Explanation of unbundleling Cable Channels

[Loren Pechtel]

But to have the big savings for the channels that aren't being watched much would mean that the average subscriber is paying a whole lot for them. That's assuming a model that all TV stations cost the same. Except it's not. It's something like that the average person is paying $6 for ESPN but $.12 cents for the smallest station.

We don't know how much is going to those unwatched stations.

 

[dismal]

But to have the big savings for the channels that aren't being watched much would mean that the average subscriber is paying a whole lot for them. That's assuming a model that all TV stations cost the same. Except it's not. It's something like that the average person is paying $6 for ESPN but $.12 cents for the smallest station.

Yeah I imagine the discussion would be something like this:

Cable guy: I want to offer ESPN and will pay you $6 per customer
ESPN guy: you can't have ESPN unless you take the Swedish Curling Channel.
Cable guy: but our research shows no one wants the SCC.
ESPN guy: I don't care it's a bundle
Cable guy: ok I will pay $6 per customer for the ESPN/SCC bundle
Ksen: zmfig if the evil cable companies didn't bundle I'd get ESPN for $3 and not get the stupid Swedish Curling Channel.
Higgins: it's not the evil cable companies fault they are victims of Disney!

 

[ksen]

were you eavesdropping on my line?

 

[EricK]

Unbundling, then, is the right wing option, and bundling is the left wing one.

Say 30,000,000 people want to watch a reality show about Kim Kardashian; 300,000 want to watch a film about Kim Jong Un; and 3,000 want to watch a documentary about Kimchi manufacturing, then the last group would have to pay much more per person to cover the costs of providing the program they want - and many might not be able to afford it. But with bundling, everybody pays the same price, and everybody gets to watch the programs they like.

Why are all the people who are usually in favour of this sort of approach, now against it? Normnally, the majority getting what they want and a minority being left out is the sort of thing they are against.

Yeah, the kimchi documentary wouldn't be made if the costs were honest. What's wrong with that?

There's nothing particularly wrong with it, except it seems a rather selfish attitude for the majority to only care about what they want and so deprive a minority of what they want. I get lots of channels I never watch, but it doesn't bother me. It's nice to know they are there for those who like them.

 

[Nice Squirrel]

But to have the big savings for the channels that aren't being watched much would mean that the average subscriber is paying a whole lot for them. That's assuming a model that all TV stations cost the same. Except it's not. It's something like that the average person is paying $6 for ESPN but $.12 cents for the smallest station.

We don't know how much is going to those unwatched stations.

Ad revenue or subscriber revenue?

 

[Jimmy Higgins]

So the channel providers are doing us all a favor by forcing bundling on Sat and Cable companies?

What channel is subsidized? There are currently two niche channels out there, TCM and Cartoon Network. All the other niche channels from Syfy to Sundance to Science to even The Weather Channel have lost the mission. What we have are channels that few people want, but channel providers forcing their carriage by holding their popular channels hostage.

And you are rebutting me how???? You seem to be arguing my position!

Sat/cable may not want to carry a channel, or are forced to pay more for a channel they don't want to pay because of the popular channel the same company owns.

The actual elephant, for the right-wingers here, is that companies like Disney want people to pay for channels that they don't watch. Sure, if channels were only paid for by people that actually watched them, maybe Disney wouldn't bid $200 million a MNF game to the NFL!

If the channels were of equal interest this wouldn't be a problem.

Oh shit... here comes the fake numbers fallacy.

There are 10 channels, each of which is of interest to 100,000 of the 500,000 subscribers.

What does that have to do with the ridiculous bidding on sports programming? ESPN costs 20 to 50 times that of other channels because Disney spends a ridiculous amount of money on sports programming and forces us to make up the difference (whether you watch ESPN or not).

You'll pay slightly less if what's offered is a bundle of all 10 rather than buying the two you want. If channel #10 is only of interest to 10,000, though, it should only get 1% of the money rather than 10%.

Please join us in the real world, not your poor statistical analogical hypothesia.

 

[Togo]

There's some truth to the article. If it simply were a matter of unbundling and offering the same lineup it wouldn't save money--you would get fewer channels but pay more per channel for the same (or probably a bit higher) total bill.

The elephant they don't want to mention is that the current system subsidizes stuff that couldn't stand on it's own. Unbundle the cable channels and those subsidized channels will go away--and your bill will go down by the amount of the subsidy.

No, it won't.

The problem is that the minority channels also get ad revenue. You can get more ad revenue from 6 popular slots and 6 unpopular but specialist slots than you can from 6 popular slots. The purpose of bundling, in part, is to raise subscriber and viewing rates on the specialist channels to the point where ad revenue can be collected in useful quantities. Unless the Swedish Curling channel is bundled, people won't subscribe to it in sufficient numbers, and you won't attract viewers who will be willing to watch the odd curling match here and there but don't like the sport enough to buy a subscription to the channel.

Unbundling, then, is the right wing option, and bundling is the left wing one.

