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Businesses Television

An Essay On Subscription Television 306

Posted by kdawson from the wishes-and-horses dept.
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."
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An Essay On Subscription Television More

An Essay On Subscription Television

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  • when did we start paying for advertising? (Score:4, Interesting)

    by Anonymous Coward on Sunday January 28, 2007 @05:56AM (#17788648)
    I remember a time when having 'cable' meant that we didn't have to watch commercials. It seems difficult to avoid them these days.

    • Re: (Score:3, Insightful)

      by Workaphobia ( 931620 )
      It's funny how on the one hand we hate targeted advertising because it's an invasion of privacy and you can't trust the security of the data that a company keeps about you; and on the other hand, we hate untargeted advertising just as much for spamming us with irrelevant and annoying messages. I wonder if it'd ever be possible to register our data and preferences with some sort of trustworthy neutral party, and have advertising routed through them so that the business models that depend on it can still surv

      • Re:when did we start paying for advertising? (Score:5, Insightful)

        by AuMatar ( 183847 ) on Sunday January 28, 2007 @06:14AM (#17788702)
        How about- just not get *any* advertising.

        • Re: (Score:2)

          by Duds ( 100634 ) *
          Your cheque for $3000 a month for basic cable will be due on the 30th.
          • With all the advertisement on basic cable, why should we have to pay anything for it? It's the reason I don't have cable. That, plus the fact I don't watch much TV. If I want to see an old episode of Deadwood or a new episode of The Wire, I fire up bittorrent. I really don't care if the big media companies crash and burn.

            That being said, if it didn't have any DRM, I'd definitely be willing to pay a few bucks for an episode of Deadwood or The Wire if it meant convenience, high quality and fast service.

          • Re: (Score:3, Interesting)

            by FrankieBaby1986 ( 1035596 )
            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.
      • It's funny how on the one hand we hate targeted advertising because it's an invasion of privacy and you can't trust the security of the data that a company keeps about you; and on the other hand, we hate untargeted advertising just as much for spamming us with irrelevant and annoying messages.

        I don't think this is hypocrisy; I think it's just a dislike of advertising.

      • Re: (Score:2)

        by sco08y ( 615665 )
        I wonder if it'd ever be possible to register our data and preferences with some sort of trustworthy neutral party, and have advertising routed through them so that the business models that depend on it can still survive while we're not bored to pieces or abused by marketting companies.

        No, it will never be possible. There will always be advertisers who are determined to exploit and wreck any system based on fair play.

    • Re:when did we start paying for advertising? (Score:5, Insightful)

      by Znork ( 31774 ) on Sunday January 28, 2007 @07:38AM (#17788956)
      "when did we start paying for advertising?"

      Ironically, you've always paid for advertising. So now you're both paying for the advertising (if you buy the product), and then you get to pay to watch the advertising (on TV).

      So basically you're paying to watch something you dont want to watch, which you yourself paid to get produced, just so you can watch something else you didnt pay to get produced (well, except you did pay to get it produced when you paid for the advertising by buying the advertised product...).

      Somehow I suspect that this may not be the most optimal method of funding the things you do want to watch... (which might be a tangent to the articles point...)
      • So basically you're paying to watch something you dont want to watch, which you yourself paid to get produced, just so you can watch something else you didnt pay to get produced (well, except you did pay to get it produced when you paid for the advertising by buying the advertised product...).

        Unless, of course, you participate in a more optimal funding approach [npr.org] typically known for generating better results. Human nature being what it is, participation tends to be low.

        On the other hand, I wonder sometimes w

    • Re: (Score:2)

      by Zadaz ( 950521 )
      Ever buy a newspaper or a magazine? Or clothes with a logo on it?

  • Well, when you put it that way... (Score:4, Insightful)

    by vought ( 160908 ) on Sunday January 28, 2007 @05:56AM (#17788652)
    Who would pay $1.99 to download a television episode that only costs about $0.0014 to see on cable?

    Why pay $14.99 for a novel when you can walk out of the library with it for free?

    Content creators need to be assured of recompense for their work. Until someone comes up with a better way of assuring payment for digitally-reproduced work, the system we have is...all we have.

    • Re:Well, when you put it that way... (Score:5, Insightful)

      by paeanblack ( 191171 ) on Sunday January 28, 2007 @06:16AM (#17788712)
      "Who would pay $1.99 to download a television episode that only costs about $0.0014 to see on cable?

