My wife and I travel a lot (not for business). Airline service is in fact much worse than it used to be, unless you are willing to buy business or first class. The extra charges for extra leg room are a joke. You don't really get extra legroom.
1
Hello, DOJ?
You do remember that we have the Sherman Anti-Trust Act right?
You do remember that we have the Sherman Anti-Trust Act right?
1
I don't think these two are analogous situations.
Airline "unbundling" is just them asking you to pay extra for what they consider perks/things they feel have financial value, and they can capitalize on, because SOME people regard them as valuable, complementary (in addition) to your flight.
The cable situation is completely different. Before they were sticking you with 1500 channels you never needed, and charging you the full price, even if you only wanted 10 or so channels. But now, you have the option of selecting & paying for just what you use.
It's not like you could get a rebate if you didn't use the in-flight meal, or checked only one bag.
Airline "unbundling" is just them asking you to pay extra for what they consider perks/things they feel have financial value, and they can capitalize on, because SOME people regard them as valuable, complementary (in addition) to your flight.
The cable situation is completely different. Before they were sticking you with 1500 channels you never needed, and charging you the full price, even if you only wanted 10 or so channels. But now, you have the option of selecting & paying for just what you use.
It's not like you could get a rebate if you didn't use the in-flight meal, or checked only one bag.
2
I'm reminded of the way you used to buy a car. If you dickered on price, that gave the salesman only one number to play with. If you added trade-in, he had two numbers and a lot more scope for playing. Add in dealer financing and there are more numbers to play with (particularly since he might choose to use some of his kickback from the loan company to reduce the apparent price).
In other words, more numbers to play with means more scope for bamboozling the customer, creating something that looks good to the customer but works for the salesman's bottom line and bonus. It shouldn't be a surprise, then, that unbundling produces yet another confusing shell game.
In other words, more numbers to play with means more scope for bamboozling the customer, creating something that looks good to the customer but works for the salesman's bottom line and bonus. It shouldn't be a surprise, then, that unbundling produces yet another confusing shell game.
1
I don't think it's a good comparison. I would rather compare the current cable structure to having to pay for a twelve course meal in order to get a bowl of soup.
2
Except that airline tickets are more expensive now than before they were unbundled.
1
Incorrect, they are not over the long term. The fully bundled tickets back in the 1970s and early 1980s referenced in the article (no change fees, etc) were far higher than the prices today. Back in the late 1970s, it cost $300-400 to fly cross country...that is in line with what it costs today. But of course, accounting for inflation, that means that is only 1/3 of the price today...so its far cheaper now. And this has allowed air travel to be opened up to masses of people who couldn't have afforded to fly back in the previous era (when air travel was largely for the 1%). The next time you are seated next to one of those new masses, you can consider that fact.
1
Cross country? C'mon. That's so far out on the end of the bell curve as to be meaningless.
Pick this city pair instead: DFW-STL, 600 air miles. Thirty-five years ago, at the dawn of dereg, this was a $118 round trip. Today it's $314, nearly triple. And just for comparison's sake, I priced today's trip with a two-week advance purchase and a Saturday-night stay.
Pick this city pair instead: DFW-STL, 600 air miles. Thirty-five years ago, at the dawn of dereg, this was a $118 round trip. Today it's $314, nearly triple. And just for comparison's sake, I priced today's trip with a two-week advance purchase and a Saturday-night stay.
3
One more thing to think about as cable unbundles its packages and serves ala carte: Net neutrality (or more specifically the loss of it). You will be able to select your individual stations and channels- great joy! But beware. You will soon be asked to pay more for a higher speed signal. This may not even be obvious to you, but they will be able to start charging a surcharge for HD content, streaming and the ever-increasing On-Demand content. We need regulators!!
2
I don't get the point of this article unless it is simply that no matter what consumers will always be victimized by paying more than they logically should for whatever they buy. It's called Capitalism. Get used to it.
The model for providing cable service supports bundling for a variety of reasons, almost all of them beneficial for customers. The most important is in the area of programming costs. Per-subscriber fees cable companies pay networks now are relatively low because they are spread across all subscribers. If networks were unbundled, then less-viewed channels would have to charge cable companies more in fees per subscriber to stay profitable. Even mega channels would have to raise the fees they charge cable companies, resulting in subscribers paying more for each channel they selected in an unbundled world. Bundling also works because cable companies have fixed costs whether they deliver one or a hundred channels to each home—labor, fiber optics, franchise fees, pole attachment fees, converter equipment, etc. In an unbundled world programming costs and prices would have to rise because fixed costs could not be reduced. Therefore--in an extreme example--if all subscribers selected only five channels the fixed costs plus the higher programming costs noted above would result in basically the same price subscribers pay now with completely bundled services. The current model of delivering cable programming has resulted in the rich diversity of offerings we have today, financially supported and nurtured a diversity of programming giving a voice to those who were shut out of mainstream media for decades, and rapidly deployed innovative technolgy such as high-speed Internet.
1
The problem is, it also has created a revenue model where regional sports networks can charge ridiculous amounts of money from people who have no interest in their content. Which has led to things like the Sportsnet LA debacle in LA, where the Dodgers were shunted onto a channel which carries no watchable content other than 150 Dodger games and costs so much (and demands to be placed in the basic cable package rather than just be sold to people who want the channel) that no cable or satellite system wants to carry it.
If the whole regional sports thing hadn't happened, I suspect that bundled cable would have probably survived a long time. But it can't now-- sports channels are just charging so much money that it has become unfair to hit non-sports fans with the charges.
If the whole regional sports thing hadn't happened, I suspect that bundled cable would have probably survived a long time. But it can't now-- sports channels are just charging so much money that it has become unfair to hit non-sports fans with the charges.
One downside to the emerging model, and ghost is already happening today, is that choice = time and energy spent on making the choice.
One aspect of airlines thst is similar is that we now have to spend our time finding the right fare, then the right total fees, at the right time to purchase. I for one view transport as a commodity; all I want is fair pricing and service.
Similar to this is the cellphone indistry, where the complexity of pricing models and the possibility of minth end gotchas turns whst should be a simple, understood process into something thst needs to be managed. It's on a network connection!
With multiple delivery media and models comes choice sure, but I really just want to watch the few sporting events, TV shows and movies when I want at a reasonable price. The progilateriona of choice means I can choose,mgr eat, but at the cost of my most valuable resource, my time.
So while I cheer the concept of unbundling, it's going to make us spend more time deciding how to watch what we want, and they are just pies after all.
One aspect of airlines thst is similar is that we now have to spend our time finding the right fare, then the right total fees, at the right time to purchase. I for one view transport as a commodity; all I want is fair pricing and service.
Similar to this is the cellphone indistry, where the complexity of pricing models and the possibility of minth end gotchas turns whst should be a simple, understood process into something thst needs to be managed. It's on a network connection!
With multiple delivery media and models comes choice sure, but I really just want to watch the few sporting events, TV shows and movies when I want at a reasonable price. The progilateriona of choice means I can choose,mgr eat, but at the cost of my most valuable resource, my time.
So while I cheer the concept of unbundling, it's going to make us spend more time deciding how to watch what we want, and they are just pies after all.
2
The cell phone phenomenon is maddening. Last time we went to AT&T, we spent who-knows-how-long figuring out that even though there were a zillion packages to choose from that would have given us our required 4 lines (2 couples), somehow the total bills for each such package were all the same. The amount of data is irrelevant. Whether you have data at all is almost irrelevant (but not quite--there is a $5-per-line dumb phone discount).
I really don't see the point that this article, that unbundling is not that good a thing, holding up airline as an example.
In the bygone era, air travel is but for the more affluent. You pay a much higher ticket price, and you buy into the "class." You get your wine, legroom, pleasant service, even pleasant seat neighbors whom you're stuck with for a number of hours.
Now, we get to choose, and ticket price goes down precipitously. We pay less, and we can travel more. You could look at it as glass half-empty, for the fact that you lost all the classy stuffs; but you can also look at it as glass half-full, because you can get to choose what classy stuffs you want and how much you want to pay. CHOICE, to me, is a good thing. Apparently, writer of this article disagrees.
And to apply that same theory to cable, and say it's a bad thing? It's even more farfetched and ridiculous. Look, at least when you're on a plane, you get to enjoy all those classy stuffs (wine, food etc). But you're talking about cable channels that you don't even watch. Why would you want cable company to charge you for something that you never use? That argument is just absurd.
To be sure, cable companies have to adapt to survive, they don't really have a choice. Younger generations are so used to on-demand service, and there are tons of service (a lot of them free), the argument for bundling will never fly. Times change, and cable has to roll with it; else, it'll get whittled and die.
In the bygone era, air travel is but for the more affluent. You pay a much higher ticket price, and you buy into the "class." You get your wine, legroom, pleasant service, even pleasant seat neighbors whom you're stuck with for a number of hours.
Now, we get to choose, and ticket price goes down precipitously. We pay less, and we can travel more. You could look at it as glass half-empty, for the fact that you lost all the classy stuffs; but you can also look at it as glass half-full, because you can get to choose what classy stuffs you want and how much you want to pay. CHOICE, to me, is a good thing. Apparently, writer of this article disagrees.
And to apply that same theory to cable, and say it's a bad thing? It's even more farfetched and ridiculous. Look, at least when you're on a plane, you get to enjoy all those classy stuffs (wine, food etc). But you're talking about cable channels that you don't even watch. Why would you want cable company to charge you for something that you never use? That argument is just absurd.
To be sure, cable companies have to adapt to survive, they don't really have a choice. Younger generations are so used to on-demand service, and there are tons of service (a lot of them free), the argument for bundling will never fly. Times change, and cable has to roll with it; else, it'll get whittled and die.
5
I have been advocate of unbundling cable channels for years and I think this analogy is full of wholes. As another commenter said, comparing apples to oranges. What bundling has done is pay for the creation of a ton of channels and content no one really wants... channels they would never ever select a la carte even if they stop now and again to watch something while channel surfing.
But here is the real truth as I see it if the consumer were allowed to buy a la carte: people like me, maybe 30% of the customers, would be willing to pay $30 or $40 for the 15 cable channels we really want instead of $80 for all of them so we can get those 15. But, the other 70% would be glutinous and still buy the bundles whether they needed or wanted them or not because it would be perceived as the "better deal". And, if most people went a la carte and 30% of the cable channels vanished we would all be better off.
I personally refuse to pay for a bundle of cable channels and only get the local networks and HBO and Showtime packages from Dish Network and tell them I refuse to pay for a high priced bundle of stuff I don't want and will buy unbundled channels when finally offered. I have done this for years, and after the first few, they changed their policy and forced me to pay $10 for a small bundle of non-HD channels to access the other channels I just mentioned.
But here is the real truth as I see it if the consumer were allowed to buy a la carte: people like me, maybe 30% of the customers, would be willing to pay $30 or $40 for the 15 cable channels we really want instead of $80 for all of them so we can get those 15. But, the other 70% would be glutinous and still buy the bundles whether they needed or wanted them or not because it would be perceived as the "better deal". And, if most people went a la carte and 30% of the cable channels vanished we would all be better off.
I personally refuse to pay for a bundle of cable channels and only get the local networks and HBO and Showtime packages from Dish Network and tell them I refuse to pay for a high priced bundle of stuff I don't want and will buy unbundled channels when finally offered. I have done this for years, and after the first few, they changed their policy and forced me to pay $10 for a small bundle of non-HD channels to access the other channels I just mentioned.
1
Beware. With ala carte pricing you will see a significant loss of choice. Sure, it is a free market and the HBO's and ESPN's of the content world will still do well, but most networks of any value, educational, historical, and the like, will not be able to exist standalone, the variety you get is subsidized by the most popular networks. Grandma won't get her Hallmark Channel either. Get ready for a world of sports, reality shows, and celebrity gossip channels. Oh, wait, and Fox News, since they are the only "news" network able to get ratings.
And yet AcornTV makes money streaming only programming from Britain, Ireland, Canada, Australia, and New Zealand, while everyone I have told about MHz Worldview (international newscasts and European dramas) has been eager to try it, so the notion that there is no audience for high-quality programming is dubious.
I would still be a cable subscriber if channels such as History, Discovery, Bravo, BBC America, and A&E had stuck to their original programming formats. They lost me and a lot of other cable subscribers when they went to all trash, all the time. You should have seen how indignant people on BBC America's and A&E's own websites were when they reduced the quality of the programming, especially when BBC America dumped current dramas and comedies in favor of reruns of Star Trek: The Next Generation and the U.S. version of Dancing with the Stars, or when A&E dropped its last scripted series in favor of crude and violent "reality" shows.
I would still be a cable subscriber if channels such as History, Discovery, Bravo, BBC America, and A&E had stuck to their original programming formats. They lost me and a lot of other cable subscribers when they went to all trash, all the time. You should have seen how indignant people on BBC America's and A&E's own websites were when they reduced the quality of the programming, especially when BBC America dumped current dramas and comedies in favor of reruns of Star Trek: The Next Generation and the U.S. version of Dancing with the Stars, or when A&E dropped its last scripted series in favor of crude and violent "reality" shows.
1
I certainly hope you are correct and channels that offer things other than sports and reality TV survive. There may be some that are able to thrive, but having worked in the business, i doubt many will have the subscribers or revenue to survive on their own.
You could always travel by train & not watch TV at all.
LOL
LOL
A little more expensive? You know it's a lot like my dad, who used to buy "SLCs" (shi**y local cookies) for the grandkids, because they were cheaper. The kids wouldn't eat them, so how much did my dad actually save by not buying the Oreos they really liked? Didn't get any brownie points, either.
4
I think this article (and the preceding one) is comparing apples and oranges. There was an analogy about how un-bundling would be like selling sections of the NYT. However, a better analogy would be a newsstand (distributor) making you buy every daily newspaper (for say a cost of $10) or none at all. Imagine if I had to buy the NYT, WSJ and Daily News if I wanted any of them! Even worse, there is implicit collusion between the content companies by ensuring their channels are in certain tiers, so really the decision isn't even the distributors, but the content companies to say if you want CNN, you must also buy ESPN. It's a very odd market that you can be forced to buy two products together from different companies. Also, while this kind of behavior would be quickly corrected in a free market (a new newsstand would pop up quickly without this bundling policy), a.) The barriers to entry are high for cable distributors b.) The content companies are the ones making the rules, so it's difficult to see how this would change unless there is a law or the content companies go too far as far as pricing.
