À La Carte Television finally makes financial sense for TV networks(ottsquared.com)
ottsquared.com
À La Carte Television finally makes financial sense for TV networks
https://ottsquared.com/road-to-a-la-carte-tv-fa455b22dafe
48 comments
What consumers and the writer don't get is that the price won't go down overall. All of the channels will have to charge more to stay in business without the cross subsidization. So you'll still end up paying about the same amount to get the channels you want.
https://stratechery.com/2017/the-great-unbundling/
The only thing that is working is not forcing consumers to pay for expensive sports channels that they don't want. Consumers who love sports will pay the price to get it.
People call themselves "cord cutters" but are still paying for services like Sling, Hulu, etc. that are still being delivered by a cord coming into their home.
That being said, I gladly play $45 a month for Sling, Hulu, CBS All Access to replace cable, $10/month for Starz during the summer, $10 for Netflix (which I would have even with cable), and $100/year for Amazon Prime for all of the benefits including Amazon Video.
All together, that's not much cheaper than the quoted price for cable, but the benefits over cable are:
* No extraneous fees -- network access, regional sports, fake government fees (fees that are not charged by the government but the cable company wants you to think they are), HD technology fee, and cable box rental fee (in my case an extra $50 for five additional TVs). All of the fees together would add $80+ to my monthly bill.
* "TV Anywhere". The apps will sync up what I watched and what I haven't between devices -- my phone, iPad, Roku sticks, and AppleTV's. I also don't have to deal with the cable company's box.
* I can cancel any service without having to deal with a retention department.
https://stratechery.com/2017/the-great-unbundling/
The only thing that is working is not forcing consumers to pay for expensive sports channels that they don't want. Consumers who love sports will pay the price to get it.
People call themselves "cord cutters" but are still paying for services like Sling, Hulu, etc. that are still being delivered by a cord coming into their home.
That being said, I gladly play $45 a month for Sling, Hulu, CBS All Access to replace cable, $10/month for Starz during the summer, $10 for Netflix (which I would have even with cable), and $100/year for Amazon Prime for all of the benefits including Amazon Video.
All together, that's not much cheaper than the quoted price for cable, but the benefits over cable are:
* No extraneous fees -- network access, regional sports, fake government fees (fees that are not charged by the government but the cable company wants you to think they are), HD technology fee, and cable box rental fee (in my case an extra $50 for five additional TVs). All of the fees together would add $80+ to my monthly bill.
* "TV Anywhere". The apps will sync up what I watched and what I haven't between devices -- my phone, iPad, Roku sticks, and AppleTV's. I also don't have to deal with the cable company's box.
* I can cancel any service without having to deal with a retention department.
You forgot one of the biggest upsides: many of the services you mentioned have few or no ads.
Personally, I've refused to pay for any TV product that contains ads for something like 10 years now and have absolutely no regrets. I almost never watch broadcast TV either because of the presence of ads.
Personally, I've refused to pay for any TV product that contains ads for something like 10 years now and have absolutely no regrets. I almost never watch broadcast TV either because of the presence of ads.
On the other hand, this would allow the market to kill off unsustainable channels. (And hopefully reinforce those that have small but passionate viewers, e.g. Science)
My contention is that almost all channels outside of sports are unsustainable at market price. I doubt enough people would be willing to pay the full cost for most channels.
Oh god, I had to +1 you here for dealing with retention departments. They need to die. Like with a vengeance. I already want to cancel. Don't make me want to kill you.
Netflix streaming, in my opinion, has degraded significantly in terms of programming choices.
A few years ago when we got the service you could find tons of fantastic movies and tv shows to watch. Today I've switched away in frustration after spending 30+ minutes browsing and searching for something to watch. The menu is mostly filled with crappy 1 to 3 star content. You can't even find good movies from the 80's and 90's. Sure, maybe a few here and there but, for the most part the experience is an exercise in futility.
My kids are watching a Spanish kid's show to improve their language understanding. They are 60 episodes into a 260 episode show. When they are done I think I might cancel Netflix and move on.
Here's the criteria: When I find myself browsing regular TV listings to record good movies to watch and endure having to commercial-skip every two minutes to watch them. What that happens. And you actually end-up with a bunch of really good contemporary movies recorded. That's the moment when you realize Netflix, today, has a bad product. And that's already happened multiple times.
