OnyxCougar |
02-11-2009 09:37 AM |
Quote:
Originally Posted by Clodfobble
(Post 530493)
I once saw a price breakdown that indicated that if everyone could shop for just the channels they wanted, a huge number of the specialized channels would have to cost so much that you'd be paying the same amount for your 10-12 channels anyway.
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I work for SL, actually, and this is true. The telecoms pay to retransmit channels on a package basis. The contract price is negotiated by a number of factors, including where in the channel lineup the channels go (limited tier, expanded tier, digital tier), and how many subs you have total (nationwide) paying for those tiers.
So lets say you have 100,000 customers total. All of them have Limited Cable. Most of them have Expanded, but only 60000 have Digital (which can be Limited + Digital no Expanded, or Limited, Expanded and Digital, which is further broken up into optional tiers, structured by interest, like sports or religious). More eyes are going to be seeing the limited channels (total) than the eyes watching the Digi sports tier. The programmers are going to want to put their channels in the tier that will have the most eyes watching thier advertising, so they will make a deal with the companies: You put these 2 channels on the Expanded tier, and these on the Digi Sports tier, and we'll charge you x price. If you don't want to put these 2 channels on the Expanded tier, then not near as many eyes will see our ads, and we'll have to charge you alot more for the same 4 channels to make up for lost revenue.
So:
To offer "a la Carte" channels would remove that bundled (read: discounted) price, and the companies would have to charge ALOT more per channel to just break even from what they pay the channels themselves, because the viewership would drop like a stone, which reduces ad revenue.
On a side note,
Now there is a new FCC rule that says broadcast stations can charge a fee to companies that retransmit their signals, and they are doing that with glee. Most companies have chose to pass that on to their customers, and this has resulted in rate hikes not only for cable, but satellite too.
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