4
While the unbundling concept is similar, people consume flights and TV channels very differently. Cable TV is unbundling hundreds of items most people don't want, while airlines unbundled items that most of us liked and used most of the time: legroom, assigned seats, entertainment, drinks, checking luggage. Meanwhile, most people don't ever watch most of the 600 channels they pay for. There is no one major non-negotiable TV item, the way the actual point-A-to-B flight is the non-negotiable item for the airlines. For some people the main thing is HBO, for others it's CNN or ESPN or CBS. For still others, it's cable internet. I have subscribed to Dish Network for years to watch only what I actually want to watch on TV -- European English-language channels and European soccer leagues -- and use cable only for Internet service, and for all this, I only pay $60 a month.
2
One of the things that the unbundling crowd also forget is the cost of the broadband connection as well. It is great to think if you don't get cable tv, it will be a lot cheaper, since internet alone is a lot cheaper than paying for internet+cable bundle. What the 'cut the cable' people are forgetting is that cable companies make money off the cable tv, and to a certain extent that subsidizes the internet cost (hence, you get the triple play prices that in some cases are almost cheaper than internet alone). More importantly, cable companies often own the channels they provide, they charge you for them, and if you 'cut the cable', they will shift that cost into the internet. Not to mention that if you want to stream HD, you will need higher bandwidth, given that a lot of "15 MBPS" feeds are really like 6 or 7......not to mention, of course, that for the things you want to watch when you stream, you will pay more, too, and in the end they will get you one way or another.
3
Beware unbundling. On a recent trip on American, the website showed tickets available at a certain price, which we accepted. Then, while selecting seats, the only ones available required an upcharge. Shady since the fare quoted was not actually available.
Under these circumstances, the right move is to buy the lowest priced tickets, and not to choose a seat at the time that you buy. The Airline will choose a seat for you later (or even let you choose your own). One way or another, you'll get a seat. In my experience, you generally get the seat that they were originally trying to get you to pay extra for.
The comparison Mr. Irwin makes between the cable industry and airline industry is inaccurate when viewed in the context of "unbundling." It's more a distortion or perversion when analyzed in this way.
Instead, what these 2 industries share is akin to predatory monopolistic practices. With consolidation and deregulation over the years there are simply less choices. Add to this ever increasing rate "adjustments" that continually skew upward and what you're left with are industries that continually charge more while offering less.
With the cable industry you're lucky to get a duopoly (cable or DSL), with little to no service in rural areas. Programming primarily consists of constant commercial interruptions, little to no original shows and numerous redundant channels that simultaneously display the same infomercials so cable companies companies might claim packages with more than 200 channels.
With airlines you choose between a handful of North American passenger carriers offering fewer flights and higher fabricated fees. Each passenger experiences artificially higher ticket prices, increasing discomfort from ever decreasing leg room and seat space creating more crowded flights and constantly fluctuating rates along with Petri dish inspired breathing environments. Airlines enjoy little to no competition between routes and higher profits especially when fuel prices decline.
Now, shall we discuss the consumer benefits of "unbundling" the cell phone industry...?
Instead, what these 2 industries share is akin to predatory monopolistic practices. With consolidation and deregulation over the years there are simply less choices. Add to this ever increasing rate "adjustments" that continually skew upward and what you're left with are industries that continually charge more while offering less.
With the cable industry you're lucky to get a duopoly (cable or DSL), with little to no service in rural areas. Programming primarily consists of constant commercial interruptions, little to no original shows and numerous redundant channels that simultaneously display the same infomercials so cable companies companies might claim packages with more than 200 channels.
With airlines you choose between a handful of North American passenger carriers offering fewer flights and higher fabricated fees. Each passenger experiences artificially higher ticket prices, increasing discomfort from ever decreasing leg room and seat space creating more crowded flights and constantly fluctuating rates along with Petri dish inspired breathing environments. Airlines enjoy little to no competition between routes and higher profits especially when fuel prices decline.
Now, shall we discuss the consumer benefits of "unbundling" the cell phone industry...?
3
Not to mention that all of this programming comes through the www, not cable laid out for TV. Broadband services will overload. As written by an expert, "Streaming media is never going to be as reliable, scalable or as high-quality as cable TV, even in the future." A rebuttal to that statement is here: http://www.overdigital.com/2013/01/14/will-online-streaming-ever-replace.... But ultimately, is digital over-the-internet delivery a proper substitute for broadcast TV, given current infrastructure and business models? That is the question.
1
This article completely misses the point. A lack of competition, not a lack of alla cart pricing, is the problem. The natural state of capitalism is monopoly, with the rich monopolist buying preferential treatment from the government.
This is true for both airlines (which have merged to eliminate competition) and cable TV.
This is true for both airlines (which have merged to eliminate competition) and cable TV.
7
And that is why both industries were highly regulated in the past. Years of lobbying and law changes have removed almost all control of these services. What people need to do is tell these industries and our lawmakers that the right to the skies, airwaves and telephone poles are not private and that regulation, transparency, and fairness are needed.
Wait, what about net neutrality???
Wait, what about net neutrality???
I wish I could just pay the BBC for a UK TV License and watch using their iPlayer, without having to jump through internet proxies...
4
My sentiments exactly. Being able to choose already-existing cable channels doesn't interest me as much as being able to subscribe to TV from outside the United States without having to use proxies.
1
A more accurate comparison between unbundling cable and what the airline industry has done would be this: My cable company removes ESPN from my $100 a month package, then continues to charge me $100 per month for the package + $20 for ESPN but I must continue to pay for the package in order to have the right to pay also for ESPN.
One key difference is that without the base ticket, nothing else is needed. I don't need an airline meal, or luggage service if I don't have a ticket to fly. With cable, I'd love to get rid of 99% of a package and pay only for the channels I actually care about. Of course I end up paying more per channel but who needs 300 when I only watch 5?
One key difference is that without the base ticket, nothing else is needed. I don't need an airline meal, or luggage service if I don't have a ticket to fly. With cable, I'd love to get rid of 99% of a package and pay only for the channels I actually care about. Of course I end up paying more per channel but who needs 300 when I only watch 5?
3
No kidding. I don't have cable. The only cable I would like to buy is ESPN and HGTV. If unbundling makes that possible at a reasonable fee, it's a win. For people who sincerely want 200 at their fingertips, it will be a loss and may even completely do in some of those unpopular 200 networks since so few people will subscribe to them. It's like the $9 sandwich. Airline food is terrible, and I say good riddance, but please let me buy ESPN, esp. now that they have a monopoly on all the college championships.
Josh's article last year was wrong on a few levels. This article is wrong as well. What's important to understand is the price you pay depends upon "how many channels you buy, how frequently your buy, when & where watch, etc."
1st., you are overpaying if you buy ANY local channels; they are free "over the air" but they are "PAID" when a cable company transmits via their cable -- A digital antenna works well for most and certainly anyone who is price sensitive.
2nd., Looking at cable TV shows and "Premium channels" -- and in this context Josh's article is right IF your family is large and/or you consume a lot of programs of different types, from many types of networks - a bundle that includes everything can be cost effective.
3rd., if we remove the cost of local TV and assume you just want to watch specific channels (or shows) than Josh's calculations are certainly wrong. The question becomes when you want to watch a "new" channel or a show on an ad hoc basis -- should you subscribe to an entire bundle to get one network, or a whole network to get 1 or 2 shows? Ask the music industry!
4th., another reason Josh's calculations are clearly wrong is the time and place value of information; do you need to watch a show as a "first run" or can you wait until later and watching it on a App/website like Netflix or Amazon Prime?
5th., If you limit your intake to specific networks or shows (through Google Play, Apple iTunes, NetFlix) your costs can be much lower ala carte.
1st., you are overpaying if you buy ANY local channels; they are free "over the air" but they are "PAID" when a cable company transmits via their cable -- A digital antenna works well for most and certainly anyone who is price sensitive.
2nd., Looking at cable TV shows and "Premium channels" -- and in this context Josh's article is right IF your family is large and/or you consume a lot of programs of different types, from many types of networks - a bundle that includes everything can be cost effective.
3rd., if we remove the cost of local TV and assume you just want to watch specific channels (or shows) than Josh's calculations are certainly wrong. The question becomes when you want to watch a "new" channel or a show on an ad hoc basis -- should you subscribe to an entire bundle to get one network, or a whole network to get 1 or 2 shows? Ask the music industry!
4th., another reason Josh's calculations are clearly wrong is the time and place value of information; do you need to watch a show as a "first run" or can you wait until later and watching it on a App/website like Netflix or Amazon Prime?
5th., If you limit your intake to specific networks or shows (through Google Play, Apple iTunes, NetFlix) your costs can be much lower ala carte.
2
I wish that the UPSHOT would highlight how much money the airlines are saving thanks to the reduced costs of oil/fuel. Instead of charging us more for everything we should see fares go down. The airlines should pass along the savings to the customers.
PAUL FEINER
Greenburgh, NY Town Supervisor
PAUL FEINER
Greenburgh, NY Town Supervisor
2
What makes the airline industry, as opposed to, say, the restaurant industry, the right benchmark for judging whether unbundling in the cable industry would be a good or bad thing?
I'd rather be able to choose WHETHER I want an appetizer, an entree, a dessert, and/or a drink (and WHICH appetizer, entree, dessert, and drink) at prices set per item, than to have the restaurant's choices all forced on me at a single price.
I seldom feel that being asked to look at a menu "make[s] the experience unpleasant."
I'd rather be able to choose WHETHER I want an appetizer, an entree, a dessert, and/or a drink (and WHICH appetizer, entree, dessert, and drink) at prices set per item, than to have the restaurant's choices all forced on me at a single price.
I seldom feel that being asked to look at a menu "make[s] the experience unpleasant."
1
One thing missing from the entire argument about bundling and unbundling cable is that sending every channel without sorting to everyone is the easiest thing in the world. Having the cable company keep track at the main office which device gets which channels is a lot more expensive than just sending everyone everything.
It would never be cheaper to add more computerized intelligence to the system, which is what it is because it's like a fire hose of programs, versus a postal system for delivering TV.
If people really hate certain stations, just create a "favorites" list on your cable box and have the system automatically skip the stations you dislike.
If unbundling is ever done on a large scale (it is already done on a small scale with the premium and foreign language channels), you will never broaden your horizons, because you will never pay to try something new when now you can sample anything you like and just ignore it if you don't like the "sample".
It would never be cheaper to add more computerized intelligence to the system, which is what it is because it's like a fire hose of programs, versus a postal system for delivering TV.
If people really hate certain stations, just create a "favorites" list on your cable box and have the system automatically skip the stations you dislike.
If unbundling is ever done on a large scale (it is already done on a small scale with the premium and foreign language channels), you will never broaden your horizons, because you will never pay to try something new when now you can sample anything you like and just ignore it if you don't like the "sample".
So if I don't want to subsidize the "Hannity" show, I'll be sorry?
One area in which the airlines continue to befuddle. It used to be possible to get an earlier flight out if one arrived at the airport in time to catch one. Airlines would readily exchange tickets without charging any fees because with the extra time they could more readily sell another ticket on a later flight.
This has not been a viable option (for economy passengers for years) even though—to put it plainly—it makes no economic sense. It is just another reason we all hate airlines.
This has not been a viable option (for economy passengers for years) even though—to put it plainly—it makes no economic sense. It is just another reason we all hate airlines.
2
I think this article uses a lot of misleading assumptions. In order to better understand the dynamics one should consider the monopoly and unfair regulatory aspects of cable and airlines. Unbundling is not what is going on. Gouging and concealing true costs with silly, frivolous fees is. People don't even question why they should need to pay a fee for a bag or a reasonably comfortable seat. Their ought to be more regulation. A person could not simply open up a new airline to compete with the existing ones. There is no competition. Cable is even worse. I know of no regions that are serviced by more than one cable company at a time. None. You are stuck with the local monopoly. You don't have any choices if you want a different provider.
People also neglect to mention that to get the high speed cable you need to "cut-the-cord" you need to buy those internet services from the very company you are claiming to have cut ties to. Always at a premium too. You want high speed internet only and no cable? I guarantee you they will charge you more than if you "bundled" your internet with a cable and phone package.
So unblundle your airline and cable all you want. You will still end up paying more for less and have no recourse if you decide you don't like your provider.
People also neglect to mention that to get the high speed cable you need to "cut-the-cord" you need to buy those internet services from the very company you are claiming to have cut ties to. Always at a premium too. You want high speed internet only and no cable? I guarantee you they will charge you more than if you "bundled" your internet with a cable and phone package.
So unblundle your airline and cable all you want. You will still end up paying more for less and have no recourse if you decide you don't like your provider.
12
There are many locations that (in the last five years) have had AT&T open up parallel "cable" systems, but instead of being competitive, their prices are virtually identical - with the added downside that AT&T's DSL-based technology offers far slower broadband speeds. So having "competition" isn't always the silver bullet.
Not entirely true on both major points. I have 2 choices of cable company, 4 if you include satellite; Dish and DirecTV, 6 if you include FIOS; AT&T and Verizon. I actually have a 7th choice, Google Fiber which I'm eagerly waiting to have installed in the hopefully not too distant future. Granted there are many if not most areas don't have this kind of choice.
2nd cord cutters can cut ties with their "cable" company entirely. I did this when I cancelled my TimeWarner service and went with a wireless provider (Clear) for my internet service.
That said this "holy grail" of unbundled TV probably won't be all everyone is hoping for as the article suggests.
2nd cord cutters can cut ties with their "cable" company entirely. I did this when I cancelled my TimeWarner service and went with a wireless provider (Clear) for my internet service.
That said this "holy grail" of unbundled TV probably won't be all everyone is hoping for as the article suggests.
OK, I conceded that there are certain areas, a very limited number of areas, that have some choices. Most of us in the US do not have these alternatives. The best many have is to choose between broadband cable and phone DSL. DSL is fine if you want to check your email (or look at nytimes.com) but far too slow for any practical high speed packet delivery. None of the options you discuss are available at my home here, my family vacation home on the coast, my parents house in NY, my old home in CA, etc.
Satellite is an option for HD programming but does absolutely nothing for you if you want or need broadband access to internet subscriptions.
If you have Google fiber or Clear or even access to broadcast network HD channels your are the exception, not the norm. And at what cost can you cut the cord even if these options are available?
Satellite is an option for HD programming but does absolutely nothing for you if you want or need broadband access to internet subscriptions.
If you have Google fiber or Clear or even access to broadcast network HD channels your are the exception, not the norm. And at what cost can you cut the cord even if these options are available?