A few years ago when we got the service you could find tons of fantastic movies and tv shows to watch. Today I've switched away in frustration after spending 30+ minutes browsing and searching for something to watch. The menu is mostly filled with crappy 1 to 3 star content. You can't even find good movies from the 80's and 90's. Sure, maybe a few here and there but, for the most part the experience is an exercise in futility.
My kids are watching a Spanish kid's show to improve their language understanding. They are 60 episodes into a 260 episode show. When they are done I think I might cancel Netflix and move on.
Here's the criteria: When I find myself browsing regular TV listings to record good movies to watch and endure having to commercial-skip every two minutes to watch them. What that happens. And you actually end-up with a bunch of really good contemporary movies recorded. That's the moment when you realize Netflix, today, has a bad product. And that's already happened multiple times.
> Netflix streaming, in my opinion, has degraded significantly in terms of programming choices.
One exception I'd say is that Netflix Original Programming is getting quite good. Narcos, The Crown, and Stranger Things are all fantastic.
But yes, in general their selection of quality 3rd party titles is horrible. It's rare to browse Netflix hoping to find a specific movie and not be disappointed.
One exception I'd say is that Netflix Original Programming is getting quite good. Narcos, The Crown, and Stranger Things are all fantastic.
But yes, in general their selection of quality 3rd party titles is horrible. It's rare to browse Netflix hoping to find a specific movie and not be disappointed.
I haven't paid much attention to Netflix originated content. Any more I absolutely dread switching over to Netflix because I know it'll be a 30+ minute exercise in frustration. My wife and older kid ignore it completely.
Unless things change I'm cancelling by the end of the year.
Amazon Prime seemed a bit better but lately it seems to be filled with the same kind of crud. Bad "B" and below movies.
Seriously, who watched this crap?
There are thousands of good movies out there. Maybe it's a revenue struggle with the studios, I don't know. The fact that you can't even find "The Marx Brother" or "The Three Stooges" or "Abbott and Costello" on these services might be a clue. In other words, you can't find popular black and white movies that by all accounts should fill these services. Or good 80's, 90's and earlier TV series. Not there. Maybe a few here and there, but not en-masse as they should be.
I was looking for Battlestar Galactica the other day. Not the goofy one, the other one with Edward James Olmos. It was there a few years back but no-longer available. My oldest kid wasn't old enough to watch it then but he could now (and it is a good series). Gone. Not sure why.
Unless things change I'm cancelling by the end of the year.
Amazon Prime seemed a bit better but lately it seems to be filled with the same kind of crud. Bad "B" and below movies.
Seriously, who watched this crap?
There are thousands of good movies out there. Maybe it's a revenue struggle with the studios, I don't know. The fact that you can't even find "The Marx Brother" or "The Three Stooges" or "Abbott and Costello" on these services might be a clue. In other words, you can't find popular black and white movies that by all accounts should fill these services. Or good 80's, 90's and earlier TV series. Not there. Maybe a few here and there, but not en-masse as they should be.
I was looking for Battlestar Galactica the other day. Not the goofy one, the other one with Edward James Olmos. It was there a few years back but no-longer available. My oldest kid wasn't old enough to watch it then but he could now (and it is a good series). Gone. Not sure why.
It's gone because they know what they pay for the rights and they know how many people watch the content, and at some point either the rights got more expensive or the viewership went down, and they presumably get more eyeballs for their buck elsewhere.
I would imagine the viewership for old black and white movies is infinitesimal, even if the rights are cheap. The value proposition apparently doesn't make sense.
I would imagine the viewership for old black and white movies is infinitesimal, even if the rights are cheap. The value proposition apparently doesn't make sense.
They've never been very good for movies on streaming. And, unfortunately, their DVD back catalog is being allowed to degrade as well.
The movies have always been pretty bad on netflix Streaming. The TV shows have declined somewhat, but it's still a great deal.
A senior Netflix technical person told me once (and this was mostly before their original content) that "People come to Netflix streaming for the movies and they stay for the TV."
I agree that the non-original TV show content seems to have declined somewhat but the good original programming makes up for it.
I agree that the non-original TV show content seems to have declined somewhat but the good original programming makes up for it.
I really strongly disagree. In our household we get a big cable TV package because we couldn't opt out of it to get the highest tier internet service.
