New cord-cutting trend on the rise in America

blyons200

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That would go away if A la carte were to come to fruition. No one wants to pay that much for ads on a channel very few people have in their a la carte packages.


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That makes no sense? The same number of households get USA as get ESPN yet ESPN charges more that double for ad time. Ad buyers care about eyeballs, and ESPN gets the eyeballs of mostly men 18-55 with disposable income. That's why they get the ad revenue they get. Going ala carte wouldn't change that fact and the loss of viewers would barely register.
 

blyons200

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Anyway I think ala-carte would actually be a bad deal all around. People who hate sports bitch about subsidizing sports channels with their subscription. Well I hate reality shows, 24 hour partisan news/talk show channels and womens programming, but I am subsidizing that with my subscription. Truth is though if we went ala carte a lot of channels would go away, ones I like, ones you like, and ones women like. So I think I'll stick with the current model, maybe someday soon Meme will finally get that knitting channel.
 

memebag

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I'm all for a la carte, provided the prices reflect the cost. The channels I watch cost my cable provider much less than the channels I don't watch.

But I'm skeptical that it will happen any time soon. The current business model is still making a ton of dough for the people who get to make these decisions. They aren't ready for change.
 

IdRatherBeSkiing

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That would go away if A la carte were to come to fruition. No one wants to pay that much for ads on a channel very few people have in their a la carte packages.


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I agree not everybody loves sports. But sports fans are probably the biggest single chunk of subscribers. The packages right now include ESPN as a way to get you to take the home shopping network or the cooking with hazelnuts network. If a-la-carte comes about, most people won't dump ESPN but the other fringe networks. Yes there will be some which do dump ESPN but not in the numbers you seem to be quoting (without links I might add).
 

Jon

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That makes no sense? The same number of households get USA as get ESPN yet ESPN charges more that double for ad time. Ad buyers care about eyeballs, and ESPN gets the eyeballs of mostly men 18-55 with disposable income. That's why they get the ad revenue they get. Going ala carte wouldn't change that fact and the loss of viewers would barely register.
It makes total sense. The majority of the population doesn't watch ESPN, or listen to sports talk, or follow sports for that matter. ESPN's numbers would be slashed if a la carte were implemented. Even as a minor sports fan, I haven't watched ESPN outside of when the Broncos were playing in years. That's why cable and subscriber numbers are declining, because people are tired of paying for channels they do not watch. Same reason I quit it.
 

blyons200

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It makes total sense. The majority of the population doesn't watch ESPN, or listen to sports talk, or follow sports for that matter. ESPN's numbers would be slashed if a la carte were implemented. Even as a minor sports fan, I haven't watched ESPN outside of when the Broncos were playing in years. That's why cable and subscriber numbers are declining, because people are tired of paying for channels they do not watch. Same reason I quit it.
I disagree, I believe that majority of cable subscribers watch ESPN at least occasionally. I also believe the majority of Americans follow at least one sports team. My ex-wife and sister in-law could care less about football but if a KU basketball game is on you bet they are watching, and a lot of those games are on ESPN. Just because you don't watch ESPN doesn't mean a lot of people don't. And with the increasing availability and popularity of women's sports the audiences will really grow with more and more women interested in sports. Personally you and Meme are the only people I know that don't watch it.
 

blyons200

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I'm all for a la carte, provided the prices reflect the cost. The channels I watch cost my cable provider much less than the channels I don't watch.

But I'm skeptical that it will happen any time soon. The current business model is still making a ton of dough for the people who get to make these decisions. They aren't ready for change.
You don't think channels like the Science Channel and HGTV wouldn't just die out without that fee the cable company gives them? Would there be enough viewers to keep them in business?
 

Jon

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I disagree, I believe that majority of cable subscribers watch ESPN at least occasionally.
But watching ocassionally doesn't make them the most watched network. There are as many, if not more people who have ESPN in their basic package who never go near it. The average cable bill is close to $100, half of that goes for sports. People are starting to realize where their cable money is going, therein lies the reason for the decline in subscriber numbers for cable and satellite TV.

I also believe the majority of Americans follow at least one sports team.
I believe a majority don't have anything to do with sports, but that's semantics.

My ex-wife and sister in-law could care less about football but if a KU basketball game is on you bet they are watching, and a lot of those games are on ESPN.
But then, a lot aren't. CBS also has Kansas games. Not to mention regional sports networks.

Just because you don't watch ESPN doesn't mean a lot of people don't.
A lot of people do, but more watch other, non-sports networks and a lot don't watch sports at all.

And with the increasing availability and popularity of women's sports the audiences will really grow with more and more women interested in sports. Personally you and Meme are the only people I know that don't watch it.
Women don't even watch women's sports. If a women's game is on a network like ESPN that women don't watch in the first place, that's not going to make them want to see it. More and more households don't have a TV, and get their entertainment from sources like Netflix. If Netflix were a cable network it would be the biggest by a significant margin. Even the most popular cable network isn't going to compete with that. And ESPN isn't even the most popular.
 

