28 November 2007

Reduced Cable Bill?

Over the past few years advocates have been touting that A La Carte cable TV packages would be much cheaper than the way packages and tiers are sold today. The cable companies say that this is not feasible with the technology today. Personally, I think that both sides don't see the whole picture and whatever gets worked out, hopefully it is a good compromise.

The FCC published a study in 2006 that stated consumers could save as much as 13 percent on their cable bill if they could choose channels a la Carte style. They also noted that the average household only watches 17 channels. While I don't know about the percentages, but I could agree that the average family watches only 17 channels. Although the New York Times article does not address how the prices would be reduced, it just states that they could.

The New York Times has now reported that an a la Carte channel selection would be bland and actually cost us more. They state as an example that ESPN costs $3 per subscriber while everything is packaged, whether the subscriber watches the channel or not. In their scenario, ESPN would have to charge more for their channel if it were not included as a package to keep the same profits. The scenario says that they may have to charge up to $12 per subscriber.

Personally, I feel that ESPN will not have a problem keeping subscribers as it is one of the more popular channels. Opponents of a la Carte programing feel it is the smaller lesser known channels that are going to lose out on the deal. Because the smaller or independent channels are less likely to be known or wanted, they will have to charge more to keep the same profit, something most people are not willing to pay for.

Both scenarios have their ups and downs and I'm not sure if the grass is really greener on the other side. Would I like to have a la Carte programing? In short, yes. But I feel that in some way my bill wouldn't decrease by much. The programmers and cable companies will make sure that they still profit and that their revenues will not decrease. Until a new startup company comes in and creates some competition, prices will continue to rise.

Competition is the answer, I feel. I don't think satellite is really providing much competition to cable, but if IPTV or fiber optic cables become common place, I think that we might see a drop in prices as competition would be in full swing. The possibility of this happening is not too far from the present as AT&T is beginning to use phone lines to deliver TV, and Verizon is working on new technologies as well.

Hopefully we will be able to choose the channels that we would like to watch and have the cheaper price that we want as well. But until that day most will still spend an exorbitant amount of money for their cable.

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