The only networks we watch are rural cop shows and Food TV with some rare cable TV news and only one network out of the options there. There are hundreds of other junk channels that I never watch. There is one game show channel that my in-laws like to watch when they visit.
The other channels just have nothing that ever appeals to anyone in the household. We're more than happy to occasionally (like once every 2 years) watch a TV show like Breaking Bad on Netflix years and years after it was a popular event. Would be happy to downgrade to a package that has Food Network and almost nothing else.
The only networks we watch are rural cop shows and Food TV with some rare cable TV news and only one network out of the options there. There are hundreds of other junk channels that I never watch. There is one game show channel that my in-laws like to watch when they visit.
The other channels just have nothing that ever appeals to anyone in the household. We're more than happy to occasionally (like once every 2 years) watch a TV show like Breaking Bad on Netflix years and years after it was a popular event. Would be happy to downgrade to a package that has Food Network and almost nothing else.
>In our household we get a big cable TV package because we couldn't opt out of it to get the highest tier internet service.
That kind of practice should be banned, and is generally a clear indicator of monopoly status. If they had true competition they would be absolutely slaughtered forcing customers to buy TV packages to get the internet package they want. It's one thing to offer a discount for bundling, it's another thing entirely to force bundling to get certain types of service.
That kind of practice should be banned, and is generally a clear indicator of monopoly status. If they had true competition they would be absolutely slaughtered forcing customers to buy TV packages to get the internet package they want. It's one thing to offer a discount for bundling, it's another thing entirely to force bundling to get certain types of service.
In the rural area that I live in, the local/regional companies provide awful service at an average price. The national company I subscribe to offers excellent internet / good cable / great, friendly, & knowledgeable technicians at a relatively high price.
While I would love to be able to order channels a la carte and get the best internet available, I don't have good options for switching -- the other internet providers suffer from typical rural ISP issues.
From personal experience with the same company in a major US city, the rural service ranks among the best ISPs I've ever used whereas in the big city it was the absolute worst. There are actually options where I live, but there's only one good choice -- the newcomer national behemoth.
I think in general telecom competition should be allowed to happen more often, but in this particular case I'm not sure it's a competition issue. I would have to investigate more about the local/regional/state situation to really decide.
While I would love to be able to order channels a la carte and get the best internet available, I don't have good options for switching -- the other internet providers suffer from typical rural ISP issues.
From personal experience with the same company in a major US city, the rural service ranks among the best ISPs I've ever used whereas in the big city it was the absolute worst. There are actually options where I live, but there's only one good choice -- the newcomer national behemoth.
I think in general telecom competition should be allowed to happen more often, but in this particular case I'm not sure it's a competition issue. I would have to investigate more about the local/regional/state situation to really decide.
Even for lower tiers it is sometimes cheaper to bundle -- I suspect one reason is because it allows their "cable TV subscriber" count to be higher.
This has implications for the overall outlook of both the industry and cable company, fees for channels the cable company is paid to carry, and cost of advertisements, especially on channels the cable company owns.
This has implications for the overall outlook of both the industry and cable company, fees for channels the cable company is paid to carry, and cost of advertisements, especially on channels the cable company owns.
There are some people who would benefit--those who watch one or two channels only--but there are people who would get screwed. I watch maybe 5 hours of cable tv a week, but it's many different channels during the course of the year. USA when Mr. Robot is, AMC when TWD and BCS, FX when Fargo and Americans, Sundance when Hap and Leonard, some random channel playing a movie I want to watch.
And it will only save money for people who watch less channels than average. You might say people who watch more channels should pay more, but that really doesn't make much sense really.
Should someone who watches Fox News 18 hours a day pay 10 times more than someone who watches 10 channels a month for 2 hours combined a day?
And it will only save money for people who watch less channels than average. You might say people who watch more channels should pay more, but that really doesn't make much sense really.
Should someone who watches Fox News 18 hours a day pay 10 times more than someone who watches 10 channels a month for 2 hours combined a day?
Why not get those shows from a service like iTunes, or Amazon, or whatever? I bet it wouldn't cost any more than you currently pay for all the channels, and you have the advantage of being able to watch whenever you want and on any device, even when away from home. You wouldn't get sudden new fees or have to pay a rental fee for your cable box.
I'm the same kind of viewer.
