This article has an interesting point buried deep down in the middle of it (that really isn't the point of the article), in that all of the new-ish things, like Sling or Vue or YouTube TV or otherwise look suspiciously like cable packages on the Internet. And that's something I can't quite get over.
I've used Sling in the past, it can be a good bridge if you've cut the cable and want to hop back in because you miss it, but besides the delivery mechanism — I can bring my own device and it streams over the Internet — I don't see that much of a differentiator from cable. With either package of Sling, I'm still getting a bunch of channels I have no interest in, and while the price may be less per month than cable, it still _feels_ like 70% of the money I'm paying is going towards channels I have absolutely no interest in. Not to mention all the commercials I have to watch with it, not just in live viewings (because that's part of the stream, I get that), but even in on-demand things.
I ask this honestly: is there something I'm missing here? People that I know that haven't cut cable because they would miss this or that laud these products as "the thing that may finally get them to cut cable," but this feels like cable just over streaming.
> 70% of the money I'm paying is going towards channels I have absolutely no interest in
Why does that bother people so much? The incremental cost of delivering you a new channel is zero, so it makes sense to just deliver all of them. Where is the wasted money that's implied by a statement like this? If the average person watches 3 channels, and provider has a choice: charge $30 per channel and let everyone pick only the ones they want, or just charge $90 and let everyone watch whatever they want. I'd rather not be forced to choose the few channels that I'm locked into.
I was in the cable industry for 30 years and ESPN was (at the time) about $6 of a $60 cable TV package. It was the largest fee for produced content. Other channels had to pay to be included in the line-up just so they could subsist on advertising revenue.
I'm not suggesting whether ESPN is or is not worth that kind of premium but it's also not surprising to me that they're suffering this type of subscriber loss. More importantly, ESPN subscribers are CATV (or satellite, etc) subscribers which means these companies are also hemoraging subscribers.
In the case of CATV companies, the equipment and cable plant are huge expenses and these companies usually build out more plant financed on the assumption that there will be large cash flow. The cost of the plant isn't going down even if there are no television subscribers. I'd expect to see the cost of unbundled Internet services from these companies gradually approach the price of their "double-play" offerings (TV + Internet).
I'd argue that the idea got into my head because that's how it's being marketed upon purchase. For Sling at least, "$25 gets you all of these channels, or $35-ish gets you these, or just do $40 for EVERYTHING!" The marketing pitches value based upon quantity first, quality second.
I guess I _was_ just hoping that the coming revolution was something like a "pay per channel" thing, where channels set what they believe is a fair value to charge monthly and I can decide a la cart which ones I want. I get that the cost per channel would be higher, but with the ability to pick and choose, with no obligation into buying into the bigger picture, I feel like there's at least be more pressure for the networks to produce quality content. I know that's probably small-town thinking, but it's a hope.
The numbers in this article of "ESPN subscribers" is not equal to "people that watch ESPN," and I get why switching to a "only selling to people who are genuinely interested" model is absolutely terrifying — because the numbers inflate when subsidized across the entire subscription populace. That's the insurance model, and I don't see cable/Sling as entertainment insurance.
Not sayin' you're wrong, I'm just saying I wish there was another option that wasn't buying shows on iTunes if I just want one channel's programming.
Because the majority of people -- particularly a technically oriented crowd like we have here on Hacker News -- are seeing the bulk of their costs going toward channels we never watch. Like ESPN. The amount cable providers pay ESPN per viewer is ridiculously high compared to other channels. And for folks who never watch this stuff, we get a bit annoyed that that's what is causing our skyrocketing cable bills.
However you may think money is earmarked, the proper comparison is to the alternative world where channels are priced a la carte. And the standard econ analysis here is that everyone benefits from these bundles, not just the cable company and not just consumers of popular channels like ESPN. It's all about marginal costs.
The theory is that most of the cost of your cable package is going back to the networks. So from a technology side the incremental cost to add channels is zero but from the business side the cable operator still has to pay for each additional channel they put on their service. If they put fewer channels in the package they sell you then they could sell you the package for less money.
Sure but there's no incentive for anyone to make them cheaper. The cable operators make more by creating more expensive packages and then can justify it by putting a bunch of channels in them. The networks make more by forcing the operators to take small/niche channels if they want the popular channels. And since cable networks are not perfect substitutes, you can't just disrupt the industry by carrying a bunch of channels no one cares about. Also, because the channels have a fair bit of power in the relationship, they can structure their contracts with the operators in way that it's not economically viable for the operators to unbundle.
