http://www.latimes.com/news/opinion/commentary/la-oe-mccain-cable-tv-choice-20130523,0,1435979.story
Quote
John McCain: Cable TV, the right way
My legislation would ensure that consumers could buy only those channels they want to watch.
By John McCain
May 22, 2013, 4:46 p.m.
America's 100 million cable and satellite subscribers are forced to pay ever-higher bills for a growing number of channels they do not watch. The American people are being ripped off.
Meanwhile, services such as iTunes and Netflix have led a revolution in how consumers purchase and experience music and video entertainment. They have upended entire industries to allow consumers to buy digital content where they want, when they want. Amid all this change, two entrenched interests — the cable television and video programming industries — have teamed up to use federal regulations to stack the deck against consumers.
The numbers are striking. According to the Federal Communications Commission, the price for basic cable has grown by an average of 6.1% a year over the last 16 years — three times the rate of inflation and far outpacing the average American's paycheck. Cable bills are projected to continue rising to an average of $200 a month by 2020.
The 82% of American households that subscribe to cable or satellite television are stuck paying escalating prices for "bundled" packages of more than 100 channels, despite the fact that the average viewer tunes in to only about 18 of them.
Reinforcing this fundamental unfairness is a federal regulatory and legal framework that tilts in favor of cable companies and television programmers at the expense of consumers.
This framework, which includes arcane but important benefits such as "compulsory copyright licenses," "syndicated exclusivity," "network non-duplication" and "retransmission consent," was originally developed to help the fledgling industry grow. Today, these benefits, vigorously defended by armies of well-paid lobbyists, are helping sustain the status quo while failing to push the industry to meet modern consumers' evolving demands.
Case in point: I am a certifiable sports nut and ESPN fanatic. I enjoy just about every sport, and I stay awake many nights in Washington watching games in Arizona that don't end until well after midnight. Although I'd never go without ESPN, the fact is that millions of other viewers have no interest in sports programming. What many of these Americans are beginning to realize is that included in their cable bill is a charge of about $5 a month to carry ESPN.
That's an "ESPN tax" of $60 a year that they're forced to pay for having cable. And because it's part of their bundle, the only way to avoid it is to cancel their cable subscription entirely. This status quo is fundamentally unfair and wrong.
Now, many will say that the government should stay on the sidelines and out of the free market. I'd normally agree. But the truth is the government already has its thumb on the scale in favor of industry and against the interests of consumers. It's time for that to end.
I have introduced the Television Consumer Freedom Act, which aims to provide consumers with the option to buy only those channels they want to watch. The bill includes no mandates. Rather, it sends a powerful message to cable and satellite companies, such as Cox and DirecTV, and television programmers, such as Disney-ABC and NBC-Universal: If you want to continue to enjoy government-afforded regulatory benefits, offer TV-watching Americans an a la carte approach to programming rather than the take-it-or-leave-it ultimatum we have today.
Another provision in the bill seeks to end the practice of sports team owners punishing fans by blacking out home games that don't sell out. It provides that games taking place in publicly financed stadiums can't be blacked out.
The reaction to my proposal could be a case study of the trouble that common-sense ideas too often face in Washington. Consumer groups and everyday citizens roundly support it. If it were up to my Twitter followers, this bill would already be law. But entrenched interests, including the cable and television programming companies whose bottom lines may be affected by any effort to empower consumers, have made it clear they're girding for a fight. They're firing up their legions of lobbyists and preparing public relations campaigns to convince Congress of the remarkable "value" of the bundles they force on their subscribers.
This is an uphill battle, but I'm sure that the market will ultimately find a way to meet consumer demand. Many industries over the years — from the stagecoach builders and saddle makers to those who made the eight-track tape and the Sony Walkman — didn't much like the change forced on them by the tide of history. Sooner or later, companies standing in the way today will face a similar choice: Meet consumers' demands or become obsolete.
John McCain (R-Ariz.) is a member of the Senate Committee on Homeland Security and Governmental Affairs.
I'd trim down to about ten total channels. :)
That would be great :wub:
Yes to Longhorn Network. No to Lifetime.
History Channel is all humanity needs. Or deserves.
Quote from: MadImmortalMan on May 23, 2013, 02:06:15 PM
I'd trim down to about ten total channels. :)
:hmm:
AMC
F/X
USA
Nat Geo Wild
Animal Planet
BBC America
GSN
ESPN for college football season
Plus the networks. Though I suppose I could cut Fox and CBS to get down to 10.
No matter how the rules change, the cable companies will still find a way to screw us.
SHAREHOLDER VALUE!!!
McCain needs to do this same thing for satellite radio too. I would subscribe to Sirius XM but the *only* thing I want to listen to is Stern, and last time I checked you have to buy like 50 channels minimum, which irritates me because I would definitely never listen to anything else I'd be forced to buy. :glare:
You don't like music?
