Loading ...A huge lawsuit has been filed against every cable provider (satellite included) for forcing users into purchasing hugely expensive packages when they only want 1 or 2 channels from that package.
The suit is seeking that users be able to piece-meal the channels they want instead of being controlled by the cartel created between the cable providers and content providers. Comments from the FCC chair have come forward recently in support of a move like this.
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September 21st, 2007 at 9:07 am
These people may want to be careful for what they wish. I honestly do not have much of a position either way on this issue, but there is sound economic reasoning that suggests a la carte pricing schemes will result in less choice without a great decrease in price for many consumers. Basically, one argument suggests that if we have a la carte pricing, then none of the content providers will receive as much as they do now from subscribers as there will be less subscribers for most any channel. Because of this, the content providers will be under pressure to charge more. This will lead to many channels beginning to charge more than they cost now (channels currently have prices that are charged by content providers, but the carriers pay the individual prices and bundle the price for us). And we all know from Econ 101 what happens when the price of a good increases — the quantity demanded for the good decreases (and in the case of tv channels, this means less eyeballs and thus less revenue from ads). So higher channel prices will result in even less customers, which of course leads to even less ad revenue. This could result in affecting fringe channels the most, as they may disappear if they raise prices and find that demand is insufficient to keep them going. So, consider that some channels may well disappear if their pricing and revenue numbers are effectively thrown into a blender. Whether this is good or bad for you depends on whether you are a fan of the specific fringe channels in question.
Like I said I don’t have strong feelings either way, but it will be interesting to see how this shakes out.
September 21st, 2007 at 9:36 am
Is this an argument for increasing the *quality* of broadcasts to secure the viewership instead of getting a free-ride along with the “Basic Expanded” packages from providers?
September 21st, 2007 at 10:41 am
Hmm, I don’t really follow the question.