      If someone were to watch TV for 18 hrs/day, 7 days/week, that's ~540 hours/month. Skipping commercials, that's about 800 hrs/month of programming, or 1600 episodes. At $0.0014 per episode, this guy must be paying only $1.12 per month for cable. He would be nuts to pay $1.99 for a single show.

      Meanwhile, in the real world, someone who is paying $60/month for cable and watching TV for 40hrs/month, might find $1.99 for a show quite reasonable.

      • Re: (Score:2, Funny)

        by Stu22 ( 793796 )
        Thats $1.12 per picture. 20 TVs all running picture in picture can easily get the price up to $44.80.

      • Re: (Score:2)

        by pvera ( 250260 )
        Exactly. The most extreme would be paying for premium digital cable, around $90 in my case, then having a crappy month where I was so busy that the only thing I watched on cable was the first 6 episodes of 24. That's $15 per hour!

        A real life example for me, assuming 4 fresh shows, not reruns:

        1. 24
        2. CSI Miami
        3. CSI NY
        4. CSI Vegas
        5. House MD
        6. Bones
        7. Ugly Betty
        8. Grey's Anatomy
        9. Scrubs (1/2 hour)
        10. Medium
        11. Dirt
        12. Ghost Whisperer
        13. Numb3rs
        14. Las Vegas
        15. Boston Legal
        16. 20th Century Battlefields (I th
      • ... its a freaking sweet deal. I pay for the stuff I want to watch (Heroes, 24), and everybody else gets to pay for "We Put Twenty Attention-Starved Coeds On an Island and Drama Happened".
      • While I think $1.99 is a bit too high a price, I'm happy to pay that for each episode of Battlestar Galactica and Monk that I download from the iTunes Store. (Which means it isn't really "too high", I suppose.) At it's very worst (a month with new episodes of both series every week), it would cost me $19.90, which is cheaper than it would cost me to subscribe to a cable or satellite service that includes both programs. Over the course of a year, it costs me an average of only $7.30 a month. And if I get

        • Re: (Score:2)

          by Rich0 ( 548339 )
          Only problem is that the download services are all DRM'ed to death and incompatible with mythtv. All I need is an MPEG-2/4 file and I'll be happy (especially if it has AC3 audio). I'm more than willing to pay - it could be a lot cheaper than satellite. Plus, the bitrates would probably be higher and I wouldn't have as many glitches in the program streams as when I record it myself.

          The studios are nuts - people can bittorrent any show they want right now and get video without DRM. So, if they just offere

          • Re: (Score:3, Insightful)

            by tverbeek ( 457094 ) *

            Only problem is that the download services are all DRM'ed to death and incompatible with mythtv.

            So what? None of that provides any real obstacle to watching the show (which is the point of television, I thought). Yeah, DRM systems are bad, and it'd be swell if everything worked seamlessly with everyone's favorite playback system. Wouldn't it be neat if first-run movies played on my home TV, and there were no commercials on anything, and I could call up epsidoes of All in the Family to watch at will? I'

    • Content creators need to be assured of recompense for their work. Until someone comes up with a better way of assuring payment for digitally-reproduced work, the system we have is...all we have.

      I have to disagree. The only time content creators need to be assured of compensation is if they are required to or contractually obliged to produce that content. Otherwise, the content-production is an activity with some associated risk.

      This highlights what I think is a common fallacy that seems to be along the l

  • Three reasons (Score:5, Insightful)

    by repvik ( 96666 ) on Sunday January 28, 2007 @06:04AM (#17788678)
    I haven't RTFA, but I could give three reasons.

    1. You're paying not to see commercials
    2. You're paying for the convenience of seeing whenever you want
    3. You're paying for the infrastructure needed

    The prices are high as they are with any "new tech". As I see it, this is still an "early adopter" price.

    I also question the maths involved here. Is he watching cable 24/7 to get those prices?

    • Re:Three reasons (Score:5, Insightful)

      by shmlco ( 594907 ) on Sunday January 28, 2007 @06:17AM (#17788716) Homepage
      No, he's counting on the fact that "thousands" of programs a month are potentially "available". 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..

      Apparently he can't do the math either.

      Fundamentally, it's yet another "I want it my way at my price" rant, and since the "content providers" don't see it his way, becomes a rationalization for piracy.

      • Re:Three reasons (Score:4, Interesting)

        by Znork ( 31774 ) on Sunday January 28, 2007 @07:20AM (#17788908)
        "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.

        • Re:Three reasons (Score:4, Insightful)

          by Carrot007 ( 37198 ) on Sunday January 28, 2007 @09:16AM (#17789260)
          > I have yet to see my MythTV infrastructure sleep, go to the bathroom, etc.

