuss Wrote:  

(04-10-2013 10:19 AM)arkstfan Wrote:  Riffing on Frank's comments.

Recently one of the executives at Netflix said they are racing to become HBO before HBO becomes Netflix. That is they want to be a content producer who makes must watch shows to get that subscription fee and handle delivery before HBO severs its marriage with cable/sat.

I read a recent article where an agent or producer said the budgets for shows on HBO, AMC, Netflix are huge compared to ABC, NBC, CBS, Fox because they have to have a show that people will not give up. If I tried to cut AMC from our package my family would kill me before they'd let me give up Mad Men and Walking Dead. But the funny thing is, we never watched a Mad Men episode when it aired until Sunday. We started watching on Netflix got caught up, then watched last season on demand with our satellite company. Walking Dead we started on Netflix as well.

AMC dramas are the only one's I ever watch and I watch all of them. Most of the rest of the crap I'm paying for is just that IMO, low quality crap. There's a lot of folks like me. So, I disagree completely with Frank that AMC wouldn't survive in an a la carte environment. I think they're one of the few existing cable networks that would do well.

Right now ESPN gets $5 something per subscriber. It is generally estimated that in an ala carte environment that ESPN would have to charge $30.

I dropped the $5 a month sports package on ATT because I rarely watched it and I'm a big sports fan but I'm not sure I care enough about ESPN's content to pay $30. I almost never watch Monday night football, I don't watch ESPN or MLB. They've lost the EPL and MLS that I do watch.

I watch college football but the season is 14 weeks long and at least 6 of those weeks I'll either be at a game or traveling to/from and see none of the games that Saturday. $120 is a lot of money for 8 weekends of viewing.

Same math hits AMC. They were getting around 25 cents per subscriber they've been seeking 75 cents in renewals. Currently they are in just under 100 million homes, so they bring in $75 million per month if they get all their renewals at the level they want. Realistically they are probably making more like $30 million per month.

What happens if ala carte hits? There aren't 100 million homes that consider AMC must watch. There might be 20 million. So they in theory could get by with charging $1.50 a month to get current revenue and would need around $3.50 to get what they think they are worth.

But it's not quite that simple. Now AMC has to aggressively market to attract subscribers and insure they remain must have to their current subscribers that could easily eat up 50 cents per subscriber.

To market effectively the game changes. Right now they hold up the cable and sat companies telling them pay up or your subscribers will go elsewhere and clog up your customer service in anger. In ala carte cable and satellite tell consumers "you want it, this is the price, pay it". But do you want that if you are AMC? No. You want the cable and satellite companies to push it to their customers. So you are going to have to make it worth their time, and what's more why would Comcast collect and remit $2 a month for AMC for nothing? So now you have to set a price that allows you to pay Comcast for collecting your money and flipping the access switch off or on depending on subscription status. And you want them to push the product not just collect the money.

You can easily push AMC into the $5 territory and then only if you are keeping 20 million households and that may be optimistic. Mad Men has gone off its peak of 5 million viewers to just over 3 million. The Walking Dead season finale drew 9 million on first airing and 1.5 million on the repeat immediately following.

If those numbers represent the "must haves" AMC might be at a price point of $10 to $12 a month.

Guess I just got schooled on how a la carte would really work. Do you work in the media industry or something?
Either way I hope somebody figures something out soon and makes it work b/c I'm sick of paying $100+ per month for my internet and cable bill when I don't care to watch 90% of the channels. It's completely unfair to the consumer.

(04-11-2013 10:53 AM)blunderbuss Wrote:  

(04-11-2013 08:33 AM)arkstfan Wrote:  

(04-10-2013 11:14 PM)blunderbuss Wrote:  

(04-10-2013 10:19 AM)arkstfan Wrote:  Riffing on Frank's comments.

Recently one of the executives at Netflix said they are racing to become HBO before HBO becomes Netflix. That is they want to be a content producer who makes must watch shows to get that subscription fee and handle delivery before HBO severs its marriage with cable/sat.

I read a recent article where an agent or producer said the budgets for shows on HBO, AMC, Netflix are huge compared to ABC, NBC, CBS, Fox because they have to have a show that people will not give up. If I tried to cut AMC from our package my family would kill me before they'd let me give up Mad Men and Walking Dead. But the funny thing is, we never watched a Mad Men episode when it aired until Sunday. We started watching on Netflix got caught up, then watched last season on demand with our satellite company. Walking Dead we started on Netflix as well.

