“Half the money I spend on advertising is wasted; the trouble is I don’t know which half” quipped John Wanamaker, US department store merchant. Perhaps we should recast that adage to, “most of my cable TV bill is wasted, the trouble is I don’t know how much.” This data from Nielsen shows that it is pretty much most of it. According to them average US TV households watch less than 10 percent of channels they receive from cable and satellite providers on an average. That’s a lot of television channels that no one wants, except cable companies who can charge carriage monies and also the consumers. Now they want to do the same with broadband. It makes me sick. Why don’t we have a la carte buying options — because it is not suitable for cable companies, which are nothing but a government sanctioned monopoly. For me, more is just more, not better!
I agree that cable TV stinks for so many reasons, including this kind of waste. I’ve been a cable-cutter for probably 3 years now. But there’s one thing to keep in mind: each cable channel is not equal in cost to the cable provider. They pay more for some channels, and less — or nothing — for other channels. I would bet more than half of the 189 channels in a typical lineup cost nothing or next to nothing for the cable operator, and they’re just passing them along because the infrastructure is already paid for, so why not?
What I would love to see laid out is the cost-per-channel (with channel brand names attached), but I doubt anyone in the industry is willing to share that level of detail. Because no matter what cable companies are paying for channel carriage, it’s waaaaaay less than what customers pay. The profit margins are criminal.
Yes, you are right — now one wants to share that pricing data. And yes, the profit margins are criminal because there isn’t really competition. Phone companies have a hand in glove relationship with the cable 🙂
actually much of the data is pretty findable. and it’s still irrelevant because its an ecosystem in play here, not just a single channel acting on their own. these arguments, while they have merit conceptually, just contribute to rabble rousing but are absent some critical data from the TV industry, and how it *actually* works. happy to share anytime.
The same ratio would probably apply to apps, radio stations, digital publications… It’s a great time to be a distributor of content, and a lousy time to be a content creator.
Good point!
except that as numerous studies have shown, moving to a la carte ends up being costlier for the consumer. the bundle makes it cheaper for the entire system to work. so what appears wasteful is actually just lightening the load.
and in reality, folks like me and you are actually riding the coattails of the mainstream TV audience, who watch substantially more than we do anyway…
Jeremy — I have opted out of the whole cable tv nonsense and choose to pay for a handful of channels and services and still spend less than 70 dollars a month including 200 Mbps broadband. I know, not everyone had that option but I do and I find it pretty useful to not have to overpay for stuff.
PS: Also as the data shows, people are watching a lot fewer channels than they are paying for. So that data is wrong? Or is that the pricing if a la carte channels if messed up.
its not just about a la carte, its the entire thesis you are making that is wrong. worthy of an in-person sitdown, not a comment-fest… 😉
Frankly, JT I have opted out of their packaged-based system. Today, I have about an hour or so to watch video of some kind. I am finding the path to easiest consumption. And so far that is either Netflix, iTunes/Amazon movie rentals or MLB/ESPN. Somehow I don’t miss shit/crap TV like you know those cable news channels.
Om, Would you consider this an example of a “Long Tail” business model? Is part of the problem poor marketing (cross promotion) for the other channels?
This is in sync with what I feel, nice read, just curious about what theme u use for your blog, feels nice
Couldn’t agree more. Sadly, like most sports fans – Go Everton – my only good access to sport is tied to buying a whole sports package even though NBCSN and Fox Sports have partially broken free of that model.
What do I have to look forward to? ATT buying DirecTV – I’m happy subscriber since their 3rd month on the street in 1994. Anyone think ATT will improve access, viewing experience, consumer cost?