Ehilbert1

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I wish I could get ESPN a la cart. That way the people that want it can have it and the people that don't are free. That would also mean I wouldn't have to subsidize some channels I don't watch. Lets face it some peoples favorite channels would die if that happened. I know ESPN would not be one of them.
 

blyons200

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Women don't even watch women's sports. If a women's game is on a network like ESPN that women don't watch in the first place, that's not going to make them want to see it. More and more households don't have a TV, and get their entertainment from sources like Netflix. If Netflix were a cable network it would be the biggest by a significant margin. Even the most popular cable network isn't going to compete with that. And ESPN isn't even the most popular.
ESPN is consistently #2 or #3, sometimes #1, not to mention that fact it competes with itself on 4 other channels. No matter how much it burns you up you know ESPN would survive just fine ala carte. What do you care anyway you don't have cable?

http://variety.com/2013/digital/news/netflix-surpasses-hbo-in-u-s-subscribers-1200406437/

That said, Netflix has a ways to go before catching up worldwide. HBO has 114 million subscribers across the globe, a far cry from the 7.14 million Netflix has outside the U.S. Netflix also added just over 1 million subs internationally in US., bringing its global total to over 36 million subs–more than 3 million than last quarter.

Nor does everyone agree that sports programming makes up half the cost of cable:

http://www.forbes.com/sites/mikeoza...ts-sports-fans-but-would-be-bad-for-everyone/
(Note: Several hours after this story was posted, an industry source told me sports programming told me, “The cost of all the programming for the average operator is approximately $33-$35, per month, per subscriber. Sports is a subset of that. The typical cable bill for expanded basic is around $75.” Thus the cost of sports programming could be significantly less than half of the typical cable bill.)
 
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Jon

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According to breakouts of calculations done by Derek Thompson over at The Atlantic today, that's the new reality of how all those mega-sports licensing deals weigh down your cable bill... by sport. Is your bank account ready for some football yet? Because none of these numbers even include regional sports network deals, which add up to another $32 per year, per person. For avid football fans or addicted fans of all the major sports, that's not such a bad price to pay. But for all the people who got cable just for one season of one sport, you're basically subsidizing football — and, per Thompson's theory, "a Golden Age of Television," as you can see in the chart below of how much each sport is costing you. (The total comes out to about $202 per year for all the major sports leagues.)

How Much You're Paying for Sports You Don't Watch, Per Sport - Rebecca Greenfield - The Atlantic Wire


You are paying for it regardless.

Although “sports” never shows up as a line item on a cable or satellite bill, American television subscribers pay, on average, about $100 a year for sports programming — no matter how many games they watch. A sizable portion goes to the National Football League, which dominates sports on television and which struck an extraordinary deal this week with the major networks — $27 billion over nine years — that most likely means the average cable bill will rise again soon.

http://www.nytimes.com/2011/12/16/b...teady-diet-of-sports.html?pagewanted=all&_r=0

The first snippet was from an article in 2013, quoting $202 in sports for the average cable bill. The second was from 2012 quoting $100, implying a $100 rise in one year for sports that not everyone watches. If you are a cable subscriber, and don't watch sports, you're getting ripped off.
 

blyons200

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Ya well there is about 75 channels I get that I don't watch so I'm getting ripped off. So even if the 202 figure is accurate, say at an average cable bill is 100 a month. So your cable bill is a total of 1200 a year. So that 202 is 16% of the bill. Doesn't sound like 50% to me, not even close. How much are those 75 channels of shit I don't watch costing me?

I love sports, I love my sports channels, and the cable companies cater TO ME. Americans love sports, and the cable companies are supplying what we want!

Like I said before, ala carte would be a bad deal for almost everyone, at least the way the current model works now. You said you are happy with Netflix, so I don't get why you bitch about a cable bill you don't receive.
 
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blyons200

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Cord-Cutters Lop Off Internet Service More Than TV - WSJ.com

Last year around 1% of U.S. households stopped paying for home Internet subscriptions and relied on wireless access instead, according to consumer surveys by Leichtman Research Group Inc. Just 0.4% of households in the last year canceled their pay-television subscriptions in favor of getting video entertainment over the Internet via services such as Hulu or Netflix

Home internet service cost is also rising fast:

Leichtman Research surveys show that spending for home Internet service has risen steadily over the years, to an average of $46.78 a month last year from $28.46 in 2005. People trading up to faster services—from dial-up to DSL to cable to fiber-optic—accounts for some of the increase, but so do rising prices.
 
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blyons200

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The programming alone isn't what makes cable expensive.