In early cable days, one of the perks - and attractions - was content without commercials. At least you got something in return for paying for cable: no ads! Not anymore, of course. A few years ago, I was thoroughly amused when I saw commercials on cable TV at a friend's home (I don't subscribe)! Seriously? Now people pay for cable AND have to watch ads? We sheep continue on with the entertainment drip..
5
Running ads on cable was pioneered here in Australia by Murdoch's Foxtel service. Americans couldn't believe it! Pay for ads??!!??
No antenna. No cable. Just the internet & borrowing DVDs from the local library. I read up on things here at NYT etc so I can converse on the inanities of Game of thrones or whatever. I don't miss TV at all.
No antenna. No cable. Just the internet & borrowing DVDs from the local library. I read up on things here at NYT etc so I can converse on the inanities of Game of thrones or whatever. I don't miss TV at all.
It's marketing 101. Give companies a chance to charge for more things, and they'll generate more revenue by charging consumers more. The problem is, not enough people in Government really understand how business works, so companies are always several steps ahead of their regulators.
3
Maybe the disintegration of the cable industry will encourage more people to go outside and play, throw a frisbee, go for a walk, and not sit through a three hour MASH marathon. Although I do love MASH.
8
M*A*S*H airs for an hour every weeknight on MeTV, a channel that is carried for free on broadcast multicast channels across the US. See http://metvnetwork.com/ for the channel in your town. Hope this helps -
1
This is a ridiculous comparison. I can do without any particular channel on cable. But if I'm going to fly, I must have space for my legs and enough room that my body won't get muscle cramps for the duration of the flight. If it's a long flight, I'll need some food. I'm likely to need to bring a bag along. Airline "unbundling" was really about finding new revenue streams. Cable's resistance to unbundling is merely about preserving a monopsony position as long as possible.
17
Right on and they will keep ripping us off until the gov steps in, although with a GOP House and Senate I doubt it.
1
It's not the food, pilllow, or any video/movie fees that bother me. It's the baggage fee. People generally use airplanes to travel long distances and stay overnight. It's a given for most that some kind of luggage is required. Paying a fee is like asking people in a restaurant to pay a separate fee for a table or chair. Luggage should be free, with due consideration for space and safety Having to strategize my packing so as to pay the least for luggage adds to the unpleasantness of any domestic trip I take.
27
Agreed - this is also the one ala carte item in airline travel, for which the extra charge incentivizes bad behavior regarding carryons, and that impacts other travelelrs.
But still, that's not a fundamental problem. The term a la carte after all comes from restaurant menus, and that certainly has a reasonable model which includes a table and chairs.
But still, that's not a fundamental problem. The term a la carte after all comes from restaurant menus, and that certainly has a reasonable model which includes a table and chairs.
2
Of course the airline's argument would be that you are only paying an additional amount to cover the cost of the additional service you are using. The argument they do not like to hear is that there are so many things that are not allowed in carry-on (like deodorant, perfume, toothpaste, wine, liquids, etc). Therefor either you pay the baggage fee, buy replacements when you get o your destination or go without. The airlines get to blame this bonus on 9-11. No one is saying the obvious thing - that people need not be forced to pay extra for a service that is integral to travel.
Personally, I believe the liquid restriction are bogus and an over-reaction to poor security screening procedures. There has been talk for years about the ineffectiveness of the liquid restriction, but there is little incentive to change from the two players that stand to profit the most from them - the airlines with baggage fees and TSA and its ever-bloating infrastructure.
Personally, I believe the liquid restriction are bogus and an over-reaction to poor security screening procedures. There has been talk for years about the ineffectiveness of the liquid restriction, but there is little incentive to change from the two players that stand to profit the most from them - the airlines with baggage fees and TSA and its ever-bloating infrastructure.
1
On the other hand, consider that there are many many people who perfectly well manage even a week's business trip with what they can pack in a legal sized carryon. It's not so obvious on second thought that checking luggage is forcing people to pay for an essential part of the travel.
Anytime you have the utility model in place, such as electrical or cable services, you will find a gradual climb up in price. Of course, once entertainment goes to an a la carte system, the price of the individual constituents of the customer's package will be higher. Of course, the customer's service will get worse.
Welcome to capitalism.
The real trick, however, is figuring out how to finally kill the cable companies. This appears to be impossible, because they are morphing their businesses and they have a lot of money (from decades of monopoly advantage) to meet and raise the barriers to entry.
So many cord cutters hail Hulu as a viable alternative to cable. However, Hulu is owned by the Time-Warner-Comcast conglomerate. So even when you think you're winning, you're actually losing. You're paying more for less and you're getting a worse product on top of it.
Welcome to capitalism.
The real trick, however, is figuring out how to finally kill the cable companies. This appears to be impossible, because they are morphing their businesses and they have a lot of money (from decades of monopoly advantage) to meet and raise the barriers to entry.
So many cord cutters hail Hulu as a viable alternative to cable. However, Hulu is owned by the Time-Warner-Comcast conglomerate. So even when you think you're winning, you're actually losing. You're paying more for less and you're getting a worse product on top of it.
7
Dear cable industry - I'm a "red-blooded" American, but I couldn't care less about so-called "professional" sports. So I don't need any of that. There are a lot of people who feel the same way. Also, I have no interest in the multiple MTV channels. Two of the highest cost program packages you supply.
I used to watch "news" channels but now they are mostly opinion and other garbage (CNN's "Headline News" - you must be kidding now, change the name.) Also, with the addressable digital converter boxes you have had for years now, you could also bill for short term access, per the author's example, to the Hallmark Channel for the MASH marathon. You've been getting away with these bloated & overpriced packages for years or decades. Remember that one of the promised benefits in the early years of cable was "no commercials." The vast majority, if not almost all, of the non-pay channels have had commercials for years or decades. The best of both worlds for you. I have over the air tv and one of the few things I miss is C-SPAN and local access. Ha ha.
I used to watch "news" channels but now they are mostly opinion and other garbage (CNN's "Headline News" - you must be kidding now, change the name.) Also, with the addressable digital converter boxes you have had for years now, you could also bill for short term access, per the author's example, to the Hallmark Channel for the MASH marathon. You've been getting away with these bloated & overpriced packages for years or decades. Remember that one of the promised benefits in the early years of cable was "no commercials." The vast majority, if not almost all, of the non-pay channels have had commercials for years or decades. The best of both worlds for you. I have over the air tv and one of the few things I miss is C-SPAN and local access. Ha ha.
5
I am always amused when I read that people think that the cable companies, Comcast, Time Warner et.al., are the ones perpetuating the bundle. Video or Cable TV, which used to be the cornerstone of the Cable industry, is it's least profitable product today. The bundle is a contractual requirement of the programmers, Disney/ABC, Viacom etc. where they require that their distributors carry most or all of their products. No cable operator in their right mind would carry all of the 75-100 channels they do today, at a cost of $30-$45/month, just to offer a marginally profitable business.
comcast/nbc/universal owns a lot of cable channels
Sorry but I am all for unbundling as it forces those that want more channels to pay for them. I watch on average about six channels but must pay for channels I never watch. I think that the unbundling would also witness the demise of certain cable channels that are just endless advertisements and or have poor quality programingI would only be too happy to see all of the "shopping channels" disappear from my screen along with the many questionable offerings.
2
It's important to remember that the airlines 'unbundled' services not because they were foisting unwanted services on the consumer (hey, who wants to check a bag anyway) but to make more money. Cable channels are in a different ballpark. They are competing or eyeballs to support advertising revenues. As such, unbundling will most likely bring about price competition if not outright free offers.
3
I am always amused when I read that people think that the cable companies, Comcast, Time Warner et.al., are the ones perpetuating the bundle. Video or Cable TV, which used to be the cornerstone of the Cable industry, is it's least profitable product today. The bundle is a contractual requirement of the programmers, Disney/ABC, Viacom etc. where they require that their distributors carry most or all of their products. No cable operator in their right mind would carry all of the 75-100 channels they do today, at a cost of $30-$45/month, just to offer a marginally profitable business.
3
Consumer satisfaction is down 4.2% since 1994! Is that all? And the margin of error for a consumer survey is ? (maybe 2.0%). Two possibilities here. Either the consumer satisfaction surveys cited here do not accurately gauge consumer satisfaction or customer satisfaction is down so little as to be meaningless.
3
The airlines simply/drastically took advantage of flight restrictions post 911 and overhauled their whole pricing structure right under our noses. This is all the same issue of American corporations ripping off the American people in classic A Moralistic Style.
3
I find Sling, Netflix and Amazon Prime TV/video services appealing, but you bring up a good point: Unbundling can be just as bad as bundling. Regardless of the approach, the problem comes when consumers are treated as marks. Enough already with the upselling, the "rewards" that I won't really wind up using, the cramming and slamming, the nickel and diming, the surprise fees, the baiting and switching, and so on. I find myself going out of my way to patronize businesses that don't leave me feeling like I have to watch my back constantly.
3
Consumers are marks. Gullible easy marks.
Yes! I constantly find myself thinking that what I really want is a list of companies that aren't into deals-coupons-rewards-say-the-magic-word-bait-and-switch-join-our-club-redline-clearance-scams. I just want to walk into a store and pay a reasonable price, the price that everyone else pays, the price that is marked, the price that is always the price unless there is a good reason to discount (e.g., nobody wanted that ugly sweater; the milk will go bad in two days). Please, if anyone knows where such a list exists, let me know! #stopthecoupons
New York Times has pricing options for their subscriptions and all vary from pricing, delivery days, digital subscriptions (not)included; and why is the digital subscription more expensive than the home delivery? Why is the digital subscription free with home delivery but more expensive without home delivery. Digital supposed to save on cost because it removes the delivery-printing-etc. factor...kinda hypocritical Times.
8
I like cable
1
I think the parallel is a fair one considering how expensive it is to run an airline and the previous difficulties related to operating a broadcasting network. This being said, both broadcasters and airlines are profitable now. Ryanair is an incredibly profitable business and has fares that start at a couple of bucks. Would they charge you to use the bathroom if they could? Most certainly, but if you jump through all of the hoops you get the lowest price possible. It's no different than the person that devotes hours to couponing or searching the internet for the best vacation deal.
I've been flying since the mid-70s and love a la carte; no point in paying to subsidize meals I don't want or baggage I don't carry. And I'm happy to pay for premium seating which reduces the change of sitting near young kids and other disruptive elements.
Truly fair pricing would charge by the pound. Why should I, a petite woman traveling light for a weekend (say, 125 pounds total for me and my purse plus underseat tote bag) pay the same airfare as a 180-pound woman with a lap baby, gate-checked (for free) stroller, diaper bag, purse, carryon, suitcase in the baggage hold and so on. Her overall burden to the aircraft is likely around 240 pounds or double mine. Why are we paying the same price for our seats?
Same with cable, except the sports fans are the obese/overly laden passengers and we who never view sports are the light-footprint consumers who constantly subsidize them and the teams to which they are in thrall.
Just got my Roku and Amazon fire stick and will be cutting the cord at the end of the month. Big sports will have to limp along without my contribution.
Truly fair pricing would charge by the pound. Why should I, a petite woman traveling light for a weekend (say, 125 pounds total for me and my purse plus underseat tote bag) pay the same airfare as a 180-pound woman with a lap baby, gate-checked (for free) stroller, diaper bag, purse, carryon, suitcase in the baggage hold and so on. Her overall burden to the aircraft is likely around 240 pounds or double mine. Why are we paying the same price for our seats?
Same with cable, except the sports fans are the obese/overly laden passengers and we who never view sports are the light-footprint consumers who constantly subsidize them and the teams to which they are in thrall.
Just got my Roku and Amazon fire stick and will be cutting the cord at the end of the month. Big sports will have to limp along without my contribution.
4
To understand what's driving the immiseration of airline passengers, everyone needs to read Tim Wu's article from The New Yorker, "Why Airlines Want to Make You Suffer".
http://www.newyorker.com/contributors/tim-wu/all
http://www.newyorker.com/contributors/tim-wu/all
1
I can't wait for the airlines to offer upgrade options on the flight attendants. I will surely pay a couple of extra dollars for ominous-free, respectful-courteous flight attendants that don't make me feel like I'm a burden on the flight.
1
I can't think that we need to have as many as we do. To push that aisle-clogging beverage cart around?
1
I haven't had cable TV in years. I did not want Fox's hate and bigotry in my home nor was I interested in paying for ESPN but Comcast was too rigid to accommodate me. Now I have ROKU, Netflix, Amazon and my computer, IPad and IPhone. The only things I would like to be able to watch on TV are HBO when "Game of Thrones" returns, MSNBC and Comedy Central, and International Mystery.
We should be able to choose our own menu and pay accordingly.
We should be able to choose our own menu and pay accordingly.
You can watch International Mystery on your Roku. It's a free channel, and Amazon gets most of the HBO programming eventually.
I got tired of paying over $100 dollars for satellite and internet. So I dumped my Dish and bought an antenna, added Netflix. More than enough good content to watch. And the over the air HD is far superior to the more
compressed satellite/cable version.
compressed satellite/cable version.
2
Our cable cord was cut when the "promotional" expired, and they would not renew it for a second time, despite Customer Service Roulette. We hung on a few more months, but the act that caused the scissors to come out was a $5.00 per month "Sports Fee". Now, this is a household that does not watch anything but the SuperBowl, and often not even that....
Another round of CSR revealed that we couldn't drop that fee, or the sports channels that it carries.....this was the second holdup, the first was when the cable co encrypted all the signals, so you could no longer use the bedroom TV or office TV without a "box", for signals you were paying for. (Great business model that. Sell them content, then scramble it, and force them to rent a box to unscramble it)
We have an antenna and a Tivo. This allows pretty much everything we want, along with Netflix and Hulu. Literally, we are missing nothing.
There are a few "free" DVRs out there as well, but even paying for all the other services, it is still a better deal. If you aren't shy, you can find online pretty much anything illegally, but I prefer to pay the content providers...just not at gunpoint.
If you have the ability to put up an antenna, you should.
Another round of CSR revealed that we couldn't drop that fee, or the sports channels that it carries.....this was the second holdup, the first was when the cable co encrypted all the signals, so you could no longer use the bedroom TV or office TV without a "box", for signals you were paying for. (Great business model that. Sell them content, then scramble it, and force them to rent a box to unscramble it)
We have an antenna and a Tivo. This allows pretty much everything we want, along with Netflix and Hulu. Literally, we are missing nothing.
There are a few "free" DVRs out there as well, but even paying for all the other services, it is still a better deal. If you aren't shy, you can find online pretty much anything illegally, but I prefer to pay the content providers...just not at gunpoint.
