Thursday, July 19, 2012

LIGHTEN UP, YOU'RE TOO PRICE-SENSITIVE: If you're looking for Colbert or The Real World or SpongeBob or WWE:Raw or People Getting Maimed Plus Racism Point O or late-night Friends reruns, don't come looking at my house. DirecTV and Viacom can't decide on the price for Viacom's basic cable channels, so subscribers like me are back to getting our news from the news instead of from The Daily Show. Leading up to the blackout, the trenches of this war were in the crawl, where the content shriveled to maybe 70% of its size, and there were an insane three tiers of argumentative scroll: DirecTV's point at the top; Viacom's counterpoint in the middle; DirecTV's rebuttal at the bottom. And apparently getting the first and last word worked, because DirecTV is winning the P.R. battle.

In fights like this, there isn't a moral high ground.  It's just a business negotiation about how to divide up a customer dollar.  I don't blame either company for trying to make the best deal possible.  But I do hate being spun, and the point that DirecTV is pressing, apparently successfully, is this:  By bundling its popular channels with unpopular ones and charging high prices for the whole package, Viacom is increasing the consumer's satellite bill. 

Which leads this consumer to ask:  then is DirecTV going to reduce my satellite bill for the the duration of the blackout, when nobody is paying for or getting Viacom channels at all? 

Didn't think so.  Thanks, liars. 


  1. I've thought the same thing, but for some reason, throwing Disney Junior is supposed to fix everything? I love my TV and DVRs, but I'm really close to cutting the cord and trying to manage via Internet, Roku or Apple TV. 

  2. I've thought the same thing, but for some reason, throwing Disney Junior is supposed to fix everything? I love my TV and DVRs, but I'm really close to cutting the cord and trying to manage via Internet, Roku or Apple TV. 

  3. I've thought the same thing, but for some reason, throwing Disney Junior is supposed to fix everything? I love my TV and DVRs, but I'm really close to cutting the cord and trying to manage via Internet, Roku or Apple TV. 

  4. I've thought the same thing, but for some reason, throwing Disney Junior is supposed to fix everything? I love my TV and DVRs, but I'm really close to cutting the cord and trying to manage via Internet, Roku or Apple TV. 

  5. I've thought the same thing, but for some reason, throwing Disney Junior is supposed to fix everything? I love my TV and DVRs, but I'm really close to cutting the cord and trying to manage via Internet, Roku or Apple TV. 

  6. I've thought the same thing, but for some reason, throwing Disney Junior is supposed to fix everything? I love my TV and DVRs, but I'm really close to cutting the cord and trying to manage via Internet, Roku or Apple TV. 

  7. Joseph Finn6:08 PM

    Plus a bunch of Encore channels through the 31st, no matter what happens.

    Me, I'll be using this tomorrow just to negotiate with DirecTV on the phone, since a lot of people have reported getting reductions or freebies by talking to customer retention and noting that they wouldn't mind, you know, moving on if this isn't resolved.

  8. It'd be nice if they'd do a la carte pricing.  I could pay for the 10 or 12 channels I occassionally watch, and they could just stream the other 947 of them right back up their assholes.

  9. spacewoman8:45 PM

    Wait, is that why we watched the news last night?  I guess it was.  It's a lot less funny than TDS. 

  10. There have been studies, and it turns out this isn't what happens under a la carte.  Instead, prices go up a little or stay the same.  Why? Because EVERYONE has 10 or 12 channels they watch, but the investment that needs to be recovered is the same as it was before, so it just costs more for those channels.

  11. The second FCC Chairman during the Bush Administration hated the cable companies and wanted to impose a la carte pricing.  Economists in the FCC did some studies, and they concluded that prices would go up.  The Chairman tried to silence these economists and get them to bury their studies.  Said Chairman got caught with his fingers in the cookie jar on that one, and was called out in a Report issued by the then-Democratic House Energy & Commerce Committee for this, among other things.  See, e.g.,  .

  12. sea0tter129:00 AM

    I did this over the weekend. Got $10 off my bill for the next three months and got $5 off HBO for the next 6 months (which I was already paying for).

  13. isaac_spaceman10:47 AM

    Geez, Russ, Chicago has been saying that that's what would happen since about 1956.  Glad to see the rest of the academy is catching up. 

    There is an argument that even if prices don't go down, a la carte is more efficient and would lead to better quality.  It would reward stations that accurately gauge their demand-to-cost ratio and prevent low-demand/high-cost providers from siphoning funds away from high-demand providers.  More importantly, it would allow price segregation in a way that rewards not just breadth of viewership but depth as well.  I think fewer people watch AMC than E!, but I also think that people would be willing to pay a hell of a lot more for AMC than for E!.  A la carte allows AMC to price itself in a way that rewards it for the value of its content.  This already happens indirectly in license fee negotiations, but a la carte would allow it to happen directly, without the fuzziness of estimates and abstraction.  I'm all for something that increases the value of the license fee relative to advertising dollars, because advertising dollars favor lowest-common-denominator. 

  14. I think that your argument goes to voluntary, market-driven shifts in the pricing model, rather than to government-driven changes in rate structure during what is likely the best era that television programming has ever enjoyed.

  15. isaac_spaceman2:09 PM

    I don't know what flavor the government-driven shifts would take, but if it was just "each channel shall be priced separately and consumers shall have the right to pick and choose among them," then it doesn't matter whether it's government-driven or market-driven -- the result should be the same.  I don't think we'll ever get a market-driven shift to a la carte pricing because it doesn't seem to be in the parent companies' interest, or at least they don't perceive it to be.  And, incidentally, I don't know that the cost of trying to force the switch to a la carte would be worth the benefits.  I'm just saying that if you did have an a la carte model, there is a decent basis to argue that it would create a benefit even if costs didn't decrease. 

  16. I'd pay more for some of the things I enjoy if I knew I was not subsidizing new Housewives horrors on Bravo, crapulous Ghost Hunters programs on SciFi (gods, SciFi!  what HAPPENED??), or contributing a single fractional cent to the bottom line of the Fox News machine.  Less clutter, clear conscience, yes thank you Mister & Missus Economist I will pay that premium. 

    Let me be clear that I've also thought about the "but what about all the quality programming that couldn't get made without bundling effects because it's not popular enough to pay for itself?" argument, and, honestly, in the current media environment, I'm just not sure what that is anymore.  IFC, PBS, BBC and similar?  I'd pay for those and I bet others would too.  What's left?  Seriously, what?

  17. Yeah, I can see where this leads, and I don't want to get into a massive argument, but I'll just say that I'm not comfortable with a new type of government rate regulation in the absence of any demonstrable market failure, and in an era in which better television content is being produced than has ever been produced.  Clearly the content and distribution models are in major flux, and I suspect we're going to a pick-and-choose model akin to iTunes.  But the market got us there for music and I think it can get us there for television programming as well.

  18. Russ, you're closer to the market than most of us, at least in your professional capacity.  Please tell it to hurry.

  19. I'm trying, Ringo.  I'm trying real hard.   

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