Monday, July 06, 2015

[Rant] Snapped Cable

There has been a lot of news recently about how all the cable channels are starting their own streaming services. Many folks are heralding this as the end of bundled cable. As in "Why am I paying for the Lifetime Network?" The theory behind this goes that it should cost less to just buy the channels you want. Well, in practice, I suspect it won't work out that way.

For example, HBO Go costs 14.99/month. That's a lot, but HBO is the ultimate. So let's say that the average station, a la carte, ends up at $10/month. If you want to subscribe to ten stations you're going to end up at $100/month plus whatever your internet service costs. Honestly, I don't see that being a lot cheaper than what you are paying Comcast/Time Warner/Charter/DirectTV. You might have a little more flexibility to swap stations seasonally depending on the terms of subscription, but it looks like a wash financially.

Put another way, If you are paying $100 for 300 cable tv channels, you are getting them for .33 cents a month. A la carte you will get fewer channels but at a greatly increased cost per channel. I suspect on average your monthly cost will be the same because cable has shown what the market will bear and a la carte subscription prices will increase to cover it.

Now, a la carte is a little more egalitarian in the sense that if you will pay relatively less if you really only have a two or three subscription channels versus the guy who really does regularly watch dozens. That seems somewhat fairer but I don't think that's a lot of people. But I suspect a lot of TV mavens who are lauding this development may find they end up paying even more.

The most egalitarian cost structure is on-demand -- pay only for what you watch show-by-show, episode-by-episode. We have that more or less already with Amazon/Netflix/Hulu although it is not comprehensive or timely. It may get there. I note that shows like Daredevil and Orange is the New Black (which I haven't watched) have taken to releasing entire seasons on demand at once. That's a much more interesting prospect to me.

But I have no complaints. I pay through the nose for Charter, but the service is actually pretty good, and my TV is on all the time -- I find it has replaced backround music in my life, perhaps not for the better. I also have Amazon Prime, but that is of broader value than just video. And I keep a Netflix sub, because it's just so cheap. All in all, I imagine I spend close to $200/month for entertainment and although I whinge about it occasionally, I suspect I get my money's worth. I don't see unbundled cable saving me all that much.