If you have the ability to put up an antenna, you should.
4
The analogy is off target.
Compare a full package of airline ticket and frills today - ticket, checked bag, meal, extra leg room - against the cost of a bundled ticket circa, say, 1990, and remember to do it in constant dollars. Today's full package is less.
With bundling airlines 'wasted' money providing services that travellers valued at less than the cost of providing them. Unbundling cuts that wastage, and the savings are applied across the board to other services.
Compare a full package of airline ticket and frills today - ticket, checked bag, meal, extra leg room - against the cost of a bundled ticket circa, say, 1990, and remember to do it in constant dollars. Today's full package is less.
With bundling airlines 'wasted' money providing services that travellers valued at less than the cost of providing them. Unbundling cuts that wastage, and the savings are applied across the board to other services.
2
As a Cablevision (NJ) customer - I am extremely happy with the way they bundle services. I have internet and television though them. As perks - I also get the free wifi which is pretty much everywhere along with free McAfee for my PCs. I would be absolutely loathe to have to assemble an a la carte package. If I were to compare my Cablevision service to an airline - it's pretty much like flying Pan American First Class in 1967. I do not want it to turn in to PeopleExpress circa 1980.
I flew People's Express in early '80's - red-eye from Newark NJ to Tampa Fl for $40 ! no problem. slept on 3 seats across.
1
Capitalism at its finest. It is amazing to me how much Americans are willing to endure to save a buck. Flying used to be a pleasurable experience. Now it is less fun that a cross-country bus trip. My hope? Bring back trains!
5
I'm wondering how this will all ultimately impact smaller cable channels and whether they'll be able to stay in business.
this is a bit of a misnomer. There are very few "small" cable channels today - the conglomerates own the vast majority. And for a truly small audience, niche interest channel, streaming off their website is the way to go - free or behind a pay wall.
1
What Neil misses is that airline travel has DOUBLED in two decades. Unbundling works - it makes it much cheaper for people to travel if that's all they want. Flyers can't expect the same level of service that they had in the early 90s for bare bones prices. If, as a flyer, you want better service, it's easy - pay for it! The 4.2% drop in satisfaction is actually quite small of a price to pay for a DOUBLING of air travel. Furthermore, I'd love to see the stats broken down for customer satisfaction in economy flyers in 1994 vs. premium economy flyers in 2015 because that is a more apple-apples comparison than comparing the more premium product in 1994 vs. today's budget product.
Ultimately, the numbers show that price discrimination has worked wonderfully in the airline industry. If you want value service and free drinks, you can always pay for business class. If you don't, then you've got a great cheap flight.
The same applies to TV. If the author wants to watch a M*A*S*H marathon, he can do so easily on Amazon Prime/ Netflix as opposed to spreading the cost of the show across the millions of subscribers who will never watch it.
Ultimately, the numbers show that price discrimination has worked wonderfully in the airline industry. If you want value service and free drinks, you can always pay for business class. If you don't, then you've got a great cheap flight.
The same applies to TV. If the author wants to watch a M*A*S*H marathon, he can do so easily on Amazon Prime/ Netflix as opposed to spreading the cost of the show across the millions of subscribers who will never watch it.
Interesting comparison, but it's flawed.
If I want to fly, I have to fly in a plane. I can’t fly my own plane, or strap wings to my back and jump from the Palisades hoping for the best. Well, I could, but neither of those scenarios would lead to me getting to my destination safely and quickly. Neither would driving. I need an airport, an airline, a pilot, and (I guess) a flight attendant.
If I want to watch TV, I can hook up a $9 antenna and watch crystal clear HD television. Add a Roku with Hulu Plus, and all of a sudden my possibilities have grown. Add a library card, and I’ve got almost any movie I could want. All avenues lead me to a satisfying viewing experience, if I’m willing to take the plunge (which, in our case, we have, and we love this exact scenario).
A la carte likely will turn out to be more expensive, which is why they bundle channels in the first place. But the consumer no longer needs the go-between of a cable box or satellite dish to get the programming they desire.
I applaud Dish for making the attempt to keep pace with a changing market, and I’m curious to see how other providers (Comcast, Verizon) adjust their strategies.
Remember print newspapers? Landline telephones? The music industry? All valuable case studies for the cable and satellite providers.
If I want to fly, I have to fly in a plane. I can’t fly my own plane, or strap wings to my back and jump from the Palisades hoping for the best. Well, I could, but neither of those scenarios would lead to me getting to my destination safely and quickly. Neither would driving. I need an airport, an airline, a pilot, and (I guess) a flight attendant.
If I want to watch TV, I can hook up a $9 antenna and watch crystal clear HD television. Add a Roku with Hulu Plus, and all of a sudden my possibilities have grown. Add a library card, and I’ve got almost any movie I could want. All avenues lead me to a satisfying viewing experience, if I’m willing to take the plunge (which, in our case, we have, and we love this exact scenario).
A la carte likely will turn out to be more expensive, which is why they bundle channels in the first place. But the consumer no longer needs the go-between of a cable box or satellite dish to get the programming they desire.
I applaud Dish for making the attempt to keep pace with a changing market, and I’m curious to see how other providers (Comcast, Verizon) adjust their strategies.
Remember print newspapers? Landline telephones? The music industry? All valuable case studies for the cable and satellite providers.
4
This is news? Unbundling means less cost to consumer and consequently less profit for provider. But provider is a monopoly, so provider can make up lost profits by raising overall cost of unbundled items. Where's the news here?
1
in many places it's a duopoly - cable co. and phone co. tv - not much better than a monopoly. We would 3 or more co's in an area to get true price and service competition.
Video carriers (satellite, cable) have little in common with airlines. Unless you are willing to waste your life watching TV, there is more available to watch free or cheap than you can use. I ditched cable for an attic antenna that drives 4 TV's plus online TV sources that stream to our TV's. No one needs cable, although they might want it. When I need to fly, I need to fly.
2
Every aspect of the airline industry is heavily regulated except the amount of money the companies are allowed to make in profits and how little of that profit they give to their employees (often outsourced) in the form of pay (typically low). It is a business model designed to heap money on the CEO's & occasionally shareholders and is very successful at doing what is intended. No wonder other industries have climbed about the nickle & dime the your paying customers into profits. Does nothing for customer service & employee moral.
The airlines should be re regulated back to the fee structure from the 1960's. But that will never happen.
The airlines should be re regulated back to the fee structure from the 1960's. But that will never happen.
1
Maybe with all the money she saves, Molly Wood can afford to buy some new dry erase markers.
Yes, no longer being forced to pay for Fox News is worth it!
2
Cable companies make a fortune from charging us exorbitant fees of channels we never asked for (90% of them), while denying us channels we liked (HBO,Showtime, Sports) and removed from us a while back...unless we pay extra for their return. All we ask is for some justice, some equitable return; and as much as we enjoy the entertainment, we could do without if pushed too hard, while these companies depend on us for the bottom line. Lets be fair, O.K.?
Bring on the unbundling. First to go was the cable bill, then the satellite bill along with the unremarkable fixture on the roof. We have received letter upon letter from these companies offering good deals to re-instate our service. No thanks. I enjoy the notion of not having to fork over the money every month. As far as the connection to airline fares...I find the comparison very weak as new business models will arise to challenge whichever new product or service arises. If I only want 10 channels with HBO included, I don't mind paying for it. If I'm flying from Los Angeles to Brisbane, AUS I will pay a little extra for the room...12 1/2 hours is a long long time in a narrow economy seat. Gone are the days my parents flew on the PANAM seaplanes...ah, the Golden Age they use to say along with 4 channels of B&W TV.
1
The cable company mainly sells channels in bundles because the cable company is forced to buy channels in bundles.
Blame Viacom, Disney, and Turner. That's where the bundles come from. The MSOs would love to sell a la carte because then they could drop poorly viewed channels from content providers that have "must carry" channels.
Blame Viacom, Disney, and Turner. That's where the bundles come from. The MSOs would love to sell a la carte because then they could drop poorly viewed channels from content providers that have "must carry" channels.
uh, the cable companies own most of the channels now.
Our household has Netflix, Amazon and a Dish satellite package. The first two, which account for half our watching hours, cost $100 a year each. The satellite package is $100 a month, and by including HBO gives us HBO-GO's internet service, which accounts for another 15% of our viewing, as it's more convenient and higher quality streamed than DVR'd.
A large part of our Dish bill pays for ESPN, which we watch for no more than a few hours a year, and Fox News, currently in dispute with Dish and we hope they don't get it back. Thing is, there's no way it's worth $1200 compared to the $200 to Netflix and Amazon. If someone came out with a $50-a-month set of internet options to cover the parts of the cable/satellite spectrum we actually have any use for, we'd turn off the satellite receiver tomorrow.
A large part of our Dish bill pays for ESPN, which we watch for no more than a few hours a year, and Fox News, currently in dispute with Dish and we hope they don't get it back. Thing is, there's no way it's worth $1200 compared to the $200 to Netflix and Amazon. If someone came out with a $50-a-month set of internet options to cover the parts of the cable/satellite spectrum we actually have any use for, we'd turn off the satellite receiver tomorrow.
1
I do not believe this is a case of "unbundling," but rather of price gouging. Hospitals have also been doing this for years. For example, one doesn't merely pay for a hospital room. You must pay a daily rate to rent nearly every piece of furniture and equipment in it. Lawyers charge this way as well. I remember being charged for the time it took to prepare the bill! I am a music teacher. As it is, I charge a certain amount for a lesson. If I were to charge the way hospitals, airlines, lawyers, and TV cable providers do, I would charge for the rental of the lesson room, rental for the music stand, rental for the chair, my basic hourly rate, plus an additional fee for my analysis of the problems. Oh, and let's not forget an "environmental fee" for whatever I feel has impacted the environment! Yes, I could make a pretty healthy profit on that kind of fee schedule...if I had no competition and my services were in that much demand. No, this is price gouging, plain and simple. The airline industry does it, hospitals do it, and yes...more to the point...the cable TV industry does it. I used to be under the impression that price gouging was illegal, but apparently I am wrong.
3
Interesting. As you say, you could get away with this kind of fee schedule . . . "if you had no competition."
The industries (aviation, cable, hospitals, etc.) that get away with this price gouging have very little or no competition.
The industries (aviation, cable, hospitals, etc.) that get away with this price gouging have very little or no competition.
1
I've seen a few analysts and columnists assuming that unbundling is the reason satisfaction with airlines is down. Is there any evidence to back up that this isn't just correlation? I suspect the unbundling has just coincided with a general reduction in quality.
For example, I flew Spirit airlines the other day. At first, I was thrilled to spend $100 less than another airline in exchange for spending an extra 15 minutes to think about how we could fit our stuff into fewer bags. What drove my satisfaction into the ground, however, is that our luggage (along with that of half of the plane) arrived 48 hours late, because they just didn't have room for it. They took our money with absolutely no intention of providing the service we'd paid for.
To apply that to the cable industry, I don't think people are angry at Time Warner when they have to pay extra for HBO as much as they're angry when their internet connection dies for no good reason while they're in the middle of something.
For example, I flew Spirit airlines the other day. At first, I was thrilled to spend $100 less than another airline in exchange for spending an extra 15 minutes to think about how we could fit our stuff into fewer bags. What drove my satisfaction into the ground, however, is that our luggage (along with that of half of the plane) arrived 48 hours late, because they just didn't have room for it. They took our money with absolutely no intention of providing the service we'd paid for.
To apply that to the cable industry, I don't think people are angry at Time Warner when they have to pay extra for HBO as much as they're angry when their internet connection dies for no good reason while they're in the middle of something.
1
Author misses the key point by mixing metaphors. Airplanes are the fastest, most convenient way to get from point A to point B. But imagine that we had a StarTrek-ish Transporter. Would anyone still want to travel by airplane? Sure, some will, just as value conscious consumers in the 1950s/1960s traveled by train rather than using the Airlines.
Today's streaming video is the equivalent of a Transporter--you can go where you want to go when you want to. Not when the train is scheduled form station A to station B.
Today's streaming video is the equivalent of a Transporter--you can go where you want to go when you want to. Not when the train is scheduled form station A to station B.
1
The difference is I can live without getting on an airplane, but I cannot live without ESPN, MLB Network and Golf Channel.
you're comparing a subscription model to model where people pay a one time fee. this is a bit apples and oranges. airlines are always rewarding customers that come back with elite status and FF miles. cable companies don't reward anyone and after a year they usually take back those cheap prices that you get for initially signing.
1
Yet more whining about airlines. Americans want it cheap, the airlines give them that option. And then Americans complain. I just completed a round trip coast to coast trip. $380. I brought my own food. I didn't pay any checked luggage fee because I used United Airlines credit card to pay for the ticket. The $380 is worth 380 miles toward my next flight. As is the roughly 5,000 miles credit to my frequent flier account. So I'm 20% of the way towards a fee flight. Worth maybe $76. AND passengers, flight attendants, TSA, everyone I met was perfectly friendly.
Bring on cable al carte! It may cost more for some. But at least I won't be subsidizing heavy users. Which frees up money for me to donate to my favorite charity so that I can subsidize those who I think deserve it.
Bring on cable al carte! It may cost more for some. But at least I won't be subsidizing heavy users. Which frees up money for me to donate to my favorite charity so that I can subsidize those who I think deserve it.
1
At my home I have the choice between cable, satellite, digital terrestrial, and internet based television (fibre optic which is in my home or ADSL).
I have 2 parabolic dishes getting 'free-to-air' stations from all over Europe, and subscribe to the Norwegian digital terrestrial system with the basic channels and 6 freely chosen premium ones.
We have chosen to add Netflix to this and can rent on-demand via either our hybrid internet-terrestrial receiver or any number of internet services through Chromecast. We have 25 mbps internet service over fibre to the house.
I pay less than $45 per month for TV services and am quite happy that I can watch almost anything that I wish 'on demand'.
Not only do you get to watch what you want for the price that you want, but you get to watch it when you have time to do so and in most cases 'pause' at any time.
I don't bother with a PVR as almost everything we watch is via the internet and served on-demand commercial free.
I have also 'un-bundled' our ip-phone, internet and TV, to achieve the best service at the lowest cost. With a total cost including all long distance charges (we have none), of less than $120 per month. In a high cost country like Norway, this is not a burden.
I can only assume that higher levels of choice would make American residents happier with their telecommunications and entertainment.
I have 2 parabolic dishes getting 'free-to-air' stations from all over Europe, and subscribe to the Norwegian digital terrestrial system with the basic channels and 6 freely chosen premium ones.