          You still have to watch the content you have recorded, and you still have a limited ammount of time to do that.

          Sorry to break it to you but you are never going to watch tv 24/7 even with added help, it just aint possible.

          • Re: (Score:2)

            by Rich0 ( 548339 )
            Looking at my myth box I have about 25-30 shows programmed to record regularly. Now, granted we don't watch every single episode of every one of those, but most are probably watched every week. Factor in that this is a family of 4.

            Assuming that on average a new episode is available for 20 of those shows in a typical week, that is $40 per week. My satellite bill is about $40/month for two tuners. $2/show is just way too much.

            The math changes quite a bit when you put multiple people in the same household.

            • Re:Three reasons (Score:4, Insightful)

              by derF024 ( 36585 ) * on Sunday January 28, 2007 @12:20PM (#17790192) Homepage Journal
              Assuming that on average a new episode is available for 20 of those shows in a typical week, that is $40 per week. My satellite bill is about $40/month for two tuners. $2/show is just way too much.

              The math changes again when you take into account the following:

              1) A full season of a TV show is $35 on iTunes, not $2/episode.
              2) With satellite, you're paying for the 6 months of the year when the networks are only playing re-runs.

              Assume your family watches 20 different shows over the course of the year.
              iTunes: 20*35 = $700/year
              Satellite: 40*12 = $480/year

              iTunes is still more expensive, but not "way more expensive." Plus, you don't have to skip around commercials or leave a computer on 24/7.

            • Re:Three reasons (Score:4, Insightful)

              by shmlco ( 594907 ) on Sunday January 28, 2007 @01:34PM (#17790560) Homepage
              "$2/show is just way too much."

              Apple's sold 500 million of them at that price, so apparently a few people don't share your viewpoint.

              And as long as you doing the math with myth you probably should deduct the price of a dedicated PC with tuner cards. With Tivo you should factor in the $15/month service and initial purchase. Heck, even with Comcast's HD DVR box you're adding $9.95 a month.

              There's also the fact that a lot of older content on iTMS, that's not currently on TV and available to be recorded. Example, about a month ago I bought the "shimmer" episode of SNL, along with the pilot episode of Land of the Giants. No particluar reason, just nostalgia. If those hadn't been available at $2 each I'd never have gotten them, since I wans't going to pay $40-50 for the set of DVD's. I was interested, but just not THAT interested.

              Although, looking at the top seller's on iTMS, it seems that most are popular programming, like Galactica or The Office, which leads me to believe that they don't have myth or a DVR, and probable that many are simply picking up "missed" shows.

    • Re:Three reasons (Score:5, Insightful)

      by drsquare ( 530038 ) on Sunday January 28, 2007 @06:19AM (#17788720)
      Well let's assume you have a four-person household, and each person watches an average of 30 hours a week of TV. That's 6240 hours a year. If your cable bill is $720 a year, then that's about 11c per hour, or 6c for a half-hour show. It's effectively a 1700% markup.

      Skipping commercials or viewing whenever you want can be done with a Tivo.

      The main problem with pay per view is that you have to be dead sure you want to watch something before you watch it. You can't channel surf, you can't browse, you can't tune into the middle of a show to see if it's any good. You're pretty much restricted to watching shows you really like.

      • Re: (Score:2)

        by repvik ( 96666 )

        Well let's assume you have a four-person household, and each person watches an average of 30 hours a week of TV. That's 6240 hours a year. If your cable bill is $720 a year, then that's about 11c per hour, or 6c for a half-hour show. It's effectively a 1700% markup.

        He doesn't say anything about a family. He says, and I quote:

        So here's what I would like to see happen. Currently, I watch about four different television shows on a regular basis - Lost, Battlestar Galactica, Heroes, and typically a current rea

      • Well let's assume you have a four-person household, and each person watches an average of 30 hours a week of TV. That's 6240 hours a year. If your cable bill is $720 a year, then that's about 11c per hour, or 6c for a half-hour show. It's effectively a 1700% markup.

        An average of $0.06/per episode does not mean all shows are worth $0.06. The viewer could consider his few favorites worth $2 and all the rest to be worth $0.04. Claiming "It's effectively a 1700% markup." is meaningless, because people are onl

      • Re: (Score:2)

        by Xugumad ( 39311 )
        > Skipping commercials or viewing whenever you want can be done with a Tivo.

        Only works if most people don't, however. Cable TV is subsidised by advertising providers. If no-one's watching the adverts, they're going to stop subsidising TV programs.

