Cable Companies... could this system work? (1 Viewer)

[Lew Crippen]

I’m not saying that some of these complaints are not legitimate—but for the most part, why not just do away with cable and get your channels OTA?

When I moved back to the States I went with a satellite service rather than cable—but I still get most of my local stations in HD, OTA.

At some point the service provided by my satellite service may cost more than the additional services they provide—in which case I’ll just say, thank you very much, but I’ve decided to cancel my service.

For the moment, however, the movie channels like TCM, ESPN, HDNet and HDNet movies, Discovery HD, HBOH, FOX Sports Net, BBC America, Univision (my Spanish is pretty bad, but they have a lot of soccer), and a plethora of news networks provides enough for my monthly fees.

True, I have no use for any of the shopping networks and a ton of the special interest stations that are also provided—but as one person already mentioned, I know how the economics works—the more subscribers, the lower the rate to the provider. The lower the rate to the provider, the lower the rate to me, plus the more profit to the provider—which is not all bad—some of that money goes into putting new satellites in the sky and providing other services, such as my free Tivo (although they are getting there money back on my monthly fees) and my incredibly inexpensive HD STB.

 

[Don Black]

Be careful with your blame. A substantial portion lays with the programmers who force the MSOs into buying bundles of channels and keeping expensive channels on basic tiers instead of premium ones (so everyone has to pay). The programmer's reasoning is two-fold: 1) I want to launch new channels to make more money and I need the MSOs to carry these new channels so that I can have an audience; and 2) If I force the MSOs into keeping this expensive channel on a basic tier, then I get a monthly payment for every household that subscribes to that MSO plus more eyeballs for my advertisers.

The consumer's beef is always with the pay-TV provider since that's who he/she pays. But the economics of the industry are really much more complex than that. The MSOs certainly aren't innocent in all of this. They play the gatekeeper role with wild abandon. But it isn't always their fault.