Why Television Pricing Is Broken

[deirdre]

There’s a fascinating article on Medium about why Cable TV bills are escalating out of bounds. I’d noticed this a couple of years ago when I looked, horrified, at our cable bill and we cut the wire. In 2011, we replaced cable TV with a dual antenna set that ran $400 and has served us well for the staggering amortized cost of $15 a month (and falling).

When the region changed managers, I got a call from Comcast asking why we wouldn’t come back.

It wasn’t the service issues, though those sure didn’t help. It was the realization that most of the money I was paying was going to things I had not only no interest in, but I felt were things I wouldn’t choose to spend my money on. Worse, what I’d rather spend my money on was getting almost no funding at all.

So, I said, “Until you have the Fuck Sports Channels and Fox News Plan, we’re done.” And I meant it. I’d far rather fund a real educational channel. Another Farsi channel. Something else.

Inevitably, non-sports fans will realize that they are getting totally ripped off. My favorite explanation came from a post by sports blogger Patrick Hruby: “ESPN’s business model is getting 60 percent of the country that doesn’t watch ESPN to pay 60 bucks a year to pay for ESPN.”

I don’t really want to go on a tear about funding for sports, how athletes are given passes in ways they shouldn’t be (especially true when sexual assault is part of the problem), nor about how Title IX and sports isn’t really anything liked I’d hoped it would be. It’s not that I dislike sports. I do make a point of going to sporting events. I just have little use for sports television apart from the Olympics. (And if you do, that’s fine.)

The problem, as is outlined in the Medium article, is packaging.

I can’t help but feel that we’re caught up in a variant of Max Barry’s Jennifer Government, where everyone is in competing marketing alliances and the cable companies need to suck up to all of them — to our detriment.

Here’s the bigger tragedy, in my opinion. Used to be that the networks were the studios that made the shows. An ABC show was actually made by ABC. This is no longer true. You’ve no doubt noticed the production company credits (e.g., Bad Robot) after the show if you sit through the credits.

Let’s say you’re a rebel like me and you cancel cable. And AMC has a show you really like — Breaking Bad or The Walking Dead.

Let’s say you can watch it on Hulu. Does that count toward the show’s viewership? Yes, because it has ads. Remember, the network is fundamentally all about selling ads.

Let’s say you buy it on iTunes. Surely that’s good, right? No. Because that money goes to the production company, not the network, it counts as zero viewers when considering a show for renewal. So, even though the production company gets a bigger slice of the pie and you are directly supporting what you love, it doesn’t count when the network decides to renew the show. (I suppose it’s possible that such sales affect the price to the network if the revenue’s significant enough.)

Same with buying DVDs — money goes to the production company, not the network.

Thus, not only is the pricing model broken, there’s incentives for it to stay broken, and it’s not likely to get fixed any time soon.

Until the bundled pricing model breaks (which is starting to happen), our hopes lie in iTunes, Hulu, Netflix, Amazon, et al.

Graphic is from this article about highest paid public employee in every state.

Originally published at deirdre.net. You can comment here or there.