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Cable industry defends packaging

Submitted by: twnpnews on Monday March 29th, 2004 at 07:59 PM EST

In the dream world of some television viewers, they would pay their cable or satellite companies only for the channels they want. Some might not pay for MTV, because they don't want their 8-year-olds watching it. Others would turn down ESPN Classic, because they've already seen the 1975 World Series. Others would eschew TeleFutura, because they don't speak Spanish.

Reality is far different.

No U.S. cable or satellite company offers what are called "a la carte" plans. To get the Discovery Channel from Comcast Corp. cable company, for instance, Washington viewers have to pay for an "expanded basic" package that includes MTV, FX, MSNBC and 33 other channels.

That may change, if some lawmakers and consumer groups get their way, as the cable industry finds itself under increasing scrutiny. Lawmakers report that their constituents are angry about cable bills that have risen at three times the rate of inflation since the industry was largely deregulated in 1996.

One possible solution being proposed is a la carte cable, a way to give consumers more choice over what they watch and how much they pay for it. But it's not an answer the cable industry will swallow easily, if a Senate Commerce Committee hearing last week on cable rates is any indication.

Committee Chairman John McCain, R-Ariz., peppered Cox Communications Inc. President James Robbins, asking the head of the nation's fourth-largest cable company why consumers have to pay for channels they don't want. Robbins' answer: Giving consumers that degree of choice would cost too much.

Besides adding to the cost, cable companies say, selling channels individually might make it difficult for lesser-watched, niche channels to survive.

Under an a la carte system, top-rated cable channels such as USA Network would probably thrive because ratings suggest enough people would choose to buy it individually to make it worth a programmer's while. However, less-watched channels that serve distinct but smaller audiences, such as TechTV and BET, may not survive, because not enough viewers would pay for them. Under the current system, consumers effectively subsidize less-popular channels, which cable companies say provides diversity in the cable and satellite universe.

» Read full story @ Duluth News Tribune
11 Comment(s) [Create new Comment | Email Story]
#1 By TWNPNews (twnpnews) on Mar 29th, 2004 20:12
Cable companies are evil, they raised rates here 2 times so far this year
#1.1 By deven (deven) on Mar 29th, 2004 20:15
Mm-hmm, you said it my friend.
#2 By TWNPNews (twnpnews) on Mar 29th, 2004 20:16
YAY someone agrees with me, unlike Kirk
#2.1 By Kirkland (kirkland) on Mar 29th, 2004 20:18
I live to disagree and play Devil's Advocate.
#3 By TWNPNews (twnpnews) on Mar 29th, 2004 20:20
You truly are a devil.

Anyway, whats your take on this?
#3.1 By Kirkland (kirkland) on Mar 29th, 2004 20:25
It's a good idea, but what if it ends up costing more that way? Or if certain channels charge more, and what about channels nobody watches, they will start to complain.

The article mentions TechTV and BET as less-watched O_O, I know that a lot of people (including me) can't even get TechTV so if they had the option I'm sure it would grow.
#3.1.1 By deven (deven) on Mar 29th, 2004 20:27
I couldn't live without those two channels! What are those freaks talking about!
#3.1.2 By TWNPNews (twnpnews) on Mar 29th, 2004 20:41
Well, they could still have package programs for those who use more channels.
#3.1.3 By TWNPNews (twnpnews) on Mar 29th, 2004 20:41
You cant live without BET? I can live without it
#3.1.4 By deven (deven) on Mar 29th, 2004 21:20
BET delivers my lifestyle while TechTV fulfills my interests.
#4 By Unicycle (unicycle1977) on Mar 30th, 2004 16:50
Perhaps if they didn't charge so much in the first place, it would not even be an issue. I don't seriously think that people are AS concerned about only having the channels they want as they are about the price. Perhaps they could make up the lost income from lower rates with all the new customers they would attract.
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