AMC dramas are the only one's I ever watch and I watch all of them. Most of the rest of the crap I'm paying for is just that IMO, low quality crap. There's a lot of folks like me. So, I disagree completely with Frank that AMC wouldn't survive in an a la carte environment. I think they're one of the few existing cable networks that would do well.

Right now ESPN gets $5 something per subscriber. It is generally estimated that in an ala carte environment that ESPN would have to charge $30.

I dropped the $5 a month sports package on ATT because I rarely watched it and I'm a big sports fan but I'm not sure I care enough about ESPN's content to pay $30. I almost never watch Monday night football, I don't watch ESPN or MLB. They've lost the EPL and MLS that I do watch.

I watch college football but the season is 14 weeks long and at least 6 of those weeks I'll either be at a game or traveling to/from and see none of the games that Saturday. $120 is a lot of money for 8 weekends of viewing.

Same math hits AMC. They were getting around 25 cents per subscriber they've been seeking 75 cents in renewals. Currently they are in just under 100 million homes, so they bring in $75 million per month if they get all their renewals at the level they want. Realistically they are probably making more like $30 million per month.

What happens if ala carte hits? There aren't 100 million homes that consider AMC must watch. There might be 20 million. So they in theory could get by with charging $1.50 a month to get current revenue and would need around $3.50 to get what they think they are worth.

But it's not quite that simple. Now AMC has to aggressively market to attract subscribers and insure they remain must have to their current subscribers that could easily eat up 50 cents per subscriber.

To market effectively the game changes. Right now they hold up the cable and sat companies telling them pay up or your subscribers will go elsewhere and clog up your customer service in anger. In ala carte cable and satellite tell consumers "you want it, this is the price, pay it". But do you want that if you are AMC? No. You want the cable and satellite companies to push it to their customers. So you are going to have to make it worth their time, and what's more why would Comcast collect and remit $2 a month for AMC for nothing? So now you have to set a price that allows you to pay Comcast for collecting your money and flipping the access switch off or on depending on subscription status. And you want them to push the product not just collect the money.

You can easily push AMC into the $5 territory and then only if you are keeping 20 million households and that may be optimistic. Mad Men has gone off its peak of 5 million viewers to just over 3 million. The Walking Dead season finale drew 9 million on first airing and 1.5 million on the repeat immediately following.

If those numbers represent the "must haves" AMC might be at a price point of $10 to $12 a month.

Guess I just got schooled on how a la carte would really work. Do you work in the media industry or something?
Either way I hope somebody figures something out soon and makes it work b/c I'm sick of paying $100+ per month for my internet and cable bill when I don't care to watch 90% of the channels. It's completely unfair to the consumer.

Have friends in the cable business and in TV. Then shortly after they explained it there was great article on why HBO won't sell you service over the internet without a cable subscription that covered a lot of that ground.

Without the current model, AMC would have never gotten off the ground nor would have ESPN. The cable providers were willing to pay a few cents a month out of subscriptions because people were asking "Why should I pay to get television? I can get everything I'd ever want to watch with an antenna for free."

Until that model evolved, cable was for rural towns that couldn't get a decent signal from the nearest TV station or were limited to only one or two network stations. My wife's family couldn't get ABC with their antenna out on the farm and the kids in town with cable were talking about Happy Days, Laverene and Shirley, and Welcome Back Kotter and she was clueless what they were talking about.

(04-10-2013 11:14 PM)blunderbuss Wrote:  

(04-10-2013 10:19 AM)arkstfan Wrote:  Riffing on Frank's comments.

Recently one of the executives at Netflix said they are racing to become HBO before HBO becomes Netflix. That is they want to be a content producer who makes must watch shows to get that subscription fee and handle delivery before HBO severs its marriage with cable/sat.

I read a recent article where an agent or producer said the budgets for shows on HBO, AMC, Netflix are huge compared to ABC, NBC, CBS, Fox because they have to have a show that people will not give up. If I tried to cut AMC from our package my family would kill me before they'd let me give up Mad Men and Walking Dead. But the funny thing is, we never watched a Mad Men episode when it aired until Sunday. We started watching on Netflix got caught up, then watched last season on demand with our satellite company. Walking Dead we started on Netflix as well.