We have chosen to add Netflix to this and can rent on-demand via either our hybrid internet-terrestrial receiver or any number of internet services through Chromecast. We have 25 mbps internet service over fibre to the house.
I pay less than $45 per month for TV services and am quite happy that I can watch almost anything that I wish 'on demand'.
Not only do you get to watch what you want for the price that you want, but you get to watch it when you have time to do so and in most cases 'pause' at any time.
I don't bother with a PVR as almost everything we watch is via the internet and served on-demand commercial free.
I have also 'un-bundled' our ip-phone, internet and TV, to achieve the best service at the lowest cost. With a total cost including all long distance charges (we have none), of less than $120 per month. In a high cost country like Norway, this is not a burden.
I can only assume that higher levels of choice would make American residents happier with their telecommunications and entertainment.
2
I think I'm willing to risk it in the unbundled cable world. Bring it on.
1
This totally misses the point. With out having to pay for a third party (the cable company), tv could be shown directly from the channel to the consumer for less. This could result in a situation like Netflix where you have no commercials for a fee or like the free version of Hulu where you watch commercials but don't pay an overhead fee. I see a future where you can stream channels for free with commercials.
Like everyone, I regret the decline in airline service, and some minimal regulation is obviously called for (but not forthcoming). However, only a fool would want to go back to the days when airline tickets cost, in inflation-adjusted dollars, far more than they do today. It is also true that for all the grumbling, few people take advantage of the economy seat upgrades, baggage, checking, and other optional services that the airlines offer. So it seems that price is more important. (I flew out regular economy recently, and came back deluxe economy because I'd had a medical procedure. that left me sore. So the market worked.)
Consider another example -- the AT&T monopoly of old. When you had to rent your phone and pay extra for a color, and a modem or fax was something only a newsroom could afford. I don't think many would want to go back to those days, either.
You also neglect to mention the almost complete absence of competition in the cable TV industry, which allows the cable companies to charge ridiculously bloated prices. A la carte pricing undercuts this since programs can be obtained from multiple sources, including over the Internet.
I've been doing my TV viewing a la carte for years now and there is no way in the world I'd want to go back. The only entities that will suffer here are the cable companies, the minor stations that nobody cares about, and the people who watch an inordinate amount of TV and are currently subsidized by everyone else.
Consider another example -- the AT&T monopoly of old. When you had to rent your phone and pay extra for a color, and a modem or fax was something only a newsroom could afford. I don't think many would want to go back to those days, either.
You also neglect to mention the almost complete absence of competition in the cable TV industry, which allows the cable companies to charge ridiculously bloated prices. A la carte pricing undercuts this since programs can be obtained from multiple sources, including over the Internet.
I've been doing my TV viewing a la carte for years now and there is no way in the world I'd want to go back. The only entities that will suffer here are the cable companies, the minor stations that nobody cares about, and the people who watch an inordinate amount of TV and are currently subsidized by everyone else.
Okay -- that all makes some resemblance of sense, but when the power goes out on your cable, you can pick up a book. When the power goes out on your flight, you may find yourself a little more concerned.
2
While deregulation has technically worked in the airline industry...ie..lower prices if you are willing to go off peak and incredible safety (if you don't count turning the industry into horrible cattle cars)...however..
Deregulation has been a horrible failure with telecom and cable.
The prices have sky rocked, you never know what you are paying till you get the bill and the customer service and technical aspects of the companies are horrid.
The industry should be re regulated at least for basic packages.
Deregulation has been a horrible failure with telecom and cable.
The prices have sky rocked, you never know what you are paying till you get the bill and the customer service and technical aspects of the companies are horrid.
The industry should be re regulated at least for basic packages.
1
I'm a little surprised that there's no mention of the networks' role in all of this bundling. For Example, NBC Universal is the "owner" of several channels - USA, Bravo, NBC, etc...
I enjoy a good Law & Order SVU marathon once in a while on USA, but have little use for The Real Housewives of wherever on Bravo. NBC, however, does have a lot of interest in cross promotion and getting me over to one of their channels.
AMC Networks includes AMC, Sundance, IFC & more.
ABC wants me to watch their Family Channel and their Disney channels
Viacom want me watching Nickelodeon, MTV & BET.
I enjoy a good Law & Order SVU marathon once in a while on USA, but have little use for The Real Housewives of wherever on Bravo. NBC, however, does have a lot of interest in cross promotion and getting me over to one of their channels.
AMC Networks includes AMC, Sundance, IFC & more.
ABC wants me to watch their Family Channel and their Disney channels
Viacom want me watching Nickelodeon, MTV & BET.
1
This article is complete false argument. Traveling is not idle entertainment. People fly because they have no other alternative other than driving, which can take days. That's not the same as watching a TV show. Watching TV is mostly just candy for the mind (except PBS). There are many ways to entertain ourselves. There are only two ways to travel, fly or drive.
I for one welcome unbundled streaming. Having cut the cord over 10 years ago, I have found that over the air HDTV broadcasts provide more than enough TV in my life. There may be one or two pay per view stations out there that I would be willing to buy for a few dollars a month, but there is no way I will cough up the money for a cable subscription for just one channel.
I for one welcome unbundled streaming. Having cut the cord over 10 years ago, I have found that over the air HDTV broadcasts provide more than enough TV in my life. There may be one or two pay per view stations out there that I would be willing to buy for a few dollars a month, but there is no way I will cough up the money for a cable subscription for just one channel.
1
Re air travel: charge people $25 for each carry-on. It's the carryon bags (not the crying babies) that are the worst thing about air travel. Some of those bags are large enough to transport a human being. Restrictions about carry-on bag size are rarely enforced.
Back to cable, I was paying a fortune just to watch TCM. After a move and multiple snafus to get me hooked up again, I said forget it and have been cable-free for years. With my rabbit-ears, I get the networks, PBS and multiple classic TV channels. .If TCM ever offers a subscription service, I'll sign up. If there were a complete Law and Order channel (original, SVU, and Criminal Intent) available on a stand-alone basis, I would definitely sign up for that too!!.
Back to cable, I was paying a fortune just to watch TCM. After a move and multiple snafus to get me hooked up again, I said forget it and have been cable-free for years. With my rabbit-ears, I get the networks, PBS and multiple classic TV channels. .If TCM ever offers a subscription service, I'll sign up. If there were a complete Law and Order channel (original, SVU, and Criminal Intent) available on a stand-alone basis, I would definitely sign up for that too!!.
Give me a break. Comcast is hated and reviled by their customers for their terrible customer service. I'll take the extra $10/month in my pocket any day of the week. These regulatory schemers always trying to bribe to write every law so they have the most favorable market and hacks like the author of this article are obviously paid industry representatives.
1
Am I the only one who doesn't think airline prices have come down? Maybe low-cost airlines have changed the air-travel landscape and introduced cheaper options, but I'm paying as much or more for my plane tickets on regular airlines as I ever have. What has changed is that now I also have to pay for what I used to get for "free." If anything, it seems like regular airlines have introduced new ways to charge more via nickle-and-dime-ing.
A large part of the disaffection for cable comes from the abysmal, abusive service that Comcast offers. That's why we left. That's why many people I know left. They wanted to charge us a $17 activation fee to move our cable box and TV to a live jack in our basement. I know the jack was live and talking to the mothership because when I moved it, the Comcast logo popped up. I told them if they charged me that fee to move my own cable box to another live jack in my own house, I would not only cancel my service, I would post on my 3000 person neighborhood listserve how to "cut the cord". I did just that, and many listserv members contacted me about how to set up a digital antenna and stream Netflix through their Wii.
We have never missed it.
We have never missed it.
4
I. Coach seats have never been roomy, although some are a bit less roomy now. The free meals were terrible, but you did get a small plastic cup of free soda occasionally. Adjusted prices are much lower now.
2. Streaming is not only less expensive, you can watch when you want and most streaming does not have ads.
So...if you want expensive flights to go with expensive cable, get a time machine and go back to 1989.
2. Streaming is not only less expensive, you can watch when you want and most streaming does not have ads.
So...if you want expensive flights to go with expensive cable, get a time machine and go back to 1989.
1
With jet fuel prices crashing, let's see how fast airlines pass that savings on to consumers. Let's see how long 'fuel surcharges' are still on peoples bills. My guess is that the gouging will continue as long as consumers are willing to get abused.
I am simply amazed people are still talking about this. The way the industry is going is absolutely good for consumers--if you are paying $100+ per month and getting 50+ channels, ask yourself this, do you really have that kind of time to watch all the stuff? I'd pare it down to essential channels to cut as much as possible out of this monthly rip off.
I have moved to OTA HDTV antenna ($40) + signal booster ($40) for the past 6+ years. Don't miss a thing of the silly thing they call programming. I get real news from PBS and NPR, and I splurge by adding $8 on Netflix streaming only and I am done with $8/month for TV related expenses. For most of the US population which lives along the coasts, this is a very viable alternative. Unless otherwise you want to watch a bunch of overpaid people bump into each other. If that's your thing, you have to pay $100+ a month. If I were you, I'd get season's tickets for the best seats in the house and get a far better experience.
I have moved to OTA HDTV antenna ($40) + signal booster ($40) for the past 6+ years. Don't miss a thing of the silly thing they call programming. I get real news from PBS and NPR, and I splurge by adding $8 on Netflix streaming only and I am done with $8/month for TV related expenses. For most of the US population which lives along the coasts, this is a very viable alternative. Unless otherwise you want to watch a bunch of overpaid people bump into each other. If that's your thing, you have to pay $100+ a month. If I were you, I'd get season's tickets for the best seats in the house and get a far better experience.
1
Who do we trust to tell us what we want? The politicians, to whom the communications industry contributes millions? The industry itself, which doesn't seem to be resisting unbundling strenuously and which we might assume would make greater profits if unbundled? The economists, who often can't see the forest for the trees?
Only two things concern me: will I be able to watch the channels I want, regardless of whether there are nuisance channels as well; and will my total bill (cell phone/landline/internet/cable) be more or less than it is now. I have a remarkable ability to scroll past the things I don't want, and even to tolerate YouTube ads when I can't skip them, if my reward is a program or clip I want to see.
The bottom line is, it's the bottom line that matters. So tell me, who (or whom) should I trust to tell me the truth about pricing?
Only two things concern me: will I be able to watch the channels I want, regardless of whether there are nuisance channels as well; and will my total bill (cell phone/landline/internet/cable) be more or less than it is now. I have a remarkable ability to scroll past the things I don't want, and even to tolerate YouTube ads when I can't skip them, if my reward is a program or clip I want to see.
The bottom line is, it's the bottom line that matters. So tell me, who (or whom) should I trust to tell me the truth about pricing?
People complain about Spirit Airlines, but they still fly them in droves. Paying less money does matter. It makes great media hype, but, adjusted for inflation, air fares are cheaper than they were years ago. Airline complaints have gone up 4% in a decade? I consider that pretty good considering that there are millions more flying, many more ways to dramatize and play up inconveniences (I waited 40 minutes for a gate! Oh the horror!) by tweeting, etc.
I paid $771 dollars for a 5 day rental of a car in Jackson Wyoming two weeks ago. It was because they knew they could get it. Thousands of corporations tag on fees for more options and cable isn't immune from it.
I paid $771 dollars for a 5 day rental of a car in Jackson Wyoming two weeks ago. It was because they knew they could get it. Thousands of corporations tag on fees for more options and cable isn't immune from it.
Unbundling, at least in the domestic airline industry, has hardly created lower fares. Between 1996 and 2014, calculated in constant dollars, average domestic fares are "down" by just $28. Or, about the fee to check a bag, which would have been included in 1996. When there are just a handful of carriers, consumer choice and better fares are theoretical only. Deregulating the airlines, whose promise was lower fares and more choice, just doesn't work. At least it doesn't as long as we allow nearly any merger or combination.
1
what happened with airlines was the result of significantly less competition as a result of mergers. continental, northwest, us air, these and other brands have all disappeared.
http://www.huffingtonpost.com/2013/06/20/airline-merger-competition-gao_...
the real problem with cable is not really bundling/unbundling but that there is generally very little competition, which is why the cable bills rise steadily. with more competition, i believe that companies would be forced to unbundle in ways that consumers would really appreciate. for example with streaming video there is no shortage of competitors and consumers have many options.
http://www.huffingtonpost.com/2013/06/20/airline-merger-competition-gao_...
the real problem with cable is not really bundling/unbundling but that there is generally very little competition, which is why the cable bills rise steadily. with more competition, i believe that companies would be forced to unbundle in ways that consumers would really appreciate. for example with streaming video there is no shortage of competitors and consumers have many options.
1
"Cable" is data. We already pay 2,3 or 4 times: smart phones, internet service, "cable" and, some of us, home phone. For this, a typical monthly bill, for what amounts to utilities in 2015, easily exceeds $200 in NYC and is probably closer to $250. (For some reason I've never understood, residents in many parts of the country pay significantly less for broadband and cable). Broadband without the "discount" of bundling television service is astronomically expensive.
I think most people are willing to take the risk of "incrementally more expensive" for actual choice in the matter. But it's not consumers forcing the issue. We've been fleeing from cable for years. It's content providers who want access to internet-only users again. A more robust hulu or netflix would make this conversation a non-entity.
And if sports fans want to pay $50/month for espn, yes, et al, we should absolutely give them that right. Stop making the rest of us subsidize expensive football, baseball and basketball.
I think most people are willing to take the risk of "incrementally more expensive" for actual choice in the matter. But it's not consumers forcing the issue. We've been fleeing from cable for years. It's content providers who want access to internet-only users again. A more robust hulu or netflix would make this conversation a non-entity.
And if sports fans want to pay $50/month for espn, yes, et al, we should absolutely give them that right. Stop making the rest of us subsidize expensive football, baseball and basketball.
3
If cable had any real competition, that would be one thing. The reality is that maybe there are two providers in an area with dish as a possibility if those choices are terrible.
The larger reality is that cable will follow network TV, wired telephones and the music industry and become obsolete due to their incompetence and greed. Why have cable if you have broadband? Nickeling and dimming their remaining customer base will accelerate the inevitable.
The larger reality is that cable will follow network TV, wired telephones and the music industry and become obsolete due to their incompetence and greed. Why have cable if you have broadband? Nickeling and dimming their remaining customer base will accelerate the inevitable.
2
I think the frustration to airline fees is twofold.
