Hey Cable, What Happens When You Can’t Raise Prices Anymore?

Cordcutting nevercording and socalled overthetop video consumption decisions Netflix Hulu et al are seriously impacting the long running cablebundling model That model has two interrelated components which have rarely been considered togetheramp160 First of course is the evergrowing revolt over everincreasing network and broadcast carriage fees This comes courtesy of the programming conglomerates which kept adding new networks Originally a ploy by operators to avoid paying socalled retransmission fees the apple cart got upset when the laws changed leaving operators to pay for both amp8230 more and more every yearNow the Federal Confusion Commission FCC has further exacerbated the revolt as it has highlighted pricing of settop boxes STB as a serious issue High amp8220rentalamp8221 fees for STBs and more persub fees for programming very few watch has pushed video entertainment bills past the torture thresholdSo like Ed Martinamp8217s friends and family my friends up the hill are cutting that cord with PlayStation replacing DirecTV Plenty of sports no broadcast channels Add that to Consumer Reportsamp8217 cable vendetta and too many blogs to count and the anecdotal evidence keeps growingBut is it real Could the FCCamp8217s STB folly help push that over the edge Could the proliferation of socalled minibundles a la XfinityStream DISHSling or Time Warner Cableamp8217s broadband ShowtimeHBO halt the rising cost of the socalled cable bundle Well the subscriber erosion is real Video consumption patterns are clearly changingStill it could take quite a long while to have a serious lasting impact STBs are not going away tomorrowamp160 After all it is pretty hard to run trucks and change out some 981 million subscribers That counts all three distribution forms cable has 53 million amp8211 and doesnamp8217t assume any contractor keeps his appointmentStill yes as Brian Barrett headlined in Wired amp8220Cable Boxes Suckamp8221amp160 So do the satellite and telco boxesamp160 But change takes time and Barrettamp8217s complaint about Comcast refusing to automatically authorize a TV everywhere product from Starz thus bypassing Comcastamp8217s regular Starz carriage contracts by creating a direct app is pretty sillyamp160 Itamp8217s the nature of toll roads folks for example proprietary spectrum use and it takes a lot more than indignant declarations to change themBut letamp8217s step back a little What could fix the high cost amp8220problemamp8221amp160 A Federal rule to force a la carte pricingamp160 That is you pay only for what you watchamp160 Well Canadaamp8217s version of the FCC is more or less sort of trying that this yearamp160 Wait and see what happens up NorthMeanwhile the anecdotal pressure is sure to continueamp160amp160amp160amp160amp160amp160amp160amp160amp160Random NotesIt ainamp8217t just cable that provides STBsamp160 And it ainamp8217t just cable that has complicated contracts with programmers That should be amp8220cablesatellitetelcoamp8221 Cable gets enough bad press often deserved just not this timeMeanwhile the FCC has its hands full with opposition to its STB proposalsamp160 Earlier this week the FTC a large number of programmers more associations and a number of Congressfolk have weighed in against the proposals Besides they make no real senseamp160 But lots and lots of folks from Google have been visiting the White House amp8230 some 427 since Obama has inhabited the placeThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillageMyersBizNet management or associated bloggers

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Hey Cable, What Happens When You Can’t Raise Prices Anymore?

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Paul S. Maxwell

"About That with Carl Mayer:" Alaina Donnellon (Episode 6) - By Carl Mayer

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Hey Cable, What Happens When You Can’t Raise Prices Anymore?

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