AMC dramas are the only one's I ever watch and I watch all of them. Most of the rest of the crap I'm paying for is just that IMO, low quality crap. There's a lot of folks like me. So, I disagree completely with Frank that AMC wouldn't survive in an a la carte environment. I think they're one of the few existing cable networks that would do well.

I'd personally pay for it, too, as I love Mad Men and Breaking Bad. However, those are really niche shows with the sizes of their audiences in the grand scheme of things. (The Walking Dead is a bit different - that has a legitimately large audience.) The main true broadly watched networks are TNT, TBS, USA and ESPN for adults (with Nickelodeon and Disney Channel for kids). Basically, the main cable channels that you received in 1990 are the ones that would most likely survive in an a la carte environment.

(04-11-2013 08:33 AM)arkstfan Wrote:  

(04-10-2013 11:14 PM)blunderbuss Wrote:  

(04-10-2013 10:19 AM)arkstfan Wrote:  Riffing on Frank's comments.

Recently one of the executives at Netflix said they are racing to become HBO before HBO becomes Netflix. That is they want to be a content producer who makes must watch shows to get that subscription fee and handle delivery before HBO severs its marriage with cable/sat.

I read a recent article where an agent or producer said the budgets for shows on HBO, AMC, Netflix are huge compared to ABC, NBC, CBS, Fox because they have to have a show that people will not give up. If I tried to cut AMC from our package my family would kill me before they'd let me give up Mad Men and Walking Dead. But the funny thing is, we never watched a Mad Men episode when it aired until Sunday. We started watching on Netflix got caught up, then watched last season on demand with our satellite company. Walking Dead we started on Netflix as well.

AMC dramas are the only one's I ever watch and I watch all of them. Most of the rest of the crap I'm paying for is just that IMO, low quality crap. There's a lot of folks like me. So, I disagree completely with Frank that AMC wouldn't survive in an a la carte environment. I think they're one of the few existing cable networks that would do well.

Right now ESPN gets $5 something per subscriber. It is generally estimated that in an ala carte environment that ESPN would have to charge $30.

I dropped the $5 a month sports package on ATT because I rarely watched it and I'm a big sports fan but I'm not sure I care enough about ESPN's content to pay $30. I almost never watch Monday night football, I don't watch ESPN or MLB. They've lost the EPL and MLS that I do watch.

I watch college football but the season is 14 weeks long and at least 6 of those weeks I'll either be at a game or traveling to/from and see none of the games that Saturday. $120 is a lot of money for 8 weekends of viewing.

Same math hits AMC. They were getting around 25 cents per subscriber they've been seeking 75 cents in renewals. Currently they are in just under 100 million homes, so they bring in $75 million per month if they get all their renewals at the level they want. Realistically they are probably making more like $30 million per month.

What happens if ala carte hits? There aren't 100 million homes that consider AMC must watch. There might be 20 million. So they in theory could get by with charging $1.50 a month to get current revenue and would need around $3.50 to get what they think they are worth.

But it's not quite that simple. Now AMC has to aggressively market to attract subscribers and insure they remain must have to their current subscribers that could easily eat up 50 cents per subscriber.

To market effectively the game changes. Right now they hold up the cable and sat companies telling them pay up or your subscribers will go elsewhere and clog up your customer service in anger. In ala carte cable and satellite tell consumers "you want it, this is the price, pay it". But do you want that if you are AMC? No. You want the cable and satellite companies to push it to their customers. So you are going to have to make it worth their time, and what's more why would Comcast collect and remit $2 a month for AMC for nothing? So now you have to set a price that allows you to pay Comcast for collecting your money and flipping the access switch off or on depending on subscription status. And you want them to push the product not just collect the money.

You can easily push AMC into the $5 territory and then only if you are keeping 20 million households and that may be optimistic. Mad Men has gone off its peak of 5 million viewers to just over 3 million. The Walking Dead season finale drew 9 million on first airing and 1.5 million on the repeat immediately following.

If those numbers represent the "must haves" AMC might be at a price point of $10 to $12 a month.