        Personally, I don't think $1.99 is too much to ask for episodes. Having said that, shows I tend to be interested in (Heroes, Battlestar Galactica...) tend to be special effects heavy, and therefore are going to be more expensive to make, and I can see how $1.99

      • Re: (Score:2)

        by Tim C ( 15259 )
        It's effectively a 1700% markup.

        Mark-up [cambridge.org] is defined as the cost added to something before it is sold on. Unless those shows are costing the cable company "about $0.0014" per viewer to show, then the mark-up is unlikely to be 1700%.

    • Re: (Score:3, Interesting)

      by DrSkwid ( 118965 )
      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.

      • Re: (Score:2)

        by repvik ( 96666 )
        If you think you're disagreeing with me, you're wrong ;-)

        People are prepared to pay that much for this product (Well, obviously except this math-challenged OP). *I* am willing to pay that much, for the reasons I stated in my original post. You're paying for a service that comes at a price they've figured you'd accept. No argument there.

        Regarding the economics of it, there's a bunch of factors that come into play. Obviously, economics of scale, diffusion of innovation, and as you say, market elasticity. I be
    • I'll pay for convenience, but there is no way I will pay extra for infrastructure or lack of commercials. The infrastructure is a cost for the distributor, not added value for me. The lack of commercials is the default state. I would expect content to be cheaper or free if financed by commercials.

      There are two ways to get me to prefer legal downloads to illegal:

      a) A subscription service that starts downloading an episode when it's available, so I can watch it whenever I get home / have the time, as oppose

      • Re: (Score:2)

        by repvik ( 96666 )

        I'll pay for convenience, but there is no way I will pay extra for infrastructure or lack of commercials. The infrastructure is a cost for the distributor, not added value for me. The lack of commercials is the default state. I would expect content to be cheaper or free if financed by commercials.

        Ok, who do you propose pays for the infrastructure and maintenance?
        Paying a premium not to get the commercials is fine by me. Getting it cheaper, subsidised by commercials is probably fine by others. No matter how

        • Ok, who do you propose pays for the infrastructure and maintenance?

          My point here is that the costs for the manufacturer and distributor don't factor into what I'm willing to pay for something. There are products that are not manufactured at all bacause the costs would be too high compared to what the end user is willing to pay. If the convenience of having a coat to keep me warm in winter is worth $100, I won't pay $200 for it to cover the costs of transportation etc. A product is profitable if the value

          • Re: (Score:2)

            by repvik ( 96666 )

            My point here is that the costs for the manufacturer and distributor don't factor into what I'm willing to pay for something.

            Ok, so the manufacturer and distributor shouldn't get paid. They won't "sell" to you at a loss either.

            There are products that are not manufactured at all bacause the costs would be too high compared to what the end user is willing to pay. If the convenience of having a coat to keep me warm in winter is worth $100, I won't pay $200 for it to cover the costs of transportation etc.

            Of c

    • 1. You're paying not to see commercials 2. You're paying for the convenience of seeing whenever you want 3. You're paying for the infrastructure needed
      1. With Subscription TV you're already paying for the content, yet they show the commercials anyway. 2. Your convenience is not really something that cost money to the Studio. 3. This is a real cost, but looking at other online file services, it should be pretty cheap.

      • Re: (Score:2)

        by repvik ( 96666 )

        1. With Subscription TV you're already paying for the content, yet they show the commercials anyway.
        2. Your convenience is not really something that cost money to the Studio.
        3. This is a real cost, but looking at other online file services, it should be pretty cheap.

        1. Advertising is subsidising the content. Without it, it is more expensive. Nevertheless, it should be an option
        2. Isn't it? Keeping the content available to me at all times isn't free.
        3. Of course, this cost isn't really large. It's just a hu

    • You didn't need the article, your response is very good because it was an overly predictable rant. Frankly, the "essay" is just an "I want a pony" opinion fest. I really don't think the ranter is being realistic. For one, it costs money to run those networks and make original shows. I don't think the cable bills could pay for that. They could shrink the channel line-up significantly. You might think that's good, but I would expect that the channels that slashdotters like would be among the first to be
  • There's one born every minute

  • Bogus calculations (Score:3, Insightful)

    by aralin ( 107264 ) on Sunday January 28, 2007 @06:15AM (#17788708)
    If average person watches TV for 4 hours a day, that is 120 hours a month. With $60 a month to Comcast that means it 50c per hour of TV, with ads. If you consider that ads run anywhere from 15 to 30 minutes out of hour, lets say at average 20 minutes, you get about 80 minutes of TV for a dollar, which is subsidized by ads. I don't know how much Comcast pays to the content providers and how much ads will pay. But you are willing to pay at average 50c per TV show episode, while watching ads. So you are paying 4 times as much for no ads. Now for the author of the article and for me, if you watch about 4 shows at average, that is 20 episodes a month at the $60 for Comcast this makes $3 per episode. I think that looking at it this way, iTunes pricing is a steal. Not counting the fact that there are off-season periods when you still pay subscription to Comcast, but don't pay anything on iTunes.