In general, I think the bundles appealed to the "I have to watch X" demographic. When in reality there are a large number of people who are perfectly happy to watch something else, if X doesn't happen to be on a channel they subscribe to.
There's more quality content nowadays than viewer eyeball-hours.
Also, curious question for someone up to date on cable tech. What's the technical ability to deliver a la carte channel subscriptions?
In general, I think the bundles appealed to the "I have to watch X" demographic. When in reality there are a large number of people who are perfectly happy to watch something else, if X doesn't happen to be on a channel they subscribe to.
There's more quality content nowadays than viewer eyeball-hours.
Also, curious question for someone up to date on cable tech. What's the technical ability to deliver a la carte channel subscriptions?
Really what needs to happen is a sensible way to buy shows a la carte, and move away from networks as a whole. I want to watch a single show on a single network (for example, The Walking Dead on AMC). Beyond that one show, everything else is filler to me, designed to justify the price of the network (even within a cable bundle).
Shows can be purchased a la carte currently, but the price is still out of whack ($30 for a season on iTunes) for what customers expect.
Shows can be purchased a la carte currently, but the price is still out of whack ($30 for a season on iTunes) for what customers expect.
For me, $30 to buy 20 hours entertainment doesn't strike me as clearly out of whack. It's fairly consistent with the rates to purchase movies for example.
I'd prefer to be able to rent for a single view at a lower price, yes. But it seems reasonable for something that I really want to watch.
I'd prefer to be able to rent for a single view at a lower price, yes. But it seems reasonable for something that I really want to watch.
If you only watch one show on a network, it's easier and cheaper to just buy it. The Americans is the only show I watch on FX at the moment, so I buy that. I can also almost guarantee I wouldn't want any of the content on any of the other channels that would come in a bundle along with FX.
Consumers like buffets. They also don't want to pay a lot of money. You're already seeing add-on channels for Amazon. I'll grumble but generally I prefer a la carte unless the buffet doesn't carry a significant premium over the a la carte price. There are very few shows that are must see for me and I'll buy those individually.
But a la cart won't change the average price for the average consumer. The price the cable company pays per station has the viewership figures baked in. They know the average customers doesn't watch most channels. You aren't really paying for them now.
Now each customer isn't the average customer. Some will win (because they use very few channels), but some would lose (light users who watch a large variety of channels sporadically).
Now each customer isn't the average customer. Some will win (because they use very few channels), but some would lose (light users who watch a large variety of channels sporadically).
I was speaking about myself specifically. I watch very little through my cable subscription and basically never turn the TV to "whatever is on."
I agree that on average people are unlikely to save a lot though it may change some behaviors to the degree that watching something becomes an affirmative decision to spend money.
I agree that on average people are unlikely to save a lot though it may change some behaviors to the degree that watching something becomes an affirmative decision to spend money.
Your assumption is that everyone watches a lot of shows across networks/packages and that they must watch the latest. We currently watch two shows on FX and one on AMC. Everything else is either on Amazon, Netflix, Youtube or OTA broadcast.
In total our household probably watches 20 hrs or less a week of TV from the above sources.
In total our household probably watches 20 hrs or less a week of TV from the above sources.
Honestly, is it that hard to make a legal version of PopcornTime/Solarmovie/Putlocker? I would have to assume that it must be given the state of things.
I'm probably a terrible example here because I don't have a TV, but I pay for the cable bundle with my internet.
Seems like what consumers want is to be able to go onto any of their devices, search for what they want to see and then watch it. Probably huge hurdles legally and from the studios.
I'm probably a terrible example here because I don't have a TV, but I pay for the cable bundle with my internet.
Seems like what consumers want is to be able to go onto any of their devices, search for what they want to see and then watch it. Probably huge hurdles legally and from the studios.
> Honestly, is it that hard to make a legal version of PopcornTime/Solarmovie/Putlocker?
Yes! I have some experience in this industry and it is pretty much impossible. Every level of the industry has long-standing practices with "optimized" expected fees. You have distribution package deals, release windows, release regions, etc. Any sense of new value is fought over like seagulls for potato chips and giving up a single penny is worth torpedoing contracts.
Netflix had the best chance of anyone, but even they could not do it. The price to make this software (likely a hardware box with DRM) available would be not be financially viable. I would estimate in the high hundreds per month, or in the low hundreds if they could limit what you watch and how much.