The first is loss aversion. Losing something you have--comfortable seat, adequate leg room, free food--is more painful than the opposite gain would be pleasurable. Thus gamblers will continue to gamble to try to get back to even, people will hold on to falling stocks to avoid selling at a loss, wages are downward sticky because cutting income is painful, etc. When it comes to comfort, we expect it to increase over time. Next year's car will have the same or better amenities than this year's model. With the airlines, the opposite is true, and people take the loss personally.
The second factor is what I think of as bait and switch, or perhaps more precisely asymmetric information. When I search for an airfare on line is appears I am buying a commodity: an airline seat. If Spirit is $25 cheaper than Jet Blue, I am likely to buy the Spirit ticket. Only after my purchase do I discover that there is a $10 fee to choose a seat next to the person I am travelling with, $25 and up to carry on a bag, 4 or more inches less leg room, and overcrowded departure gate with no seats, a non-reclining seat, no free snacks or drinks, no in-flight entertainment...so when everything is tallied up I have paid more for a lousy product. Until Expedia or Orbitz gives us enough information that we can actually compare flights on factors other than price, departure time, and arrival time there is a high likelihood that people will feel cheated.
The first is loss aversion. Losing something you have--comfortable seat, adequate leg room, free food--is more painful than the opposite gain would be pleasurable. Thus gamblers will continue to gamble to try to get back to even, people will hold on to falling stocks to avoid selling at a loss, wages are downward sticky because cutting income is painful, etc. When it comes to comfort, we expect it to increase over time. Next year's car will have the same or better amenities than this year's model. With the airlines, the opposite is true, and people take the loss personally.
The second factor is what I think of as bait and switch, or perhaps more precisely asymmetric information. When I search for an airfare on line is appears I am buying a commodity: an airline seat. If Spirit is $25 cheaper than Jet Blue, I am likely to buy the Spirit ticket. Only after my purchase do I discover that there is a $10 fee to choose a seat next to the person I am travelling with, $25 and up to carry on a bag, 4 or more inches less leg room, and overcrowded departure gate with no seats, a non-reclining seat, no free snacks or drinks, no in-flight entertainment...so when everything is tallied up I have paid more for a lousy product. Until Expedia or Orbitz gives us enough information that we can actually compare flights on factors other than price, departure time, and arrival time there is a high likelihood that people will feel cheated.
3
That is why it doesn't pay to be penny wise and pound foolish when booking airline tickets. Even if a certain airline costs $100 more (especially for international flights), I'll pay if it guarantees a better experience. That's why I prefer to fly foreign airlines overseas, even if they cost a bit more. The higher cost is just a fraction of what the entire trip costs.
2
Why do we need to pay anything at all for cable?
Perhaps 5 years ago, when visiting my in laws, I might have enjoyed watching an old movie on any number of cable stations. There were perhaps 2 minutes of commercials per 15 minutes of programming. You could actually enjoy the flow of the movie and not consider your time wasted.
I don't even bother now, and haven't for about 3 years. A movie now has 3-4 minutes of commercials out of every 10 minutes. The experience is unwatchable. I don't even bother channel surfing anymore. With this amount of advertising, why do I need to pay anything for cable?
I think the airlines charging fees for everything is a fine idea - the price aggregators are just a little behind on their pricing website updates. In addition to choosing a destination and dates, there need to be fields to choose whether you want a blanket, snacks, to check a bag, internet access, etc. Then the price is aggregated so it can be compared to other airlines. Ditto for hotels, car rental, etc. I'm surprised these fields have not yet been incorporated.
On an unrelated note, I figure I've saved $25,000 over my working life to date by not having cable. You can live without it, too!
Perhaps 5 years ago, when visiting my in laws, I might have enjoyed watching an old movie on any number of cable stations. There were perhaps 2 minutes of commercials per 15 minutes of programming. You could actually enjoy the flow of the movie and not consider your time wasted.
I don't even bother now, and haven't for about 3 years. A movie now has 3-4 minutes of commercials out of every 10 minutes. The experience is unwatchable. I don't even bother channel surfing anymore. With this amount of advertising, why do I need to pay anything for cable?
I think the airlines charging fees for everything is a fine idea - the price aggregators are just a little behind on their pricing website updates. In addition to choosing a destination and dates, there need to be fields to choose whether you want a blanket, snacks, to check a bag, internet access, etc. Then the price is aggregated so it can be compared to other airlines. Ditto for hotels, car rental, etc. I'm surprised these fields have not yet been incorporated.
On an unrelated note, I figure I've saved $25,000 over my working life to date by not having cable. You can live without it, too!
6
I think there is a mistake in this article. I think what they really mean is not satisfaction is down 4.2% since 1994, but it's at 4.2% overall.
If that's not the case, not enough people are flying. It's appalling out there and the airlines should be embarrassed by their shoddy service.
If that's not the case, not enough people are flying. It's appalling out there and the airlines should be embarrassed by their shoddy service.
5
This article is paternalistic. "To relieve the stress I have to go through to decide what benefits I want, let's fix it by bundling everything together." Forcing people to pay for unnecessary services is never justified unless the cost would literally be lower to do so than not (for instance, if there was such a steep drop in demand). Otherwise it is fairer to those under financial constraint to be able to make do with less.
1
Zachary, no offense, but you are not a normal person. No normal person would think it was an improvement to have to pay over and over in bits and dribbles.
Healthcare is a pretty good example of where services should be more bundled.
1
Cable companies do offer different tiers of programming you can buy bundled.
On airlines your choice is (pulling numbers out of thin air) $500 for economy or $2000 for first class. Per traveler.
I'd rather choose to be miserable and blame the airlines.
We need more choice in seating, and 4 more inches of legroom is not really more of a choice.
On airlines your choice is (pulling numbers out of thin air) $500 for economy or $2000 for first class. Per traveler.
I'd rather choose to be miserable and blame the airlines.
We need more choice in seating, and 4 more inches of legroom is not really more of a choice.
1
Having logged somewhere around 800,000 miles in the air, it is my contention that the belief that we are in a era of low fares for air travel is wrong, in whole or in major part.
To consider whether fares are lower, a complex calculation of "dollars then" versus "dollars now" has to be made. Few, if any, have done this.
On my first trip to Europe long ago, I brought an open ended excursion ticket, NY to London, with a completely open date for return. The cost was really low, but when converted to "today's dollars", the cost came out to almost the same as a currently priced RT economy ticket. What's more, those excursion fares aren't available any more. To get an open return, one would have to buy a refundable fare, which would cost at least double the fare equivalent to what I paid back then. Options have been removed or priced much higher. The airlines require the low fare customer to wear a straightjacket.
What is sorely lacking in our society today is honest pricing. Everyone has jumped into the game of fees to juice their profits. Car rental companies advertise a daily cost, then add on "airport charges" and any other fee they can dream up. The same for hotels, always a leader in gauging customers.
How about a "we will treat you like a human being fee" for the airlines? A real innovation
Most people could actually have afforded to fly in the "old days" but the IDEA of discounted pricing encouraged those who THOUGHT they couldn't to fly.
Doug Terry
To consider whether fares are lower, a complex calculation of "dollars then" versus "dollars now" has to be made. Few, if any, have done this.
On my first trip to Europe long ago, I brought an open ended excursion ticket, NY to London, with a completely open date for return. The cost was really low, but when converted to "today's dollars", the cost came out to almost the same as a currently priced RT economy ticket. What's more, those excursion fares aren't available any more. To get an open return, one would have to buy a refundable fare, which would cost at least double the fare equivalent to what I paid back then. Options have been removed or priced much higher. The airlines require the low fare customer to wear a straightjacket.
What is sorely lacking in our society today is honest pricing. Everyone has jumped into the game of fees to juice their profits. Car rental companies advertise a daily cost, then add on "airport charges" and any other fee they can dream up. The same for hotels, always a leader in gauging customers.
How about a "we will treat you like a human being fee" for the airlines? A real innovation
Most people could actually have afforded to fly in the "old days" but the IDEA of discounted pricing encouraged those who THOUGHT they couldn't to fly.
Doug Terry
8
Nonsense.
When I was in college in 1981, I paid $300 to fly to Boston from Omaha, same today.
That would be only $111 in today's dollars.
When I was in college in 1981, I paid $300 to fly to Boston from Omaha, same today.
That would be only $111 in today's dollars.
I agree about the low airfares. I just paid 2700.00 for a ticket to London. While you're gasping and choking, I did not buy on Friday to travel Monday. I flew from Detroit. I didn't get anywhere near Business Class and in fact I couldn't even get into economy comfort because people had sucked them all up for their 10 year olds.
If that's a cheap airfare, I'll take the expensive one and be treated like a human.
If that's a cheap airfare, I'll take the expensive one and be treated like a human.
"But the combined effect of all these supplemental charges is to make air travel a grinding process in which a customer feels constantly assailed by upcharges and decisions that may not be stressful in isolation but make the experience unpleasant"
But the "upcharges" are only those because of expectations set by previous flying experiences. And I for one am glad I don't have to refuse a meal I've paid for, because I ate on the last flight. And I can actually get that blanket now because, as there is a cost attached to it, we no longer see many people snatching up blankets "just in case" they might want one in the flight.
I don't see how cramped seating would have been any different if flying were not so a la carte - more people per flight is still more people per flight however the cost is structured. Same with how flights are now almost all full.
Really, the main hassle with air travel now is security-related and cost related in ways not related to unbundling.
Cable, unlike airlines, have costs more set by their source clients, rather than the cost of providing the service to begin with. Fuel is fuel, training and experience is training and experience, capital outlays are just that - there is no heavy-swinger like ESPN to distort the price structure. And I really need that airplane, and that pilot, and that jet fuel, but really - I can do without ESPN.
But the "upcharges" are only those because of expectations set by previous flying experiences. And I for one am glad I don't have to refuse a meal I've paid for, because I ate on the last flight. And I can actually get that blanket now because, as there is a cost attached to it, we no longer see many people snatching up blankets "just in case" they might want one in the flight.
I don't see how cramped seating would have been any different if flying were not so a la carte - more people per flight is still more people per flight however the cost is structured. Same with how flights are now almost all full.
Really, the main hassle with air travel now is security-related and cost related in ways not related to unbundling.
Cable, unlike airlines, have costs more set by their source clients, rather than the cost of providing the service to begin with. Fuel is fuel, training and experience is training and experience, capital outlays are just that - there is no heavy-swinger like ESPN to distort the price structure. And I really need that airplane, and that pilot, and that jet fuel, but really - I can do without ESPN.
3
The alleged analysis that says unbundled fees for a subset of channels will be slightly more is puzzling. Were those studies funded by the industry?
Unless lots of channels are without cost to the cable or satellite provider, why would it not cost us less to eliminate dozens? That issue is not covered in this piece. We understand that some like ESPN are costly, but are many free?
Unless lots of channels are without cost to the cable or satellite provider, why would it not cost us less to eliminate dozens? That issue is not covered in this piece. We understand that some like ESPN are costly, but are many free?
5
Almost every channel has its hand in your wallet to some extent. These "license fees" range from a few pennies a month to several dollars in the case of the ESPNiverse. Even the broadcast stations are getting into the act, with what they call retransmission fees.
Wouldn't it be nice to know the exact amount for each channel in your lineup?
Wouldn't it be nice to know the exact amount for each channel in your lineup?
I disagree. The value provided by airline companies is completely different from the value provided by cable companies.
Value drivers for an airline company, as you mention, span multiple dimensions -- cost, comfort, quality of service, perks (food/drink), baggage limitations, destinations, etc. This means airlines can position themselves to address any combination of these dimensions, and the consumer benefits by having options.
We can fly Spirit or Southwest, we can fly Delta, we can fly Jet Blue, or we can fly NetJets. We can fly bare bones or we can splurge for additional benefits. It depends on what the individual values.
On the flip side, value drivers for a cable company do not span multiple dimensions. The primary drivers are simply cost and channel selection. There are also perks like streaming apps and DVR, but those are common features among cable companies and are secondary in nature.
Since all cable companies offer the same channels, then the only way a cable company can create a competitive advantage is by lowering its price, so that's what they do to gain subscribers.
Of course, if one cable company drives down the price then their competitor must as well. This cycle is well known to anyone who plays cable companies against each other by simply switching back and forth depending on who has the better deal that year.
A la carte cable will absolutely lead to lower cable prices as long as there are two competing cable companies in any given area.
Value drivers for an airline company, as you mention, span multiple dimensions -- cost, comfort, quality of service, perks (food/drink), baggage limitations, destinations, etc. This means airlines can position themselves to address any combination of these dimensions, and the consumer benefits by having options.
We can fly Spirit or Southwest, we can fly Delta, we can fly Jet Blue, or we can fly NetJets. We can fly bare bones or we can splurge for additional benefits. It depends on what the individual values.
On the flip side, value drivers for a cable company do not span multiple dimensions. The primary drivers are simply cost and channel selection. There are also perks like streaming apps and DVR, but those are common features among cable companies and are secondary in nature.
Since all cable companies offer the same channels, then the only way a cable company can create a competitive advantage is by lowering its price, so that's what they do to gain subscribers.
Of course, if one cable company drives down the price then their competitor must as well. This cycle is well known to anyone who plays cable companies against each other by simply switching back and forth depending on who has the better deal that year.
A la carte cable will absolutely lead to lower cable prices as long as there are two competing cable companies in any given area.
6
"In effect, the airline industry has unbundled, so that you pay only for what you want."
Since when is wanting a decent amount of room to sit on a long flight anything other than anyone would want for the price of his/her ticket? As if being cramped and miserable is an option anyone would desire. Good old corporate greed is driving all this. Pay $200 to change a flight; meanwhile, most all flights are overbooked so no loss to find a replacement. Simply more $$$ for investors' and executives' pockets. Southwest doesn't charge a change fee, so the arguments for it are bunk. And meanwhile the airlines offer all these "extras" to you like they're your best friend, while they just keep reaching deeper and deeper into your pocket.
Since when is wanting a decent amount of room to sit on a long flight anything other than anyone would want for the price of his/her ticket? As if being cramped and miserable is an option anyone would desire. Good old corporate greed is driving all this. Pay $200 to change a flight; meanwhile, most all flights are overbooked so no loss to find a replacement. Simply more $$$ for investors' and executives' pockets. Southwest doesn't charge a change fee, so the arguments for it are bunk. And meanwhile the airlines offer all these "extras" to you like they're your best friend, while they just keep reaching deeper and deeper into your pocket.
The flaw in this analysis is the assumption that there are two competing cable companies in any given area, which is almost never the case. Here in DC I am hostage to Comcast, and it shows in terms of cost, selection, and customer service.