    • Re: (Score:3, Insightful)

      by paeanblack ( 191171 )
      There is another huge error in TFA:

      36000 episodes per month at a mere $0.0014 each! If they take my suggestion, I'll be paying nearly 100 times more than that! How can they possibly go wrong! The maths don't lie!

      The author assumes all TV programming is of equal value. People generally assign vastly different values to different shows. An individual could easily consider his favorite show to be worth more than $1.99/episode while still assigning a very low value to the same amount of programming selected r

  • Well, let's see (Score:5, Insightful)

    by Dachannien ( 617929 ) on Sunday January 28, 2007 @06:29AM (#17788748)
    If I could pay $2 per episode for content that was guaranteed to be ad-free, DRM-free (or free enough that it doesn't hinder my fair use efforts), persistent (meaning it doesn't get deleted out from under me), and included added-value content like commentaries and behind-the-scenes features, I would.

    Oh wait, it's called buying it on DVD.

    And until these newfangled methods of obtaining TV can provide what those shiny coasters can provide, I'll stick with buying the shows I want to watch repeatedly on DVD, and PVRing the ones I only want to see once.

    • Re:Well, let's see (Score:4, Insightful)

      by Duds ( 100634 ) * <dudley @ e n t e r space.org> on Sunday January 28, 2007 @06:40AM (#17788790) Homepage Journal
      With the notable exception of the BBC's hillarious expensive $10 per episode Dr Who DVDs, very rarely can you get the DVD the morning after the show airs if you missed it. On download, you can.

    • Re:Well, let's see (Score:5, Insightful)

      by repvik ( 96666 ) on Sunday January 28, 2007 @07:57AM (#17789004)

      If I could pay $2 per episode for content that was guaranteed to be ad-free, DRM-free (or free enough that it doesn't hinder my fair use efforts), persistent (meaning it doesn't get deleted out from under me), and included added-value content like commentaries and behind-the-scenes features, I would.

      Oh wait, it's called buying it on DVD.
      Yeah, if only DVD's didn't come with annoying ads, trailers and "do-not-pirate-shit infomercials" that I can't skip, that'd make what you say true.
      • Find the code or firmware upgrade to unlock your DVD player from such annoyances. (I've yet to buy a DVD player for which this took more than a couple minutes of searching.)

        Or I guess you could copy just the movie file to a DVD-R(W).

        • Re: (Score:2)

          by repvik ( 96666 )
          I'm well aware of that possibility. I'm thinking more of the generic populace. Jumping through these hoops should be unneccessary.
      • Maybe the movie DVDs are starting that now, but I have not watched any TV series DVDs that have that.
        • Maybe the movie DVDs are starting that now, but I have not watched any TV series DVDs that have that.

          It's starting. The later Black Books DVDs have extraordinarily annoying unskippable trailers (including one for the series you're already watching).

        • Re: (Score:2)

          by Duds ( 100634 ) *
          Then you haven't watched many, for instance virtually ALL the Fox published R2 TV series recently have the "You wouldn't steal a car" ads.

      • Re: (Score:3, Funny)

        by PancakeMan ( 530649 )

        Yeah, if only DVD's didn't come with annoying ads, trailers and "do-not-pirate-shit infomercials" that I can't skip, that'd make what you say true.
        That's the "value-added content"!

    • Re: (Score:3, Informative)

      by Idaho ( 12907 )

      If I could pay $2 per episode for content that was guaranteed to be ad-free, DRM-free (or free enough that it doesn't hinder my fair use efforts), persistent (meaning it doesn't get deleted out from under me), and included added-value content like commentaries and behind-the-scenes features, I would.

      Oh wait, it's called buying it on DVD.

      Wait, so DVD's are DRM-free now? I must have missed that news.