Where are you going to go? All the OTT providers are similar, it's just fewer channels for less money. No one has an incentive to sell you individual channels and the channels don't have an incentive to sign contract with someone who would sell you individual channels (because they can just do that themselves for $10/mo). Remember that a cable operator can't just decide to start carrying a channel, they have to sign a contract, so a channel can ensure that they can always under cut someone who's selling unbundled channels and still make a healthy profit.
If you're interested in more than a couple channels then it's going to be cheaper to get a package through someone like Playstation VUE or Sling. You're paying anywhere from $20-$75 for one of those services and once you put it on top of your monthly internet how much are you really even saving vs. a Double Play from a cable provider?
The selling point of Vue for me is the constant $35/month price. I can get a better deal from the cable company, but I'd have to renegotiate every year. The reduction of cognitive load here is freeing.
I don't think of it as "I'm paying for x channels I don't watch," I think of it as "I'm paying $35 for these channels that I do watch, and I'm happy to pay that."
You need to not look at the cost as cost-per-channel or cost-per-show, but in terms of value to you.
If you are paying $15 or $50 or $200 per month for TV, do you feel you getting adequate value? Are you getting the shows you want to watch?
An interesting thing about nearly all subscription services (cable, YouTube Red, Netflix, Sling, etc) is because they are fixed cost they have a built-in volume discount: the more you watch, the less you pay per hour.
So if you pay $100/mo for all your services, and watch a total of 2 hours a month, that costs you $50/hr. If you watch 6 hours a day, it costs you about $0.55/hr.
Let's say you're paying $185/mo for cable, and $15/mo for Netflix, but watch them evenly (3 hours a day each). Now cable is costing $2.03/hr and Netflix costs $0.16/hr. Are you getting value for the time? Are the shows you're watching on cable really worth paying 12 times more (plus being forced to watch commercials) than the ones you're watching on Netflix?
Your original point was about paying for stuff you didn't watch, but when you think of it in terms of value per hour, if you are watching 6 hours of content you want to watch, you are paying $0.55/hr. It doesn't matter if you get 6 channels or 600, the cost per hour of content is the same to you.
It's a different question you have to ask yourself if the service adds 200 channels (that you don't watch) and ups the cost so now it costs you $0.65/hr to watch the exact same content you were watching before: are you still getting adequate value for that price? If so, continue paying.
I think it may just be a mental thing. I have PS Vue and I got it initially because it let me change from month to month as well as cancel for certain months without any hassle. Ironically the reason we get it is so my wife can subscribe to ESPN during the months that big tennis tournaments happen. Then we just drop it after. I wouldn't dare attempt that with Comcast 4 times a year.
That makes sense, and as the article points out, that's sort of the gambit that HBO's run. (And it's worth mentioning, is how we consume HBO. Let the shows have their run, and then binge all the shows in 1-2 months per year for $30/year instead of $180.)
I guess my pitch isn't even abolishing cable packaging all together. If people like it and want it, then let them do it. But there's a lot of room between a cable subscription and wanting one or two channels. If ESPN makes $6/mo off subscriptions, and I don't have cable but want ESPN, $6/mo becomes a lot more enticing than $25-40/mo.
Again, it's sort of how HBO works. You can get it with your cable or get it on its own. And I'm sure it's a contract thing, but at this point it just feels like more money than what they're already getting; that they may find they gain more subscribers in the transition than they lose, or at least find more eyeballs that are actually watching versus those inflated subscription numbers from "people that have cable with ESPN attached" numbers.
I have Vue and I really like it. It's nice to use on the PS4 and even the Windows browser client is good.
But I pay just about the same for it as I paid for a cable package...so at the end of the day I'm not sure what the victory is other than not having to use a set top box designed in the aughts.
Well there's instant subscription and unsubscription. If you just want to keep your subscription for a couple months while your favorite show or sports season is on, no problem. Try that with cable.
Even if you keep it on all the time it's (for now) cheaper than cable.
Exactly. As a premier league fan living in US, sling for watching nbc sports is the best option for me. But they force a "package" for $25 per month and I actually don't watch any of the other channels.
I've used Sling in the past, it can be a good bridge if you've cut the cable and want to hop back in because you miss it, but besides the delivery mechanism — I can bring my own device and it streams over the Internet — I don't see that much of a differentiator from cable. With either package of Sling, I'm still getting a bunch of channels I have no interest in, and while the price may be less per month than cable, it still _feels_ like 70% of the money I'm paying is going towards channels I have absolutely no interest in. Not to mention all the commercials I have to watch with it, not just in live viewings (because that's part of the stream, I get that), but even in on-demand things.
I ask this honestly: is there something I'm missing here? People that I know that haven't cut cable because they would miss this or that laud these products as "the thing that may finally get them to cut cable," but this feels like cable just over streaming.