1
@Zartan - I alluded to that flaw at the end. In many places right now, that is absolutely the situation, but if the industry truly changed and channels were no longer bundled the way they are now, then barriers of entry will decrease and you'll see more substitute products take form. Think Aereo but with more channels. This drops price even further for the original cable companies that don't hold a real competitive advantage (and may even hold a competitive disadvantage because their customers hate them and want something else).
@zoli - I don't really see your point. You get what you pay for. If you want a "decent amount of room" then buy a seat with a decent amount of room. That's a fair choice that you can make for yourself and many airlines give you the option to do just that.
If you want comfort priced into your ticket, feel free to book a NetJet. Just don't be surprised when it costs you more than the same trip on Spirit. Paying a premium for added value is not a new concept.
@zoli - I don't really see your point. You get what you pay for. If you want a "decent amount of room" then buy a seat with a decent amount of room. That's a fair choice that you can make for yourself and many airlines give you the option to do just that.
If you want comfort priced into your ticket, feel free to book a NetJet. Just don't be surprised when it costs you more than the same trip on Spirit. Paying a premium for added value is not a new concept.
If we accept Mr. Irwin's premise, that the same choices are available as before un-bundling (pay nothing and get no service, pay a lot and get full service) and the only change is that we get a new option: pay a little, make decisions about unbundled services, and get fewer services, then I hope this argument is not used as a basis for regulation.
If it's some truth of behavioral economics that deciding not to buy things that would make you more comfortable makes you unsatisfied, then it's one of those truths that just reflects badly on humans at a certain time and place in history. Get over it! Maybe if we were talking about essential services like health, hurting people's feelings without diminishing their options would have significance for public policy (probably not though); but in this case, I don't think it does. Get used to the new regime, change your reference level of service, and you won't experience that bitter loss aversion. Remember that flying was unaffordable for most in the regulated era, and that there was unsustainable excess capacity in much of the last 13 years.
(This is all conditioned on those assumptions though.) Assuming that people are irredemably irrational probably encourages them to be so.
If it's some truth of behavioral economics that deciding not to buy things that would make you more comfortable makes you unsatisfied, then it's one of those truths that just reflects badly on humans at a certain time and place in history. Get over it! Maybe if we were talking about essential services like health, hurting people's feelings without diminishing their options would have significance for public policy (probably not though); but in this case, I don't think it does. Get used to the new regime, change your reference level of service, and you won't experience that bitter loss aversion. Remember that flying was unaffordable for most in the regulated era, and that there was unsustainable excess capacity in much of the last 13 years.
(This is all conditioned on those assumptions though.) Assuming that people are irredemably irrational probably encourages them to be so.
I'm one of those guys who logged near a million miles over the course of a decade.
I just wish the airline industry would stop underpricing their product. Cross the continent (twice) for a days pay? Think about it, its amazing.
The industry needs to offer their product at a price point that would provide for a fair profit and consistently reasonable service. If the major carriers drove toward quality at a profitable price, they could leave some room for niche discount carries in the marketplace as well. Good for all.
On the other hand, the complainers do forget that there are often business and first class seats to be bought....
I just wish the airline industry would stop underpricing their product. Cross the continent (twice) for a days pay? Think about it, its amazing.
The industry needs to offer their product at a price point that would provide for a fair profit and consistently reasonable service. If the major carriers drove toward quality at a profitable price, they could leave some room for niche discount carries in the marketplace as well. Good for all.
On the other hand, the complainers do forget that there are often business and first class seats to be bought....
4
No, I haven't forgetten that there are first class and business class seats to be bought. It's that if I want one I have to pay full fare from my own pocket. This while most of the passengers occupying them are benefitting from travel paid for by their companies. I travel by air for business usually three times a year. I have to use the corporate travel agent, so I don't get freedom to chose, and the restrictions are often so intrusive that I sometimes buy the ticket out of my own pocket in order to have freedom of choice. I don't get a tax break for this (it's subject to the 2% of AGI where we get taxed for our employers picking our pockets for business expenses that they can deduct in full), so why should those loading up on frequent flier miles for something they didn't pay for escape taxation for this extra compensation. Make certain benefits of "elite programs" subject to tax law and you'll very quickly see the airlines taking an interest in the common traveler again.
2
While I appreciate your position, I think you have a glorified idea of business travel for the average joe. I travel every week and I have no different experience than you. Don't you think the airline who is collecting 1000.00 a flight on my ticket from NY to DTW should give me at least a nod? Without people like me, you wouldn't get your 200.00 ticket. Shouldn't I at least be treated human in return?
The problem, as I've stated elsewhere is that humans are predators and cramming them cheek to jowl like herd animals makes them cranky. And they don't forget. And they want to eat their neighbors to maintain their territory.
Angle your irritation where it belongs. And imagine what it would be like experiencing those deplorable conditions you so abhor 3 times a year, every single week.
it's not fun out there.
The problem, as I've stated elsewhere is that humans are predators and cramming them cheek to jowl like herd animals makes them cranky. And they don't forget. And they want to eat their neighbors to maintain their territory.
Angle your irritation where it belongs. And imagine what it would be like experiencing those deplorable conditions you so abhor 3 times a year, every single week.
it's not fun out there.
My dissatisfaction with air travel stems from the feeling that I have that I do not get what I paid for. I rarely get to my destination at the advertised time and I rarely get the space in my seat that I paid for owing to the large people sitting around me. I cannot bring my own food and drink from home owing to the concern over carry-ons, yet the airports and airlines are free to gouge us once we are captive past security. These are not amenities.
7
Actually, according to the federal government, 79% of flights outbound from Milwaukee were on time in the first nine months of last year. Hardly "rarely". Also, you are free to bring your own food from home through security.
I think satisfaction on air travel has declined overall, but not because of an avalanche of fees. Anyone who joins a frequent flyer program and flies/spends the minimum to qualify for basic "elite" status, not much, can avoid bag fees and some of the other inconveniences, and be treated like a human being. Airlines have lost money since deregulation. Now planes are full but prices are still reasonable. and, yes, food and drink cost a few dollars. It's hard to add more flights to crowded skies and crowded airports until we have a 21st century air control system.
Not sure what the answer is, except grin and bear it for those to whom price is the only factor.
Not sure what the answer is, except grin and bear it for those to whom price is the only factor.
1
The difference between the airline industry and cable, is that with cable, most of the channels that people would not subscribe to are channels that they never watch, and could not care less if they suddenly stopped airing. Everybody wants to have the option of checking bags, eating meals and having more legroom. The fact that one has to pay extra for those services now creates the frustration of having to justify the cost and the nostalgia of when they were part of the package.
12
Unmentioned in this discussion is the elephant of industrial sports. ESPN and other sports channels charge cable operators much much higher fees than almost any other channel...and use the resulting billions to fund both the commercial industrial sports megalith and the ongoing corruption of universities as commercial sports enterprises that teach some classes on the side.
I never watch sports channels, but am never given the option of electing out of them, which represent a substantial portion of the total cost of cable operations. There's no need for cable operators to offer every single channel for a fee: but I wonder what would happen if they offered a 'no sports' option, which would be substantially less expensive. Not only would they find a lot of interest, but the sports monopolies would lose a little of their oxygen, which would be good for us all.
I never watch sports channels, but am never given the option of electing out of them, which represent a substantial portion of the total cost of cable operations. There's no need for cable operators to offer every single channel for a fee: but I wonder what would happen if they offered a 'no sports' option, which would be substantially less expensive. Not only would they find a lot of interest, but the sports monopolies would lose a little of their oxygen, which would be good for us all.
59
AT&T offers a plan that does not include ESPN channels.
That sounds similar to what satellite radio offers. My music-only subscription, with a few non music stations such as NPR thrown in, costs about $10/month. If I wanted sports stations, which I don't, it's double that. Works great for me.
1
Good points....another: turn off mindless TV & instead read, dance, play music, go to a park, etc.
As a long-time student and analyst of video, both as a consumer medium and as a business, this was a true throwback to an issue that has been front and center for decades, ever since the terms “bundling” and “unbundling” came into use. While Neil Irwin begins to touch on the serendipitous experience of discovering a M*A*S*H marathon on Hallmark, a channel he figured he would never watch, two other issues were also part of the discussion in the 1980’s and 1990’s. For one, back when 36 channels was the epitome of choice, Nielsen produced a chart demonstrating that no matter how many channels a home had access to, only about a dozen were ever viewed. While this may have supported the idea of “unbundling” or “a la carte” service, the fact was that “my” 12 were likely not the same as “your” 12, so cable operators still had to offer many more options to satisfy their subscribers. More importantly, as the country was becoming more diverse, channels such as BET and Univision were being added to systems, which by definition were likely to be viewed by a passionate, but smaller audience. Giving subscribers the ability to only purchase the channels they viewed would economically have forced these new, more diverse options off the menu, to the detriment of cable’s promise.
2
But now Univision is a broadcast network, available over the air just about everywhere. Plus its sister network UniMás as well as Telemundo. BET has a broadcast counterpart as well, Bounce TV. The digital transition has changed television, too, in ways we're only now starting to realize, five years in.
Offering their services bundled or unbundled, a la carte or prix fixe, vendors need to make a buck, and will price what they sell accordingly.
1
There may be some points of comparison, but airlines and cable are more apples and oranges than different kinds of apples. The different choices for viewing are far more flexible, numerous, interchangeable, and insignificant than choices on a plane. Once you're trapped into plane travel, various "choices" can be made so unpleasant you are de facto forced to pay more for certain services. Don't like some channels on your viewing selection? Easily go elsewhere, or just don't watch.
4
I preferred it when baggage check was included in airline tickets. I get annoyed with all the large bags passengers try to squeeze into the overhead bins and aisles, although I can't blame them for not wanting to pay the fee. I no longer have cable, but use internet access through Comcast along with Netflix and a digital antenna. The $70 monthly internet only fee seems too high to me though especially with all the deals I see constantly. I am curious what others are paying.
5
How much TV can people watch? Most of the time in homes all across the nation, the TV is on, but no one is paying attention. Good thing the cable companies can drain the bank accounts without a fight. If people had a choice, they would not pay.
5
I only watch news and PBS channels. It would be nice if I only had to pay for those.
6
Alas, you are one of the big losers in the digital transition, which should have included construction subsidies for "translator" broadcast stations in places like the Texas Hill Country - just beyond the San Antonio "digital cliff."
So watch over-the-air broadcasts. The four major networks and their local affiliates have morning and evening news broadcasts, and PBS is still on the air, too.
You don't have to pay for them at all. They're free. Get an antenna.
I don't buy your premise that unbundling is truly about letting customers only pay for what they use. With the exception of the truly poor customer who absolutely needs to pay for the cheapest seat, when has anyone ever flown somewhere and not needed at least a change of underwear? The unbundling of services is just another example of eeking out more money from the middle class within anti-competitive markets.
3
I am unbundled, I ditched cable, hooked up a good old fashion antenna to my TV and here in Manhattan I get 67 Channels, albeit many in Spanish and Asian language. I get the digital channels offered by all the broadcast networks. I alternately had Time Warner Cable, Verizon FIOS and RCN, never did I see the Spanish language WNET Ch 13-2 or their childrens channel Ch 13-3. I also get 3 variations of ION TV while all the Cable operators only offered one. There are many such examples where I get channels cable operators don't offer.
I have an Apple TV which gives me access to not just HULU Plus and Netflix and a plethora of other venues,((A&E, History, Smithsonian) some of which I must subscribe, but it also allows me to watch on my TV anything I can stream on any Apple device, including an iPod Touch, iPhone, iPad or Mac. So as long as Cable Networks stream their programming at their websites I get that for free. I am not a huge sports fan, most of what I want to watch is on free over-the-air TV.
My biggest issue with my bundled cable bill was being forced to pay for all the sports and news channels, which, although buried s a "basic" channel on most systems, are the most expansive channels for cable operators and therefore their customers. It really bothered me to be subsidizing Fox News, MSNBC and CNN, which I never watch and charge operators huge fees.
This works for me, and I am saving a bundle, and still will even after I sign-up for HBO's streaming service.
I have an Apple TV which gives me access to not just HULU Plus and Netflix and a plethora of other venues,((A&E, History, Smithsonian) some of which I must subscribe, but it also allows me to watch on my TV anything I can stream on any Apple device, including an iPod Touch, iPhone, iPad or Mac. So as long as Cable Networks stream their programming at their websites I get that for free. I am not a huge sports fan, most of what I want to watch is on free over-the-air TV.
My biggest issue with my bundled cable bill was being forced to pay for all the sports and news channels, which, although buried s a "basic" channel on most systems, are the most expansive channels for cable operators and therefore their customers. It really bothered me to be subsidizing Fox News, MSNBC and CNN, which I never watch and charge operators huge fees.
This works for me, and I am saving a bundle, and still will even after I sign-up for HBO's streaming service.
14
This brings up another problem with the pay-TV regime as it stands now: No one really knows what those fees come to.
According to the best guesses out there, the fees for cable news are not particularly huge. The largest is Fox News's, about a dollar a month. CNN and MSNBC charge considerably less. But of course they are big enough to matter, when taken together. Pew keeps tabs on these fees as part of its annual "State of the News Media" series.
http://www.journalism.org/packages/state-of-the-news-media-2014/
ESPN, though? That's another story - a $6/mo story, give or take.
A good start would be to require all multichannel providers to itemize all those "license fees," maybe once or twice a year - just to get the information out there.
According to the best guesses out there, the fees for cable news are not particularly huge. The largest is Fox News's, about a dollar a month. CNN and MSNBC charge considerably less. But of course they are big enough to matter, when taken together. Pew keeps tabs on these fees as part of its annual "State of the News Media" series.
http://www.journalism.org/packages/state-of-the-news-media-2014/
ESPN, though? That's another story - a $6/mo story, give or take.
A good start would be to require all multichannel providers to itemize all those "license fees," maybe once or twice a year - just to get the information out there.
DavidFNYC--what antenna are you using? I'm thinking of doing the same thing.
I few years ago I realized that I was paying for premium channels that I never watched, so I gave up ALL premium movie channels, saved over $100 a month, and purchased a Netflix subscription for $6.99 a month. To me, that was a no-brainer. However, now my basic satellite TV bill has gone back to the level that it was before I ditched my premium channels. To me this is highway robbery. I watch, maybe, 5 cable channels, none of them sports channels, but I am paying for around 200. I would probably benefit from unbundling.
