Originally Posted by krm1580
With a la carte I would say be very careful what you wish for. People look at it in a vacuum and think if they currently get 100 channels for $100 its only going to $10 for the 10 channels they want. Its not.
Take something like ESPN. Right now ESPN is the most viewed cable channel and it fetches the highest per subscriber fee at better than $5 a head. If you have a cable company with 10 million subscribers they are forking over 50 million per year to ESPN to broadcast them. If you go a la cart and get an 80% take rate now they are only getting 40 million from the same cable company so they start charging $7 per head to make up the difference. No big deal right, nobody is crying over $2 per month right?
ESPN2 is normally a package deal with ESPN its not as popular so it does not carry the $5 premium that ESPN costs. Lets say it costs $2, a cable company is paying 20 million. What happens when the take rate is 50% for ESPN2? They need to fill a 10 million dollar gap in revenues. Guess where it comes from? A combination of higher ESPN and ESPN2. Now start running that down the list with ESPN3 or ESPN Desportes. Niche channels like MLB Network or SciFi are going to have to charge a lot more per subscriber to stay afloat.
The other thing to remember is these guys are in the business to make money and they will figure out a way to make money. ESPN2 isn't very popular, hey guess what, Monday Night football just moved to ESPN 2 and now its $10 per month just like ESPN.
I hate the current model where I am forced to pay for a host of channels I don't want, but I think with ala carte I will end up paying pretty close to the same amount of money.
I think you are mostly right, but ESPN is an extreme example. They by far and away get the highest figure per household. I would agree that those who subscribe to ESPN in an a la carte model would be punished the most.
Additionally, I think the whole model of cable TV will change soon. More people now than ever are fleeing because the prices have gotten so out of hand and there are other options out there. Everybody wants more money and at some point, something's going to give.