Yes, a lot of people forget the marketing cost. What might be $5 per month for ESPN today could easily turn into $20 per month or more when you factor in the increased expenses of having to sell and market in an a la carte environment. Basically, everything that's really expensive to produce (sports, top dramas, new comedy shows - AKA stuff that guys like to watch) are going to cost a lot to watch in an a la carte world. judging from the viewing habits around here, very few people on this board are going to benefit from that environment. In fact, we're probably going to pay more to be able to watch the same shows/events that we receive with basic cable. It's the group that watches Lifetime and cable news all day without any desire for ESPN/AMC/Comedy Central/TNT that would save a ton of money.

True a la carte providers will become like car companies, only without a government to bail them out. They will rely on constant hits and a good economy.

It will be risky for the big boys to "innovate". Let's hope everything doesn't become a new twist on a reality show.

I wonder what Apple is planning with it's claimed new 60" Apple TV. I assume it will basically be a 60" Smart TV that can stream from other apple devices? Or could it be much more?

(04-11-2013 12:21 PM)SeaBlue Wrote:  True a la carte providers will become like car companies, only without a government to bail them out. They will rely on constant hits and a good economy.

It will be risky for the big boys to "innovate". Let's hope everything doesn't become a new twist on a reality show.

I can see it now. It wouldn't matter what a team did on the field for 4 quarters. At the end a panel of 5 washed up hacks would vote the winner with snide comments and butt kissing. That would be the last game I ever watched or attended but it would please the imbecilic public and their petty prejudices and would give them more to talk about on Monday when they should be working. Thanks for such a disgusting mental picture there SEA BLUE. Just when I thought it couldn't get much worse "reality" (ironically named) sets in.

By the way you made a good point. I just couldn't help unloading my sarcasm at the idea.

(04-11-2013 08:33 AM)arkstfan Wrote:  If those numbers represent the "must haves" AMC might be at a price point of $10 to $12 a month.

And its even worse than that. When you start marketing pure a la carte, whether on cable or internet streaming or both, the churn rate kicks way up. One thing the aggregation of channels into tiers does is that when a "must watch" show on one channel is over and frees up the time that was devoted to watching that, then there are a bunch of hooks in the water to try to capture that time to watch something else, so people's time spent viewing a particular channel over a year can be more volatile than the time spent viewing some programming on a broad tier.

But I've got one streaming subscription I keep going continuously, because I subscribe annually, Netflix which I keep running most of the time but will turn off when I am particularly busy or catching up on content on some other sites, and then three subscription sites that I have the subscription cancelled or postponed (depending on the site) more often than the subscription is active.

Which is taking it from a la carte by channel to a la carte by channel by month.

(04-11-2013 02:39 PM)BruceMcF Wrote:  

(04-11-2013 08:33 AM)arkstfan Wrote:  If those numbers represent the "must haves" AMC might be at a price point of $10 to $12 a month.

And its even worse than that. When you start marketing pure a la carte, whether on cable or internet streaming or both, the churn rate kicks way up. One thing the aggregation of channels into tiers does is that when a "must watch" show on one channel is over and frees up the time that was devoted to watching that, then there are a bunch of hooks in the water to try to capture that time to watch something else, so people's time spent viewing a particular channel over a year can be more volatile than the time spent viewing some programming on a broad tier.

But I've got one streaming subscription I keep going continuously, because I subscribe annually, Netflix which I keep running most of the time but will turn off when I am particularly busy or catching up on content on some other sites, and then three subscription sites that I have the subscription cancelled or postponed (depending on the site) more often than the subscription is active.

Which is taking it from a la carte by channel to a la carte by channel by month.

Or my friend who cares nothing about any sport except college football who downgrades his satellite subscription to the cheapest bare bones every January and upgrades every August.

Churn really increases customer acquistion costs.

That triggers another thought.

Wall Street loves return on investment. One of the big radio conglomerates (Clear Channel maybe?) several years ago dumped the radio rights to the Dodgers. The explanation was they made slightly better profit on the Dodgers than their other programming but the cost of acquistion was so high that their return rate didn't justify the investment, they were trying to raise their ROI for the analysts.

If ESPN or AMC has to have $20 subscriptions just to get the same profit they have now, their stock price will fall (in ESPN's case ameliorated by being part of a major conglomerate) because they are spending so much more to get the same dollars of profit, that means they will have significant investor pressure to push the price even higher to increase the amount of profit.