There is no good reason to think that customers would benefit from a la carte pricing. Cable TV is a classic case for bundled pricing because of low marginal costs of delivery and very high variance of demand for component elements.
It is quite possible that a la carte pricing for the components would be very high; 10 channels bought separately could easily cost as much as 150+ bundled. Channels that have strong core audiences like AMC are going to be particularly able to command premium pricing.
What Joan said. The people who think they'll end up with $5 cable bills will be sorely dissapointed.
Quote from: Admiral Yi on May 23, 2013, 03:05:51 PM
What Joan said. The people who think they'll end up with $5 cable bills will be sorely dissapointed.
:(
Actually with sports stations I figure I would be paying roughly the same since they are all so pricey.
Quote from: Peter Wiggin on May 23, 2013, 02:56:47 PM
You don't like music?
I do like music. But I have tens of thousands of MP3s, so I don't need to pay for it. :showoff:
Quote from: The Minsky Moment on May 23, 2013, 03:03:05 PM
There is no good reason to think that customers would benefit from a la carte pricing. Cable TV is a classic case for bundled pricing because of low marginal costs of delivery and very high variance of demand for component elements.
It is quite possible that a la carte pricing for the components would be very high; 10 channels bought separately could easily cost as much as 150+ bundled. Channels that have strong core audiences like AMC are going to be particularly able to command premium pricing.
I wonder if some niche stations would be badly hurt. For example, some sport stations with particularly strong followings in certain regions charge high per subscriber fees despite offering little highly viewed content. The business model is almost a perversion of pay per view: but rather than charging each viewer $50, they charge $1 per subscriber. The cable companies feel obligated to offer the channels because a small portion of their audiance will go ballistic if they don't.
Quote from: The Minsky Moment on May 23, 2013, 03:03:05 PM
There is no good reason to think that customers would benefit from a la carte pricing. Cable TV is a classic case for bundled pricing because of low marginal costs of delivery and very high variance of demand for component elements.
It is quite possible that a la carte pricing for the components would be very high; 10 channels bought separately could easily cost as much as 150+ bundled. Channels that have strong core audiences like AMC are going to be particularly able to command premium pricing.
That's called "the market." If you think the price for a channel is too high, then you stop subscribing. If enough people agree with you, the provider will lower the price.
I mean, it is possible that the price of foodstuffs I'd like to have in my grocery cart, if priced separately, will be more than I want to pay. So I won't buy some things.
The real problem is how many, and which, options will be available to the consumer. There's a fixed bandwidth. With unbundled offerings, some channels with low demand just won't be available at any price to a given consumer. But that's already the case, so i think it is a problem consumers can live with.
Quote from: grumbler on May 23, 2013, 03:22:02 PM
I mean, it is possible that the price of foodstuffs I'd like to have in my grocery cart, if priced separately, will be more than I want to pay. So I won't buy some things.
You think shoplifting is OK just because the price is too high? Is this about sticking it to the shareholder value, CdM style?
Quote from: grumbler on May 23, 2013, 03:22:02 PM
That's called "the market."
It's not.
If the market controlled, distributors would presumably continue to bundle because that is profit maximizing and they would deny the a la carte option.
This is coercive legislation that is forcing market participants to act other than they would in the market.
I am no libertarian and I don't have any objection to the principle of legislating against market outcomes. I just don't think the result here is necessarily going to be what some of the supporters of the legislation think it will be. People should make informed votes.
Quote from: alfred russel on May 23, 2013, 03:19:31 PM
I wonder if some niche stations would be badly hurt.
It's very hard to predict because the market is complicated - you have 3 tiers of participant (content, distribution, consumption) and complex variations of content but with some overlap.
I do think the tendency will be for niche players to price high as a result of which there will be less quantity supplied, lower profits, but yet no real gain in consumer surplus.
Quote from: The Minsky Moment on May 23, 2013, 03:35:05 PM
Quote from: alfred russel on May 23, 2013, 03:19:31 PM
I wonder if some niche stations would be badly hurt.
It's very hard to predict because the market is complicated - you have 3 tiers of participant (content, distribution, consumption) and complex variations of content but with some overlap.
I do think the tendency will be for niche players to price high as a result of which there will be less quantity supplied, lower profits, but yet no real gain in consumer surplus.
I would think the truly niche stations would be fine. They have a market that is small, but dedicated, and likely willing to pay a big price to continue to receive that channel.
What would be in trouble would be some of the more generic channels that mostly show old re-runs. I even watch some of those channels, but would hardly pay even $0.25 per month to keep them.
I definitely agree with Minsky that this isn't going to result in shrinking cable bills, if passed.
Quote from: Barrister on May 23, 2013, 03:39:00 PM
I would think the truly niche stations would be fine. They have a market that is small, but dedicated, and likely willing to pay a big price to continue to receive that channel.