Yes! I have some experience in this industry and it is pretty much impossible. Every level of the industry has long-standing practices with "optimized" expected fees. You have distribution package deals, release windows, release regions, etc. Any sense of new value is fought over like seagulls for potato chips and giving up a single penny is worth torpedoing contracts.
Netflix had the best chance of anyone, but even they could not do it. The price to make this software (likely a hardware box with DRM) available would be not be financially viable. I would estimate in the high hundreds per month, or in the low hundreds if they could limit what you watch and how much.
Do you think it would be possible if you bootstrapped something where you have a consistent userbase and then started paying creators based on the revenue you get from viewers/advertisers?
So lets say that popcorn time wanted to go legit. I don't know how many viewers they have but I would assume it's in the millions monthly. I guess they would have to be the sole source of viewership for production studios to agree to license to them, and even then they would have to fight other distributors for exclusivity.
So it seems the only way to get there is if you somehow get 100M daily viewers then you could have a compelling case to make for licensing.
So lets say that popcorn time wanted to go legit. I don't know how many viewers they have but I would assume it's in the millions monthly. I guess they would have to be the sole source of viewership for production studios to agree to license to them, and even then they would have to fight other distributors for exclusivity.
So it seems the only way to get there is if you somehow get 100M daily viewers then you could have a compelling case to make for licensing.
> So it seems the only way to get there is if you somehow get 100M daily viewers then you could have a compelling case to make for licensing.
Even then there is friction in the system. Look at some of the enormous distribution platforms for music like itunes and spotify. Some people still refuse to deal with them.
It is pretty hopeless. I think the difficulty is why ycombinator has been seeking disruption in the entertainment industry for so long.
Even then there is friction in the system. Look at some of the enormous distribution platforms for music like itunes and spotify. Some people still refuse to deal with them.
It is pretty hopeless. I think the difficulty is why ycombinator has been seeking disruption in the entertainment industry for so long.
The hurdles are ALL self inflicted. They have carved up the most vile contracts on regional content instead of global, time length, it's all a god awful self inflicted head wound.
They have literally allowed legally contracting themselves into a six foot grave.
They have literally allowed legally contracting themselves into a six foot grave.
What would a legal popcorntime look like other than iTunes, Google Play, Amazon video?
I bet iTunes has a better catalog that Popcorntime practically speaking.
I bet iTunes has a better catalog that Popcorntime practically speaking.
Basically a single stop for anything you want to watch irrespective of source.
So you can get House of Cards, NFL games, Flip this house etc... all through a single platform.
So you can get House of Cards, NFL games, Flip this house etc... all through a single platform.
Haven't had cable TV in as long as I've lived on my own (more then a decade). First off, I don't get a whole lot of value from it to justify the price. Second, I don't have time to arrange my schedule around shows I like ... frankly if it's not on demand on my schedule I don't watch it. Yeah, I could DVR it... but it's 2017 and the vendor should just do it for me.
Also, I'm unwilling to subsidize a handful of folks who watch sports channels (who collect the biggest fees) largely driven by the NFL. Doesn't help that I find NFL as an organization somewhat despicable too.
I've stuck with Netflix for the occasional movies / TV shows. I don't mind seeing them late as I don't want to wait artificially for next weeks EP (around my schedule not theirs). Occasionally when it took a while to get to Netflix/Amazon I bought a season and was happier for not having to be bother with OTA scheduling.
Also, I'm unwilling to subsidize a handful of folks who watch sports channels (who collect the biggest fees) largely driven by the NFL. Doesn't help that I find NFL as an organization somewhat despicable too.
I've stuck with Netflix for the occasional movies / TV shows. I don't mind seeing them late as I don't want to wait artificially for next weeks EP (around my schedule not theirs). Occasionally when it took a while to get to Netflix/Amazon I bought a season and was happier for not having to be bother with OTA scheduling.
Personally, I don't normally need any channels, I need shows. Frankly, if I didn't catch it with the DVR, then On-Demand is crap because of the "you can't fast forward!" crap. Then you pause it too long and can't fast forward at all to get back to where you were, all because of ads.
