Because they say things like: "I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone."
Is his point that even though I say I'm unhappy paying for a lot of bundled crap to get the few shows I like, my revealed preference demonstrates that I am happy with my cable company monopoly?
Maybe, but I think he is grossly underestimating the disaffection most subscribers have with this arrangement. Or possibly he's referring to people who watch sports and they don't mind paying for WNBA in order to see NFL games.
If I go to an all-you-can-eat buffet and choose not to eat the crab meat, am I getting ripped off because I "paid for" the crab meat?
A good all-you-can-eat content subscription service is a wonderful thing. Yes, there are loads of problems with the current cable TV distribution model. The fact that it's an all-you-can-eat subscription isn't one of them.
Both internet service and TV distribution models are like an all you can eat buffet.
The TV distribution model lets me see the ribs at the end of the buffet line, but I have to wait behind an obese person who has to get some of everything and has a t-shirt which flashes random facts about vagisil.
The internet distribution lets me go straight to the ribs and maybe see the vagisil shirt out of the corner of my eye.
I do not think anyone would have a problem paying for the all-you-can-eat subscription if we were able to have more control over when we were able to watch the content. DVRs have been a major boost in this arena as have the video on demand option(though to my knowledge VOD has been restricted to premium movie channels). I think this "new generation" that all the content providers are bitching about merely want instant gratification.
An example: "Is that beer you are about to drink carcinogenic?"
TV Model: Sit through an entire barrage of ads and stories about puppies instead of enjoying that tasty brew for an hour.
Internet Model: Go to Google, search headlines for carcinogenic beer, see some beer ads on the right side of the page, Toss or Enjoy.
I think he is well aware of the consumer's desires. According to Cuban subscriptions are increasing and the networks are reluctant to try another medium because as far as they are concerned, they are currently in the money channel (no pun intended).
I stopped reading when I got to "The vast majority of broadband internet users already subscribe to a video service". Maybe in America this is true, but there's an awful lot of people out there using DSL.
In my corner of Europe, all the providers (both cable and DSL) are now into triple-play: TV+net+phone package deals (or even 4-play, with mobile too). I had some doubts about the TV-over-phonelines thing, but it seems to work OK.
For about 60 euro/month I get unlimited landline calls, uncapped 8Mb/s net, a DVR box and ~100 TV channels (including some kid stuff and movies, no premium sports). Just the net would be a little less than half the price.
I buy from a cable provider, but people with similarly priced packages from the DSL providers aren't complaining and seem to also have adequate performance.
It's not a matter of content people being stupid. His entire case against a la carte programming seems to be "it doesn't pay well enough". Be that as it may be, the alternative is currently dragging customers kicking and screaming to pay you exorbitant cable fees.
Is it any surprise that free, cheaper alternatives like iTunes, Hulu, et al, are taking off?
Maybe a la carte isn't the answer, but neither is cable bills and $70 a month subscriptions. The mere existence and massive popularity of other models (unprofitable as they may be) represent a very dissatisfied customer base.
My guess is that the costs of production will scale down to meet the new revenue reality of a la carte programming, instead of the other way around.
I think he would just come back and point to the increasing subscriptions. I guess this means that people are not only paying for monthly subscriptions but also using Hulu and iTunes.
