An Essay On Subscription Television

dpu writes "Who would pay $1.99 to download a television episode that only costs about $0.0014 to see on cable? This is a short essay on the current and past state of subscription television, and a hope for the future. It skips a lot of points that the thinkers among us might care about, but it does the math and drives a nail into Big Content's pinky toe."

when did we start paying for advertising?

[Anonymous Coward]

I remember a time when having 'cable' meant that we didn't have to watch commercials. It seems difficult to avoid them these days.

Math?

[guffe]

The current revenue of a company like Comcast comes mainly from the money paid by subscribers, that is true. However, only a fraction of that money goes to the TV networks, most of it goes to pay for infrastructure and such. The reason that the TV networks get none of the money is, quite simply, because they get their finance from commercials. Another model for delivery, like the one suggested in the article, would give no reasons for networks to give the low/nonexistent prices that they currently do to Comcast. Although I do believe that the subscription television probably is something that we might see in the future, I hardly think the article is slashdot-worthy. Slow news-day anyone?

missing options

[cl191]

"Who would pay $1.99 to download a television episode that only costs about $0.0014 to see on cable?" Who would pay $0.0014 to see it on cable while you can download it on your favorite torrent site for free?

Me!

[babbling]

I'm happy to pay a dollar or two if I can download an episode of 24 straight after it airs. The only reason I don't do this at the moment is because Apple (Apple fanboys: note that Apple has refused to sell songs without DRM when requested by the artist - Apple loves DRM) and Fox have decided that they will only sell me encrypted media.

I think there's a huge market for "put your CC details into this website and we'll give you an unencrypted file download link". The iTunes Store was around by the time AllofMP3 started getting popular, but enough people use AllofMP3 for it to bother the RIAA significantly. Why don't these people just use iTunes? Because AllofMP3 give their customers exactly what they want.

Re:Three reasons

[Osty]

So, why not make the pilot or the first episode of the season free to hook people on shows.

Why stop there? Why not provide the latest episode online for free in case you missed it or prioritized something else (or two something elses if you have a dual-tuner PVR, or three something elses if you recorded two shows and watched a third already-recorded show)? That's what NBC does with Heroes [nbc.com]. But why not go even further? NBC provides all episodes of the current season of Friday Night Lights [nbc.com] online for free. CBS has done the same thing with Jericho [cbs.com]. There are probably other such shows out there provided online for free by the parent company that I just haven't stumbled across (I watch and enjoy Heroes and Jericho, and though I haven't watched it yet I ran across Friday Night Lights by accident).

Yes, these videos are streaming-online-only. Yes, it sucks to have to watch them in a browser rather than on your big screen TV. However this does bring up an interesting question -- if time-shifting is legal, as the courts have held up, and if time-shifting could imply a necessary format-shifting (from broadcast format to tape or disk, for example), might not this new behavior by CBS and NBC actually allow you to time-shift and format-shift not by watching the videos online but by downloading them in a more big screen-friendly format (say, DivX, playable on any HTPC) from a bittorrent tracker somewhere? Seems like a gray area to me. Obviously it would only apply to shows where the full episodes are available for free from the parent company, so shows like Battlestar Galactica or 24 are out. But for the shows I mentioned and others like them, it's definitely an interesting question, unfortunately probably only answerable by a court somewhere.

It does make you wonder how CBS can justify selling Jericho on Xbox Live Video Marketplace for $2/episode when they provide the exact same content online free of charge. Just food for thought ...

Re:when did we start paying for advertising?

[Konster]

We don't pay for content. The advertisers do.

How do you propose to pay for content when you block out advertiser's ads? I am perfectly happy with Colgate (for example) dropping the cash needed to float and air a program that I enjoy, even if that means that 8 minutes out of every half hour I have to look at dumb ads. Most of the time these ads are ignored, sometimes they make me aware of the product so that I buy it. Advertisers aren't the scum of the Earth. Look to corporate interests to fill that role; adfolk are just trying to scrape together a buck like you and I.

Ads aren't evil, and placed well are very helpful.

Re:Three reasons

[Znork]

"Of course, if you watched TV 24/7 you could only watch 720 hours worth, assuming, of course, you never slept, went to the bathroom, etc.."

I have yet to see my MythTV infrastructure sleep, go to the bathroom, etc. And, in fact, it has no trouble 'watching' half a dozen channels at the same time. Or more, should I want it to.

Get into the digital age. There is no longer any real difference between broadcast, streamed or stored material. It's all just various incarnations of transmission bandwidth, multiplexing, caching and storage.

Cable can be viewed as simply a linearly transmitted archive.