What would be in trouble would be some of the more generic channels that mostly show old re-runs. I even watch some of those channels, but would hardly pay even $0.25 per month to keep them.
I definitely agree with Minsky that this isn't going to result in shrinking cable bills, if passed.
I suspect they would be hurt, otherwise they wouldn't insist on being on standard cable.
My guess is that depending on the quantity and quality of original programming, the price they can charge their fans will be limited by the ability to go to a bar to watch the games.
Quote from: alfred russel on May 23, 2013, 03:58:58 PM
Quote from: Barrister on May 23, 2013, 03:39:00 PM
I would think the truly niche stations would be fine. They have a market that is small, but dedicated, and likely willing to pay a big price to continue to receive that channel.
What would be in trouble would be some of the more generic channels that mostly show old re-runs. I even watch some of those channels, but would hardly pay even $0.25 per month to keep them.
I definitely agree with Minsky that this isn't going to result in shrinking cable bills, if passed.
I suspect they would be hurt, otherwise they wouldn't insist on being on standard cable.
My guess is that depending on the quantity and quality of original programming, the price they can charge their fans will be limited by the ability to go to a bar to watch the games.
They're fighting it because they're making guaranteed money right now.
Quote from: The Minsky Moment on May 23, 2013, 03:29:30 PM
It's not.
If the market controlled, distributors would presumably continue to bundle because that is profit maximizing and they would deny the a la carte option.
If it is a market, then the distributor doesn't get to decide what you are offered. That only happens in a monopoly.
QuoteThis is coercive legislation that is forcing market participants to act other than they would in the market.
There are many examples of coercive legislation that prevents would-be monopolies from acting as they would like to. I am no libertarian and I don't have any objection to the principle of legislating against monopolistic outcomes. I don't think the result here is necessarily going to be what some of the supporters of the legislation think it will be, just as I don't think the result of
any other legislation is going to be what some of the supporters of that legislation think it will be. People should make informed votes.
Quote— three times the rate of inflation and far outpacing the average American's paycheck.
That fact hasn't had an impact on any other policy--from healthcare costs to the minimum wage--why start mentioning it now?
All of you, suck it up and swallow your force-fed Oxygen network.
Quote from: grumbler on May 23, 2013, 04:37:25 PM
If it is a market, then the distributor doesn't get to decide what you are offered. That only happens in a monopoly.
Monopolies do arise in markets. The two concepts are not mutually exclusive. Far from it.
And even in a non-monopoly situation, the producer always gets to decide the terms on which it offers its services. There are non-monopoly markets where bundling occurs.
QuoteThere are many examples of coercive legislation that prevents would-be monopolies from acting as they would like to.
Indeed there are. Some of them benefit consumers. Some of them don't.
I think one outcome of this legislation is that many channels would go out of business, since very few people would pay anything to have them. That's a good thing, IMO. We have way too many channels now, and this fragmentation is hurting TV as an entertainment option on the whole.
Quote from: CountDeMoney on May 23, 2013, 04:45:10 PM
All of you, suck it up and swallow your force-fed Oxygen network.
Don't get it here :(
Quote from: CountDeMoney on May 23, 2013, 04:45:10 PM
All of you, suck it up and swallow your force-fed Oxygen network.
Why should we pay so that you can watch Oxygen?
Quote from: garbon on May 25, 2013, 04:20:59 PM
Why should we pay so that you can watch Oxygen?
Because I have to pay so you can watch Logo, and Siegey can watch it when nobody's awake.
I used the parental lock on Logo.
:lol: Logo
WTF is Logo?
Quote from: Admiral Yi on May 25, 2013, 09:00:17 PM
WTF is Logo?
Gay tv station.
Actually, Seeds, I don't have cable. :D
SON OF A
Fine, I'll watch it.
I have a la carte channels :cool:
Well outside the mandatory basic bundle.
The only really a la carte channels I have seen are the foreign language channels (not including espanol), and they're about $20 each.
My tv unlock code is:
1234
Also my luggage locks.
Quote from: garbon on May 25, 2013, 04:20:59 PM
Quote from: CountDeMoney on May 23, 2013, 04:45:10 PM
All of you, suck it up and swallow your force-fed Oxygen network.
Why should we pay so that you can watch Oxygen?
If it weren't for Oxygen, everyone would still think that Lance Armstrong was legit.
Quote from: DGuller on May 25, 2013, 10:04:41 PM
Quote from: garbon on May 25, 2013, 04:20:59 PM
Quote from: CountDeMoney on May 23, 2013, 04:45:10 PM
All of you, suck it up and swallow your force-fed Oxygen network.
Why should we pay so that you can watch Oxygen?
If it weren't for Oxygen, everyone would still think that Lance Armstrong was legit.
So basically nothing of any real value.
I don't knw...