Say 30,000,000 people want to watch a reality show about Kim Kardashian; 300,000 want to watch a film about Kim Jong Un; and 3,000 want to watch a documentary about Kimchi manufacturing, then the last group would have to pay much more per person to cover the costs of providing the program they want - and many might not be able to afford it. But with bundling, everybody pays the same price, and everybody gets to watch the programs they like.

Why are all the people who are usually in favour of this sort of approach, now against it? Normnally, the majority getting what they want and a minority being left out is the sort of thing they are against.

Because unbundling is government regulation to ensure a free and functional market. While right-wingers in theory support a free market, in practice their ranks are swelled by small-government conservatives, who hate government more than they like a functional free market. Similarly, while left wingers like to support minority interests, they tend to me more keen on freedom of choice.

There's also the slight problem that supporting bundling means supporting the right of producers to distort the market. It's not an impossible position to sell, but it's pretty hard.

 

[dismal]

No, it won't.

The problem is that the minority channels also get ad revenue. You can get more ad revenue from 6 popular slots and 6 unpopular but specialist slots than you can from 6 popular slots. The purpose of bundling, in part, is to raise subscriber and viewing rates on the specialist channels to the point where ad revenue can be collected in useful quantities. Unless the Swedish Curling channel is bundled, people won't subscribe to it in sufficient numbers, and you won't attract viewers who will be willing to watch the odd curling match here and there but don't like the sport enough to buy a subscription to the channel.

Unbundling, then, is the right wing option, and bundling is the left wing one.

Say 30,000,000 people want to watch a reality show about Kim Kardashian; 300,000 want to watch a film about Kim Jong Un; and 3,000 want to watch a documentary about Kimchi manufacturing, then the last group would have to pay much more per person to cover the costs of providing the program they want - and many might not be able to afford it. But with bundling, everybody pays the same price, and everybody gets to watch the programs they like.

Why are all the people who are usually in favour of this sort of approach, now against it? Normnally, the majority getting what they want and a minority being left out is the sort of thing they are against.

Because unbundling is government regulation to ensure a free and functional market. While right-wingers in theory support a free market, in practice their ranks are swelled by small-government conservatives, who hate government more than they like a functional free market. Similarly, while left wingers like to support minority interests, they tend to me more keen on freedom of choice.

There's also the slight problem that supporting bundling means supporting the right of producers to distort the market. It's not an impossible position to sell, but it's pretty hard.

Just a tip: when you're invoking the "free market" to justify the government telling someone what they must sell and how they must sell it you're doing it wrong.

 

[Nice Squirrel]

Just a tip: when you're invoking the "free market" to justify the government telling someone what they must sell and how they must sell it you're doing it wrong.

Because that is the only True Free Market.

 

[Jimmy Higgins]

No, it won't.

The problem is that the minority channels also get ad revenue. You can get more ad revenue from 6 popular slots and 6 unpopular but specialist slots than you can from 6 popular slots. The purpose of bundling, in part, is to raise subscriber and viewing rates on the specialist channels to the point where ad revenue can be collected in useful quantities. Unless the Swedish Curling channel is bundled, people won't subscribe to it in sufficient numbers, and you won't attract viewers who will be willing to watch the odd curling match here and there but don't like the sport enough to buy a subscription to the channel.

And there are virtually no Swedish Curling channels anymore. Most of them became mainstream channels that show mainstream and reality programming. TCM, Cooking, and Cartoon Network are the only ones that have survived.

 

[Togo]

Just a tip: when you're invoking the "free market" to justify the government telling someone what they must sell and how they must sell it you're doing it wrong.

No, you're doing it right. That's how free markets work - someone has to enforce standards that will be adhered to by all participants so that people can buy and sell with confidence. Without that, you don't have a market at all. That's why every market in the history of mankind has had rules.

What it doesn't do well is match the political expectations those who don't really understand markets and how they work, and have only a very narrow and limited understanding of freedom.

 

[Nice Squirrel]

No, it won't.

The problem is that the minority channels also get ad revenue. You can get more ad revenue from 6 popular slots and 6 unpopular but specialist slots than you can from 6 popular slots. The purpose of bundling, in part, is to raise subscriber and viewing rates on the specialist channels to the point where ad revenue can be collected in useful quantities. Unless the Swedish Curling channel is bundled, people won't subscribe to it in sufficient numbers, and you won't attract viewers who will be willing to watch the odd curling match here and there but don't like the sport enough to buy a subscription to the channel.

And there are virtually no Swedish Curling channels anymore. Most of them became mainstream channels that show mainstream and reality programming. TCM, Cooking, and Cartoon Network are the only ones that have survived.

Swedish Curling Jungle Truckers.

(There theme song is set to the tune of Teenage Mutant Ninja Turtles.)

 

[dismal]

No, it won't.

The problem is that the minority channels also get ad revenue. You can get more ad revenue from 6 popular slots and 6 unpopular but specialist slots than you can from 6 popular slots. The purpose of bundling, in part, is to raise subscriber and viewing rates on the specialist channels to the point where ad revenue can be collected in useful quantities. Unless the Swedish Curling channel is bundled, people won't subscribe to it in sufficient numbers, and you won't attract viewers who will be willing to watch the odd curling match here and there but don't like the sport enough to buy a subscription to the channel.