So the original article is entirely reasonable in counting all available programming; what he's getting is access to that number of terabytes of archive data. Wether he views any particular amount of it or not, he's perfectly able to store, and later view, it all.

Changing the business model of television

[Carniphage]

Whether you agree that $1.99 or $2.99 per show is a good deal, directly paying for shows allows something amazing to happen. * It allows audiences to pass money DIRECTLY to television creators. * And that model is more honest and fairer than the advertising model which currently dominates broadcasting. It is a way better model, and better TV would be the outcome. It has the power to transform the type of shows being made because it makes television-makers directly accountable to their audience. Program makers would not have to pander to the needs of the network or the advertisers, but would put the audience first. Shows which have a small enthusiastic audience would not be dropped. Reality shows would have to stick in advertising land, because no-one would pay for that crap. Of course the networks and advertisers are fearful of being cut-out of the market. So while they still have power, they'll attempt to drive the prices of download TV ever higher. This is going to get interesting. C

Re:Three reasons

[DrSkwid]

Learn some economics.

Prices are set such that people are prepared to pay, not that "cost of business + 30%".

It's called the elasticity of demand.

Keep racking up your prices and you'll lose customers.
Keep dropping your prices and you'll lose money.

There's a sweet spot between the two that maximises your price.

These people have decided that $1.99 is their sweet spot.

A competitor might decided to try $1.75 and consequently move the market.

Uh huh

[Rob Simpson]

Pickpockets, spammers, and con artists are "just trying to scrape together a buck" too.

In any case... I can watch my boxset of Firefly DVDs without seeing any ads, and there are several episodes in it which were never aired. I own several other series on DVD as well.
Fun fact: the most expensive DVD boxset I own costs less than (the hours of time I would have lost watching ads) * (my hourly wage).

Just Say "No."

[CheeseburgerBrown]

Whenever these topics come up many of us seem to agree that TV sucks, yet somehow the issue remains worthy of debate. Why hand over more money for rights-handicapped mediocrity? Do we for some reason feel we require television in order to fit into our culture?

Personally, I'm saying "to hell with it!" I just stripped my cable package down to nothing but Internet, and I can't imagine regretting it. While it's true that I may not be hip to the latest watercooler joke, but I bet I'll survive the trauma.

TV needs me more than I need TV. Let them sweeten the deal before I come back.

Re:when did we start paying for advertising?

[proxy318]

I don't know about the theaters you go to, but the ones I do sure as hell show advertisments. Before the move starts, there's a half hour straight of still ads with sound on the screen. Then once the movie "starts", you're treated to ten minutes of video ads, followed by seven or eight movie trailers (ads for new movies). If you're paying to see the movie, and you're potentially paying for the obscenely priced snacks (where the theater makes its money), then you sure as hell shouldn't have to watch any ads. The trailers at least can be interesting, but you shouldn't have to watch commercials for Coke or the MPAA's anti-piracy propaganda.

Re:when did we start paying for advertising?

[FrankieBaby1986]

Why does basic cable have to have 40 channels? I don't watch more than half the stuff. If I could choose say 5 commercial-free, custom-made channels (with the new "on demand" streaming tech), I would gladly pay 50-60 a month for it. Allow me to choose show types by genre, subject, actors, title, etc. Make it without commercials, or with only commercials between shows (like TV used to be) and I'm sold.

al a carte subs

[man_ls]

Cable providers have sophisticated enough two-way networks that it shouldn't be that difficult to charge exactly how much people want, to the tune of $2/month per channel, if you don't want that many.

The channels I would watch on cable or satellite are ones that are only available on the higher tiers of programming. But, in order to get them, it means I'm saddled with a dozen "family" and "kids" channels, two dozen "news" channels, numerous channels akin to "lifetime" and mtv, mtv2, mtx, vh1 and its sisters, etc. As well as literally between 4-5 Spanish stations I am not interested in on cable, all the way up over a dozen on satellite. This means that in order to watch IFC and Fuse (i do occasionally watch Fox and USA also) I'm using about 1% of what I'd be receiving, and paying full price for it. Effectively, those channels are costing me $25/month each.

One satellite subscription service (selling 4DTV subscriptions over C-Band) does offer al a carte programming but they have less than 100k subscribers nationwide and many of the networks aren't renewing contracts with them, because it isn't worth their time. They charge a very small fee monthly. But, you need a 10 foot dish...

I understand programming bundles exist to subsidize the foreign-language channels and special-interest channels that nobody would ever pay for in their own time, but that's why I'm not a subscriber. I get enough channels (even in HD) with a good rabbit-ears antenna and that's how it is going to stay.