GPM is a simple equation: (Revenue – Cost of Goods Sold)/Revenue. It works well for calculating the profit margin on selling tangible goods like televisions and computers where the Cost of Goods Sold (COGS) is easy to calculate.

But GPM doesn’t properly evaluate the cost calculation for any business model dominated by high infrastructure costs, like broadband because the costs are not included.

The cable industry has invested nearly $200 billion in building networks since 1996, and it continues to invest more than $10 billion more each year in maintenance and upgrades. Yet cable’s COGS takes into account only the much lower day-to-day costs of running the network as opposed to building it. This produces GPMs that make cable companies’ profits look artificially high.


GPMs exaggerate broadband profits in a second, subtler way. Cable companies provide not only broadband but voice and video services as well–over the same networks. Many of their costs, such as network maintenance and customer service, can’t be broken down by service. These costs are thus considered operating costs for the entire business, and likely were left out of the equation when determining the gross profit of providing broadband services alone. This, again, overstates the margin of revenue over costs.

“Return on invested capital†(ROIC) paints a much more accurate picture of how the cable industry is performing. Unlike the gross profit numbers, ROIC actually attempts to incorporate long-term investment in infrastructure, giving a better sense of how a company is using its money to generate returns.

Using ROIC, we find that until very recently cable companies were earning small returns, still trying to recover their colossal initial investments. It often takes years of positive profits for these companies to make up for that initial investment and start seeing a return. So, what may appear to be a massive annual profit using GPM is really just recoupment of a tiny piece of past costs. Returns for cable companies range from negative to quite small.

Comcast, supposedly the greatest cable monopolist, has averaged just a 4.5% ROIC over the last five years. Time Warner Cable’s 5-year average is -1.3%. Compare those with Apple (32%) or Google (16.1%).


Read more: Does cable really have a 97% profit margin? | The Daily Caller
 

Jon

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Ya well there is about 75 channels I get that I don't watch so I'm getting ripped off. So even if the 202 figure is accurate, say at an average cable bill is 100 a month. So your cable bill is a total of 1200 a year. So that 202 is 16% of the bill. Doesn't sound like 50% to me, not even close. How much are those 75 channels of shit I don't watch costing me?

I love sports, I love my sports channels, and the cable companies cater TO ME. Americans love sports, and the cable companies are supplying what we want!

Like I said before, ala carte would be a bad deal for almost everyone, at least the way the current model works now. You said you are happy with Netflix, so I don't get why you bitch about a cable bill you don't receive.
Probably for the same reason you bitch about someone choosing not to subscribe to cable TV. I don't find it personally offensive if someone subscribes to cable, why do you find it offensive that I don't? Do you work for a cable company? I subscribe to broadband, but may dump that after a while and just go with mobile. AT&T Data plans are a little less than what Comcast charges, and what little content I watch would fit within the parameters of a reasonably priced data plan and I could watch anywhere and not have to be tied down by having to sit in front of the TV.


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blyons200

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I don't find offense about someone not subscribing to cable. Where have I said that? You should work on your reading comprehension. I don't give a damn one way or the other whether you subscribe to cable or not. Why do you try to convince us cord cutting is so great? IMO it would suck to be stuck with only Netflix, but that's just me. I pay out the nose for TV, good thing I enjoy it. I also get irritated when you whine and cry about how much sports programming costs cable subscribers, the people that want sports are paying for a ton of crap they don't want either. Again why do you care if you don't care to have a cable subscription? Plus work is slow today, I'm bored.
 
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Ehilbert1

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Probably for the same reason you bitch about someone choosing not to subscribe to cable TV. I don't find it personally offensive if someone subscribes to cable, why do you find it offensive that I don't? Do you work for a cable company? I subscribe to broadband, but may dump that after a while and just go with mobile. AT&T Data plans are a little less than what Comcast charges, and what little content I watch would fit within the parameters of a reasonably priced data plan and I could watch anywhere and not have to be tied down by having to sit in front of the TV.


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I get that but if I want to watch a movie or a TV show I would rather it be on my 60inch TV than my Xoom tablet. Now I do from time to time watch stuff on my phone. So does my wife. If I am home I want to watch it on my TV though.


I do want to say thanks for all the good info. Really thanks to both of you!
 

blyons200

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I get that but if I want to watch a movie or a TV show I would rather it be on my 60inch TV than my Xoom tablet. Now I do from time to time watch stuff on my phone. So does my wife. If I am home I want to watch it on my TV though.


I do want to say thanks for all the good info. Really thanks to both of you!
I watch stuff on my iPad all the time, mostly on planes or in hotel rooms, but at home I like to have it on my big HD TV with surround sound! I also like to stream a few things like iPad today and a couple other TWIT streams.
 

Jon

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I do that sometimes too, either through Airplay or the Apple TV box itself. I don't see where a 60 inch tv requires a cable TV subscription.