And there are virtually no Swedish Curling channels anymore. Most of them became mainstream channels that show mainstream and reality programming. TCM, Cooking, and Cartoon Network are the only ones that have survived.

So this whole subsidizing shows no one wants to watch thing is not really a thing either?

Remind me again what the actual problem that requires swift intervention with government force we have been talking about for 16 pages is again?

 

[Jimmy Higgins]

Just a tip: when you're invoking the "free market" to justify the government telling someone what they must sell and how they must sell it you're doing it wrong.

No, you're doing it right. That's how free markets work - someone has to enforce standards that will be adhered to by all participants so that people can buy and sell with confidence. Without that, you don't have a market at all. That's why every market in the history of mankind has had rules.

What it doesn't do well is match the political expectations those who don't really understand markets and how they work, and have only a very narrow and limited understanding of freedom.

Free market means the market is free to obstruct any and all competition from making their services and products available for the market.

 

[dismal]

No, you're doing it right. That's how free markets work - someone has to enforce standards that will be adhered to by all participants so that people can buy and sell with confidence. Without that, you don't have a market at all. That's why every market in the history of mankind has had rules.

What it doesn't do well is match the political expectations those who don't really understand markets and how they work, and have only a very narrow and limited understanding of freedom.

Free market means the market is free to obstruct any and all competition from making their services and products available for the market.

Yes, free market generally means when you own something you get to decide the terms on which others may have it.

So if you invest the time, effort and money to produce and package 24 hours of daily content on Swedish Curling into the Swedish Curling Channel, you may then decide to sell it bundled, unbundled, or give it away in cereal boxes.

Just like when a Mexican restaurant produces a chicken enchilada it can choose to sell it only in the #5 platter with a Chile Relleno, no substitutions.

No one is entitled to get a given chicken enchilada from a given restaurant a la carte if the restaurant (who owns the chicken enchilada) chooses not to sell it that way.

 

[KeepTalking]

Remind me again what the actual problem that requires swift intervention with government force we have been talking about for 16 pages is again?

Wow, really? That's what you got out of this discussion? That someone here is actually asking the government to intervene and force the cable channels to unbundle?

And here I thought we were talking about Bloomberg telling us that we actually want bundles when we clearly don't.

 

[Jimmy Higgins]

Remind me again what the actual problem that requires swift intervention with government force we have been talking about for 16 pages is again?

Wow, really? That's what you got out of this discussion? That someone here is actually asking the government to intervene and force the cable channels to unbundle?

And here I thought we were talking about Bloomberg telling us that we actually want bundles when we clearly don't.

There is nothing like a corporation telling me that they are charging us more because if they didn't they'd have to charge us even more than that.

 

[dismal]

Remind me again what the actual problem that requires swift intervention with government force we have been talking about for 16 pages is again?

Wow, really? That's what you got out of this discussion? That someone here is actually asking the government to intervene and force the cable channels to unbundle?

And here I thought we were talking about Bloomberg telling us that we actually want bundles when we clearly don't.

Well, let's ask and see:

Do we have anyone here wanting the government to force cable packages to be unbundled?

Everybody sound off.

For the record, my answer is "No".

 

[KeepTalking]

Wow, really? That's what you got out of this discussion? That someone here is actually asking the government to intervene and force the cable channels to unbundle?

And here I thought we were talking about Bloomberg telling us that we actually want bundles when we clearly don't.

Well, let's ask and see:

Do we have anyone here wanting the government to force cable packages to be unbundled?

Everybody sound off.

For the record, my answer is "No".

How about instead you read through the thread, and tell me exactly how many posts indicate that they want the government to intervene in bundling. When you find that there are exactly none, you can then count the number of posts that even mention it from one side or another (not counting any of the posts in our little sidebar here). You might find a handful, but I think it will become apparent that they are in no way the focus of this thread.

 

[dismal]

Well, let's ask and see:

Do we have anyone here wanting the government to force cable packages to be unbundled?

Everybody sound off.

For the record, my answer is "No".

How about instead you read through the thread, and tell me exactly how many posts indicate that they want the government to intervene in bundling. When you find that there are exactly none, you can then count the number of posts that even mention it from one side or another (not counting any of the posts in our little sidebar here). You might find a handful, but I think it will become apparent that they are in no way the focus of this thread.

Well, this is a political discussion forum not a what is the best way to sell cable products discussion forum. First clue there.

Second clue, the "right wing position" was defined somewhere early on as more or less "letting the cable companies do what they want" (see post 42 for example) so presumably the other side of the argument is not letting the cable companies do what they want.

Third clue is the various posters hurling invective for the rigthwingers and their free market positions. (see posts 88 and 89 for examples.) What is the opposite of free market positions again? Government intervention, I think. (see post 147, for example.)

But even with all that I'm still willing to put it out there as a direct question.

Is there no one here who thinks the government ought to do something about this bundling issue?

Is everyone content to let the enfettered market participants sort this out?

Because if there isn't we can probably move this whole discussion out of the politics forum and into the best-ways-to market-cable-channels forum.