Yesterday, I made an analogy between buying buying cable channels a la carte and breaking off the stalks of portobello mushrooms (or broccoli for that matter) at the grocery store before weighing them. I was criticized in the comments and by email for what some viewed was a poor analogy. Let me defend myself.
For most people, paying for cable is like buying mushrooms. They eat the head (usually ESPN) and ignore the stalk (G4 Tech TV or Current TV, Al Gore's channel). Ideally, consumers would like to get just the channels they like, and pay less by discarding the less watched ones. Much like it's unfair to the grocery store to weigh the mushrooms after breaking off the stalk, it's unfair to the cable companies to pay for just the part of the package that you like. Here's why. While it's true that the cable companies do pay monthly fees to the stations, and those prices are based on channel popularity, this is not what dictates the final cost to the consumer.
Today, the consumer is paying for the massive investment the cable companies have made in rolling out broadband and digital cable, the cost of which gets depreciated annually. The actual number of channels served over these lines is basically irrelevant to costs. Thus while it seems that the consumer shouldn't have to pay for what he's not consuming, the presence of a few worthless channels in the lineup has a very minimal effect on costs, and thus on prices.
Al Gore has a channel?!
Posted by: c.a | December 01, 2005 at 09:39 AM
I believe (though I'm not positive) that it would difficult for the cable companies to do ala carte pricing. Right now they use filters to give you the "basic" or "premium" channels. If they offered 100 different channels they would also have to have an enormous number of filters to ensure that you could have channel 1-10 and 12, I could have 12-15, and someone else could have all 100. I know this is the way that non-digital cable worked, is digital the same?
Posted by: Kevin | December 01, 2005 at 12:03 PM
bad analogy. you can buy chopped mushrooms and broccoli crowns with no stalks. you pay a little more per pound, but you get choice parts you want and no waste. why can't cable TV do the same? Greed and local monopolies? Anyway, cable is so 1990's, video on demand via broadband will kill cableTV very soon. I only have two eyes, and online news (text and video) and entertainment (music and video). Thanks to Yahoo, iTunes, MTV and Comedy Central's motherload, screw cableTV:-)
Posted by: Nigel Elliott | December 02, 2005 at 04:47 PM