For me, Apple's Season Pass was definitely the best model for TV show viewing. You'd think it would be win-win:
- a win for consumers because they only pay for the shows they want to watch
- a win for producers because they get a lot more dollars per viewer than they get now
But of course, that model has been a massive failure. Consumers panned it because it seemed expensive, and of course there are many networks/shows that aren't there. Maybe the networks would have come if the model was successful, but I doubt that Netflix would ever have...
- a win for consumers because they only pay for the shows they want to watch
- a win for producers because they get a lot more dollars per viewer than they get now
But of course, that model has been a massive failure. Consumers panned it because it seemed expensive, and of course there are many networks/shows that aren't there. Maybe the networks would have come if the model was successful, but I doubt that Netflix would ever have...
Couching the discussion as a la carte channels instead of a la carte shows is some kind of jedi mind trick by studio execs.
Apple Season Pass should be like $3/season, not $5/episode.
Edit: Netflix didn't negotiate certain seasons or episodes of Breaking Bad, nor did it negotiate all of AMC's content. Netflix negotiated rights to specific shows.
Apple Season Pass should be like $3/season, not $5/episode.
Edit: Netflix didn't negotiate certain seasons or episodes of Breaking Bad, nor did it negotiate all of AMC's content. Netflix negotiated rights to specific shows.
$35 per show per season seems very fair to me. I currently pay about $100 per month for cable, Netflix and HBO. We watch far fewer than 36 shows so we're currently paying more than $35 per.
I 100% agree. IMO this is the same problem I see on YouTube. A channel becomes popular (and in some cases partly funded by YouTube itself) and adds new shows to their channel. This makes it harder to find the content I want and less likely to watch.
Just sell me your biggest, dumbest pipe and then fuck off.
I want nothing to do with any of the TV that they sell, but because the cable companies have gotten used to selling fatter bundles, the average price goes up.
And the price of "internet only" service goes up too, so that their stupidly expensive TV packages look reasonable. It's such a goddamn racket.
I want nothing to do with any of the TV that they sell, but because the cable companies have gotten used to selling fatter bundles, the average price goes up.
And the price of "internet only" service goes up too, so that their stupidly expensive TV packages look reasonable. It's such a goddamn racket.
People spent $$$ getting MBAs so they can fight you tooth and nail to do the exact opposite.
It's great! No 80-90 a month, now it's 10-20.
Personally I like CBS All Access with Hulu, but sometimes I drop Hulu to get Netflix.
There are 3 or 4 options for lots more channels at 30-40/month. Streaming seems like a good deal so far.
Personally I like CBS All Access with Hulu, but sometimes I drop Hulu to get Netflix.
There are 3 or 4 options for lots more channels at 30-40/month. Streaming seems like a good deal so far.
Don't forget Amazon Prime. The content isn't that great, so I wouldn't go out of my way to get Prime for the streaming, but it's "free" with the shipping which tons of people use.
This might be good news for some, but I've moved on. I can't imagine what would compel me watch cable again. Same for listening to the radio...
Actually, I wish Pandora would take over radio stations and use their subscribers' driving patterns to optimize playlists. It'd be really interesting to hear a song on the radio that I'd actually choose to listen to, particularly if I was driving through Kansas.
Actually, I wish Pandora would take over radio stations and use their subscribers' driving patterns to optimize playlists. It'd be really interesting to hear a song on the radio that I'd actually choose to listen to, particularly if I was driving through Kansas.
ESPN has the worst problem. Sports viewing is in decline, and they overpaid for some big-name sports for years into the future. If packages don't include ESPN, they're toast.
IMO, ESPN, and related networks, should be its own streaming sports service. Where you can stream live ESPN exclusive stuff, watch teams from out of your viewing area that local channels provide, and watch highlights of past games.
I don't watch sports so I might be completely off the mark, but it seems like a form of entertainment people would gladly pay for (people pay tons for TV packages that include sports networks so they can keep up).
I don't watch sports so I might be completely off the mark, but it seems like a form of entertainment people would gladly pay for (people pay tons for TV packages that include sports networks so they can keep up).
Finally makes sense when no one wants television anymore, period. How convenient.
They are going to recoil from "You want to watch the Americans? Just 3.99 for FX Networks package." "Better Call Saul? 4.99 for the AMC package (5.49 during Walking Dead months)."
More tiers is probably the right way forward. Segregating sports, movie channels, prestige cable networks into packages might work.