      Last time I checked, it was still impossible to (legally) play DVD's under Linux (without cracking the DRM, th

  • Not that difficult (Score:4, Insightful)

    by NMerriam ( 15122 ) <NMerriam@artboy.org> on Sunday January 28, 2007 @06:33AM (#17788766) Homepage
    The same reason people are willing to pay 99 cents for a music file they could download free from Kazaa, or willing to pay $3.99 for a gallon of milk at the gas station they could buy for $2.50 at the grocery store just a few blocks away.

    It's shocking news to both content providers and pirates, but most people have money in their pocket and they don't mind spending it on things that they like when it is made convenient to do so. They are particularly happy to spend more when it saves them time and gives them a guarantee of quality, both of which are major motivators of buying songs/TV shows rather than simply getting a radio or cable hookup.

    Keep in mind that if you want to watch particular shows and don't have an infinitely flexible schedule, you'll need to include the price of a TiVo or something similar to make sure you're recording all those "cheap" shows. And you'll have to wait for a rerun or a DVD to be released if you missed an episode.

  • Math? (Score:2, Interesting)

    by guffe ( 771664 )
    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 Com

  • missing options (Score:2, Interesting)

    by cl191 ( 831857 )
    "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?

    • Re: (Score:2, Insightful)

      by Pingla ( 64700 )
      Because some people are actually willing to support the producers of shows they like so that such shows can continue to be produced. Also, there are many people who would want to stay on the right side of the law unless it is too costly (monetary and resource). The amount of money we are talking about per show is very small to most people.
      Personally I would gladly pay $2 per show directly to the producer in order to be able to watch it when it is 'aired' in good quality.

  • Me! (Score:3, Interesting)

    by babbling ( 952366 ) on Sunday January 28, 2007 @06:54AM (#17788846)
    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.

  • We Bitch But Prefer Commercials (Score:4, Insightful)

    by logicnazi ( 169418 ) <gerdesNO@SPAMinvariant.org> on Sunday January 28, 2007 @07:01AM (#17788862) Homepage
    Of course a big part of the reason that cable is so cheap per show is that they show advertising. To answer all those people who are bitching about having to pay for cable when it has commercials I want to point out that you pay a relatively small amount for quality (and many not so quality) cable shows because of these commercials. Sure you can argue that the locally inserted commercials by the cable company are a needless waste (but remember cable has far fewer customers than phone so they must split up the cost of their network over fewer people) but if you want big budget shows with high production values you either need to charge the way HBO does (10-15 bucks per channel per month) or fund them with commercials.

    I suspect others will point out that the amount the advertiser is paying per viewer is much smaller than the cost of say an iTunes download hence it should be economical to have relatively cheap commercial free download, e.g., each downloader just needs to cover the total amount an advertiser would have paid to get commercials to you. From my quick google research [everyonecounts.tv] it seems likely that the cost per impression in the male 18-34 age group (also the download group) it is about .2c. Given a 30minute program has 6 minutes of commercials that means about $1.20 of commercials (I suspect this might be a hit high but still roughly on target). Throw in the costs of the lost commercials from reruns (how frequently have you seen the same program a second time?) and the $1.99 price begins to seem relatively reasonable. Remember the viewers that are being lost to download aren't the people who are leaving their TV on while they do something else, they are the valuable viewers who are watching closely.

    If you are willing to watch commercials in your download then it's a different story but if you aren't you have to ay to replace the money the commercials would have brought in.

    Also these sort of pay per show model is only ever going to be an alternative to the normal model never a replacement. Sure we will pay for commercial free versions of our favorite shows we follow but most TV watching is done casually (I wonder if there is anything on) and no matter how much you bitch about commercials I doubt you would pay to watch a show just because you had 30minutes to kill but you will watch a show with commercials for that reason. We vote with our actions and those say we want a flat rate model that lets us watch shows for no extra cost when we feel like it.

    It's just the same way that people bitch about ads at the start of movies but no matter how much people bitch they never go spend an extra $2 to go to the theater with less ads.

    • Re: (Score:2)

      by hughk ( 248126 )
      The interesting thing is whether we had a choice, for TV or for the film example. In both cases, the advertising has crept up to an annoying level. The thing is that advertising time costs have plummeted. If you don't want half-time at the Superbowl or a hand full of popular shows like Desperate Housewives or Lost, slots aren't that expensive anymore because the market has become saturated. When I'm travelling in the US and don't have the luxury of a PVR, I find the frequenecy and length of the advertsing a
      • You illustrate my point perfectly. You find commercials annoying and complain about them but it doesn't sound like you stop watching TV when you don't have a DVR. Heck I suspect you don't even care enough to change which shows you watch based on differences in the length of commercials.

        We clearly do have a choice. Different theaters get to choose how many ads they show before the film (though the film has some control over this too). Certainly the studio and the theater together have this control and if
    • Because, if there are 12 minutes of commercials per hour, then people who make over $9.95 an hour who watch live TV attentively could be considered to be losing money. As long as they don't enjoy watching commercials more than they enjoy their job, which I consider to be a pretty frightening concept.

      Personally, I would love to pay an extra $2 for a theater with no ads... but there aren't any. And I use a HDD recorder for casual stuff and buy DVDs for stuff I like. Oh wait, I watch the weather network live

      • Maybe you do in the abstract but I suspect when you go to the theater you don't bother to think about which theater has fewer ads. Different theaters do have more or less ads but even the people who bitch the most about the ads pick their theaters based on location, size, or theater quality never number of ads. I mean hell at the movie theaters if you care enough you can just show up a few minutes late but most people seem to prefer taking their seat early and not rushing to avoiding the commercials.

        In fa
    • You're forgetting some of the commercials....

      First: There's the 'bug' in the corner. The distracting annoying semi-fully opaque icon in the corner of your program. Sometimes those icons are animated to grab your attention while trying to watch the show. Those are there for the entire span of each show. Then there's the banner that shows up on the bottom of your TV, covering about 20% of the screen, to notify you of important events such as who's on Oprah tomorrow. Those appear just before commercials, a
      • I've heard of better and worse versions, but I'd far prefer product placement only, rather than full ads. All Big Media is driven by money, so I'm not going to expect Free as in Speech from a commercial show.

        Certain vendors have exclusive sales deals with particular sales outlets, so if someone went to the Kentucky Chicken ... because he wanted a bowl of wings... I'll accept that because at least in my area, there are no other choices for bowls of cheap LukeWarm DeadBird ... er, Fried Chicken Wings.
      • Ohh you're saying there are MORE than 6 minutes of commercial time per 30 minutes? That means the cost to purchase the show commercial free should be even greater.

        'These asshats' have a product and they are offering to sell/give it to you. If you don't like it you don't have to buy it but the idea that you are OWED ad free TV or they are committing some sin for not giving you the entertainment you want is just absurd.

        And how is this content that you have paid for? Because you ordered basic cable? That m

  • Changing the business model of television (Score:5, Interesting)

    by Carniphage ( 827184 ) on Sunday January 28, 2007 @07:30AM (#17788930)
    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: (Score:3, Informative)

      by KokorHekkus ( 986906 )

      ...Reality shows would have to stick in advertising land, because no-one would pay for that crap...

      It's sad but you are wrong about that part. The makers of reality shows, especially 24/7 ones like Big Brother, already make a sizeable chunk of money on webcast subscriptions. If anything there would be even more of that reality crap with the direct model because the main constraint for them would go away namely availability of airtime. Part of why reality shows are popular among the tv networks is that they

  • Numbers are stupid. (Score:2, Insightful)

    by etnu ( 957152 )
    Between my wife and I, we watch the following shows on a regular basis: (Winter): - Battlestar Galactica (Sci Fi, 1 hour, 26 hours per year with commercials) - Rome (HBO, 1 hour, 26 hours per year with no commercials) - The Office (NBC 1/2 hour, 12 hours per year with commercials) (Spring): - The Sopranos (HBO, 1 hour, 26 hours per year with no commercials) - Big Love (HBO, 1 hour, 26 hours per year with no commercials) (Year round): - The daily Show (Comedy Central, 1/2 hour, 150 episodes per year with

  • How to compete with free (Score:3, Insightful)

    by AmiMoJo ( 196126 ) on Sunday January 28, 2007 @08:08AM (#17789052) Homepage Journal
    Competing with free means two things. First, you need to provide a quality product. No commercials, high definition, good bit rate, no DRM. Then, you have a product that is as good or better than free. The reason I don't buy DVDs is that when I want to watch a film, I want to watch a film and not commercials etc. 99 hours of "bonus content" generally does not add any value for anyone except hard core fans. I don't really care how they made the trees in LOTR.

    The second thing big content needs to do is get the price right. People pay for their internet connection, cable TV, maybe a premium Usenet account etc. because they want to download content. So, like it or not, they already paid and can get TV for no extra cost. If you want more money out of them, it had better not be too much and you had better make the buying experience damn good (i.e. very high speed downloads, no special software required). It has to be simultanious with the first showing on TV too.

    Oh, and never forget, just because you spent a lot of money making it doesn't mean it's worth a lot. Your content has to be good, not expensive. Make old BBC Horizon programs from the 80s available for 20p, and I'll bite.
    • The reason I don't buy DVDs is that when I want to watch a film, I want to watch a film and not commercials etc. 99 hours of "bonus content" generally does not add any value for anyone except hard core fans. I don't really care how they made the trees in LOTR.

      I'm assuming if you're on slashdot, you know how to work a DVD player (I know, dangerous assumption...). Anyways, I'm not sure if you've tried playing a DVD lately, but other than the annoying anti-pirate shit, you can skip the previews on most DV
  • Writing an essay that proposes a plan for a more fine-grained payment structure for big content providers: +4, Interesting

    Writing an article that uses hard math to show how $1.99 generates more revenue for content providers than subscription/advertising currently does: +5, Informative

    Writing your 3rd blog post about how you feel you should pay less for television because of bogus math and then posting it to slashdot with a tagline so awe-inspiring that the editors put it on the front page without even rea
  • For the same reason people pay $8 or more to buy a movie that's 4 times the length of a t.v. show.

  • 'nuf said. (Score:3, Insightful)

    by jpellino ( 202698 ) on Sunday January 28, 2007 @09:07AM (#17789218)
    "I watch about four different television shows on a regular basis - Lost, Battlestar Galactica, Heroes, and typically a current reality show (which is Grease: You're The One That I Want right now)"

    *blink*

    OK - of all the content on a full menu of cable or sat, this is the sum total of what you find compelling?

    I know there's no accounting for taste, but you're hardly their typical demo.

    Most of us are paying full price for a house and really only using three rooms and reallly only for a half the day at best. What's up with that raw deal?

    You pay the $1 or 2 to listen or watch whenever you want, as often as you want. No one's holding a gun to your head, and it's an alternative to buying DVR etc. This is a vaguely similar argument to the music sedction, usually pointed at Apple - thet they're "forcing" you to adopt their model. Wrong. There are many music providers. being the market leader is not the same as being an unregulated monopoly.

    Which leads us to the cable company. They deregulated cable AFTER the wires were laid down, and unlike the local telcos who are merely the custodian of the infrastructure and must let anyone send their info over the copper, the cable companies have no established way of letting anyone else down the coax. The satellite system is similar - as long as the financial agent owns the pipe, it's their ball and they can go home.

    About the only thing I'd change about any video delivery model is make sure it's a la carte, for the sake of scaling down rising cost. The industry is claiming that it will cost a bajillion dollars per person to do this, but that's what they said about seat belts, air bags, ABS, flying car^H^H^H^H^H^H^H^H^H^H personal cell phones and DVD players.

  • I worked in cable advertising for ten years, and there are a few things being overlooked here. Production companies make the shows. They sell them to the networks, who pay for them by running ads. The cable companies buy networks in packages. That's why there was the huge drama when Disney/ABC content was getting dropped from Time Warner systems. The argument was over Disney channels, not ABC affiliates. Because they're sold to TW as a package, when they pull one, they pull all of them. When a cable company
  • 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.

  • DVD/VHS comparison? (Score:3, Funny)

    by jbreckman ( 917963 ) on Sunday January 28, 2007 @10:14AM (#17789488)
    I stopped reading when he claimed VHS looked better than DVD.
  • I watch about 3 shows a week. That's about $6 a week which equates to $24 a month versus my cable bill which is $45. If I buy them through iTunes I also don't have to watch the ads.

    Obviously this is a DEAL for me.
  • If you only really care to watch 1 or 2 shows, then even the basic cable subscription (say, $20) is going to be more expensive than paying $1.99 / episode to download the show ( 2 bucks * 4 new shows a month = 8 bucks, 16 bucks for two shows ).

    And on top of that, no commercials to wate time on, no schedule to keep or PVR to buy, etc etc.

    Cable is only a better value for people who watch a lot of TV. I have digital cable, and the movies package, several other packages, etc etc. I pay over $90 a month for my cable. I love it, and think I get good value (I watch a lot of movies), but I can easily see the other side as well. I have friends and relatives who haven't had cable TV in years and are perfectly content to watch their 1-2 shows a week downloaded.

    To each his own. There is never going to be a pricing model that fits everything. It's the same reason there is both subscription cell phone coverage, and PayGo cell phone coverage.

    Both cable and pay-to-download are here to stay IMO.

  • al a carte subs (Score:3, Interesting)

    by man_ls ( 248470 ) on Sunday January 28, 2007 @01:20PM (#17790456)
    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.

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