3
If the author is prone to waste 3 hours watching M*A*S*H, maybe he should give up TV altogether. I never saw any redeeming quality in watching two bullies pick on two inept human beings. As for TV in general, I'm with underwater44. Most of the channels are infomercials trying their level best to sell something. Give me PBS, NFL football, TCM, and local news, and I'll be happy.
2
I'm with Fred about channels. Sadly, I just called Comcast to reduce my bill and they only managed to reduce it $25 if I went from Digital Complete to Digital Basic. I was looking for big savings - Comcast just doesn't get it. You can'[t even find info about pricing on their website - they "manage" your internet experience so that you can't find details of anything - forcing a phone call to a person whose goal is to provide the least amount of savings possible (he was successful in that regard). Fortunately, I have a fiber optic alternative provider, which I am about to switch to. Bye bye Comcast! And to think our government might let you buy Time Warner Cable is very troubling indeed.
Here's my answer to the high price of home entertainment:
First, a good broadband connection. Then:
Netflix: $16.48 per month
Books(not e-books!): often used, sometimes new, sometimes from the library
If there is a sporting event I really need to watch, I can go to a neighborhood bar. As for news, there is no real news on television that can't also be found on the internet, and plenty more on the internet that can't be found on TV.
And if all that fails, how about a nice long walk.
First, a good broadband connection. Then:
Netflix: $16.48 per month
Books(not e-books!): often used, sometimes new, sometimes from the library
If there is a sporting event I really need to watch, I can go to a neighborhood bar. As for news, there is no real news on television that can't also be found on the internet, and plenty more on the internet that can't be found on TV.
And if all that fails, how about a nice long walk.
5
Airline industry tells us absolutely nothing about communications issues. There's no free speech, political access, democracy issues involved in airline practices of raising ticket prices by charging more for luggage.
What it does show is the need for strong consumer protection laws and enforcement in both industries. The airlines are raising ticket prices by deceptively charging for baggage but not reflected all the "add on" charges in the ticket price. Fix there is require airline ticket price to reflect the total charges by requiring ticket pricing to include all "add on" charges.
With communications such as cable, satellite or broadcast, all carriers much allow consumer to purchase what they are going to use and pricing cannot discriminate against one content provider over the other. The main issue with net neutrality. Communications is a utility requiring use of public access so it comes under much tighter consumer protection laws and freedom of access requirements.
What it does show is the need for strong consumer protection laws and enforcement in both industries. The airlines are raising ticket prices by deceptively charging for baggage but not reflected all the "add on" charges in the ticket price. Fix there is require airline ticket price to reflect the total charges by requiring ticket pricing to include all "add on" charges.
With communications such as cable, satellite or broadcast, all carriers much allow consumer to purchase what they are going to use and pricing cannot discriminate against one content provider over the other. The main issue with net neutrality. Communications is a utility requiring use of public access so it comes under much tighter consumer protection laws and freedom of access requirements.
2
One thing unbundling would do is force consumers to know (pay) the actual cost of a particular channel. I saw a monthly cost breakdown per channel a while back (1-2 years, don't recall exactly) and here are three highlights: Discovery $0.24/ month, CNN $0.49, ESPN $5.64. That last cost really shocked me. Was watching sports live really worth eleven times the cost of a reputable news organization? The answer was no. We cut the cord. Unbundling will certainly change these monthly costs, higher no doubt. But now each channel will have to live on its own merits. As is well known, the middle class has seen salary stagnation over the last thirty years. The entertainment business, on the other hand, huge increases. So how much will one pay before "turn on the game" becomes "hey kids, let's go outside and throw the football".
4
Doesn't have to wait for unbundling. A cable or satellite provider could itemize all those charges tomorrow. But it won't unless required to.
That's true, but that's not the point. The itemized costs would still be subsidized costs, since they are still bundled, and hence, paid for by everyone whether you want to watch a particular channel or not.
It's the entire point. You can't have an informed discussion without information symmetry.
The studies that found unbundling to be more expensive hypothesized complete mandatory unbundling. We wouldn't need that; bundles would be more attractive for some consumers, and more healthy for the whole system if they remain an option. Just allow the competition coming from cord-cutters to put pressure on the big cable companies, and see how they respond. I still believe competition in this sector is beneficial.
4
Cable monthly fees are at the rate that competition within the industry permits. Rates won't vary in a big way no matter what results from the unbundling debate. What can make a difference for consumers is giving them more choice in which channels to include in their monthly plan. My estimate is that they will be more comfortable paying the same fees if they felt empowered to personally select their own lineup.
1
"Cable monthly fees are at the rate that competition within the industry permits."
The problem is that in most areas, there is no competition.
The problem is that in most areas, there is no competition.
8
For example in rural areas where only satellite connections are available, and with only two providers they don't compete on price.
The airlines are in a race to the bottom, followed closely by cable and telephone providers, hotels, car rental services, and subscriber services of all sort (home security, satellite radio, storage lockers, banks). American business has figured out that if it is more painful to go through a switch of providers, consumers will put up with almost any insult or indignity in the form of fees, poor service, and general dissatisfaction. And since competition really doesn’t exist anymore, all providers deliver the same level of service. Once it was great service that kept customers loyal. Now it is contrived and collusive pain. What a strange time we live in.
39
I disagree with this analysis. The airlines had seriously and systematically UNDER-priced their offerings throughout growth period into well into the early 2000s. The result was bankruptcies and consolidation with far greater market concentration and pricing power. We can debate whether this is good or bad in another column- but the result is that airlines can offer these a la carte ripoffs (cost recovery?) because they have the power to do so. Cable TV has always been monopoly in particular area (economist use the word "natural monopoly"- necessary because you can't have multiple sets of wires etc). As far as unbundling of cable TV, I welcome it. In fact, TV networks offer their own streams via the computer so I may cut the cable, as much as I can, for TV. Regarding airlines, I have been loyal to JetBlue, but as it becomes "share-holder friendly", my brand loyalty will dissipate as leg-room shrinks and bag checking costs $.
6
I personally have no use for cable tv, as long as there's Netflix, Roku or Amazon Prime, I'm good to go! Unbundling, bring it on!
10
What are people doing that costs $200 month for cable? I keep hearing that but I don't get it. We pay $120/month including a boatload of taxes for FiOS Quantum internet, FiOS TV basic plus, and a dummy landline that we have only because triple play is so much cheaper than double play.
2
I wish we had choices in NYC -- $120/month sounds lovely. My neighborhood (and most in NYC) have only one option, Time Warner Cable. My bill was $180, now it’s going to be over $210 with their new fees next month. Fees like a new add-on fee for sports (I don’t watch any sports!) and a new Broadcast fee, talk about nickel and timing you to death. My package includes: TV, internet and phone + DVR & HBO, Showtime.
If the FCC (or whatever governing agency makes the rules) were to allow competition in NYC, I can only imagine the better, competitive pricing that would follow. Look at wireless companies — many competing companies, and cell service has improved, and become cheaper over the years. Sigh.
If the FCC (or whatever governing agency makes the rules) were to allow competition in NYC, I can only imagine the better, competitive pricing that would follow. Look at wireless companies — many competing companies, and cell service has improved, and become cheaper over the years. Sigh.
1
It's like an evolutionary arms race. We the people want cheap TV (or airfare). They figure out a way to make it appear cheaper while actually making it more expensive. We fall for it.
Some of we the people figure out ways around it. For air travel - bring your own food, use a credit card (you need one anyway) that includes free checked luggage, switch seats once you are on the plane if a better seat is open, etc. We fly all over the world at the lowest possible overall cost by using these strategies.
TV? We stream or don't watch at all. Once the smoke settles on the various streaming options, we'll buy the winner and watch whatever we want for $30/month, bye-bye FiOS TV, bye-bye landline.
I'm sure they will then figure out some other way to gouge us.
Some of we the people figure out ways around it. For air travel - bring your own food, use a credit card (you need one anyway) that includes free checked luggage, switch seats once you are on the plane if a better seat is open, etc. We fly all over the world at the lowest possible overall cost by using these strategies.
TV? We stream or don't watch at all. Once the smoke settles on the various streaming options, we'll buy the winner and watch whatever we want for $30/month, bye-bye FiOS TV, bye-bye landline.
I'm sure they will then figure out some other way to gouge us.
4
I dropped cable because of atrocious customer service and a virtually unusable website. What tipped me over the edge…I couldn't get on the Internet. Called the provider and after a meandering through an interminable menu and finally reaching a real live person, he suggested that I submit these queries via the in-home agent via…you guessed it…the Internet.
Sayonara Verizon.
Sayonara Verizon.
4
Ha NYT, you hit at a subject close to home. When I subscribed to the weekend NYT, you marketed "read what you like" with an offering of different sections that cater to different subject matter. So compare sections of your newspaper to cable bundling and airline fees etc. I read the business, real estate, sometimes the main section and always the Automobile section - the rest is fluffy or targeted to other social groups I am not interested in. The price of the paper continues to rise, but the quality or volume of writing decreases - less or less fluff for more money. To the point; my automobile section was eliminated from the weekend and so lying about in bed with my comfy NYT is less adorable without reading about automobiles. Instead I look forward to dumping big special interest magazines devoted to frightening clothes and weird models and throwing out sections I don't read. Yes de-bundling is an extraordinarily wonderful idea whose very premise is an ode to "Pay for what you use" or in the NYT case "pay for what you read".
3
...whenever possible (and it is easier than people might think) fly Canadian or European Airlines...
1
I have been traveling for business for almost 25 years. Service, comfort, and food have been in a free fall for almost every one of those years. Expectations have declined to the point where any tiny bit of service is considered to be "good." Comfort is a long lost concept. Any airline that decides to compete on service will have millions of business travelers beating a path to their door. Virgin America is trying, but they have a very small market share at this point.
3
Just took VA for the first time and other then purple cabin lighting and the safety song what was the fiffrrence with other airlines?
Cable companies are bundlers, but unlike the airlines, they are also middlemen and the rise of the internet generally has been effective at eliminating the middleman function or at least making it more efficient and less expensive.
Let's hope that happens here too.
The other relevant analogy might be the record industry where the advent of iTunes no longer required the customer to by 12 songs to get the 2 or 3 they wanted. We are just at the beginning stages of that model for television content.
Let's hope that happens here too.
The other relevant analogy might be the record industry where the advent of iTunes no longer required the customer to by 12 songs to get the 2 or 3 they wanted. We are just at the beginning stages of that model for television content.
4
So be it. As much as I care about the future of our environment, my family and I have turned to driving to see my father and mother. The service at the airports and on the planes is appalling, unaffordable for us and a horror story for my sister who is disabled and the children. With other family members, we have turned to Facetime. It's sad that we don't visit in person, but that's just the way that it is. As far as cable goes, we have cut it to the bare minimum for now because of the shows that the kids like, but as other options become available and they grow older, we will end it. The hundreds of channels that nobody watches are a joke. My parents have Dish TV and it's ridiculous to say the least. The kids already like trading movies and DVD's, they've already cut back on the channels they watch and use their computers and, despite my love for football, I have gone back to listening to it on the radio. There are other ways around this supplementing the dynasties that control our country. And if we have to do without some things, we're prepared to do it. I'm sick and tired of paying hundreds of dollars for garbage on cable and garbage for flying. The costs are unaffordable for lower income people like me and are basically a waste of our money. If our train system were better, we would use that. To heck with cable and to heck with flying.
10
Perhaps if the governments of the world "unbundled" themselves from the airline industry, you'd actually see price decreases.
Consider that every time a plane arrives the company that owns it is paying through the nose in a non-free market to the government of the locality whose airport it lands at. The airport is built with taxpayer money, and the "gate fee" is charged - and passed along to - everyone who comes to the airport. And the TSA adds more headaches and costs to each airline as well.
Business fliers used to cover a lot of an airline's costs but with higher prices many businesses now do over the Internet what they used to do in person.
It will be a great day when the NYT reports more details when it comes to government interference in the market.
Consider that every time a plane arrives the company that owns it is paying through the nose in a non-free market to the government of the locality whose airport it lands at. The airport is built with taxpayer money, and the "gate fee" is charged - and passed along to - everyone who comes to the airport. And the TSA adds more headaches and costs to each airline as well.
Business fliers used to cover a lot of an airline's costs but with higher prices many businesses now do over the Internet what they used to do in person.
It will be a great day when the NYT reports more details when it comes to government interference in the market.
2
So...you are thinking that the for-profit users of airports, the airlines, should not make a contribution to the costs of running the airport such as air traffic control, ground traffic control, snow removal, TSA, utility cost of runway lights....so that the US Government has to pay 100% of those costs with tax dollars or borrowed dollars....from people and businesses that do not use that airport? Are you saying that you would like the people of Montana and Oregon, who do not travel to Logan Airport, to pay for the costs of running Logan Airport through their tax dollars so that American and United Airlines will not have to pay landing fees? What should taxpayers, who in your scenario, would relieve the for-profit airlines of this cost....what should they get in exchange? Perhaps free airline tickets? A note of thanks from the shareholders of each airline?
1
What nonsense. That gate fee is just like the tolls on highways. How else would you pay for the upkeep of the airport? The airlines don't own the airport, they rent space, including at the gate. The public owns the airport. Would you give away your rental property for nothing?
1
Sure. And the day when airlines build and operate their own airports will be the day that pigs start using them.
1
I am not a very frequent flier, but almost all of my flying experiences have been pretty pleasant, barring things out of the control of the airline such as weather or a minor mechanical glitch. Almost all of my apprehension of flying revolves around the overburdened airports and the visual alarm of robust security, guns, dogs, uniforms and a police state look that gives me the jeepers. I am glad that I do not have to subsidize somebody elses drinks, meal, oversized luggage, or need to stretch out.
When you look back at airlines of the past you see a golden times. When you look at the past of Cable, you see reruns of "Big Bad Mama" and "Zuma Beach" I don't think it's fair to compare where they have been or where each industry is going.
When you look back at airlines of the past you see a golden times. When you look at the past of Cable, you see reruns of "Big Bad Mama" and "Zuma Beach" I don't think it's fair to compare where they have been or where each industry is going.
5
As someone else mentioned, the comparison between flying and cable TV is not a good one. Forcing someone to pay extra for baggage even for a carry-on bag when it's near impossible not to travel without extra clothes is insulting. Cable TV packages force us to pay for the Home Shopping Network when we don't want it. If I want to add Turner Classic Movies to my cable in my market, I need to also add 20 others I don't.
Airlines have been trying to confuse us by advertising low fares but adding ridiculous fees for needed functions such as luggage and any leg room at all (Hello, Spirit? I'm talking to you.). How long before a $5 fee to use the lavatory?
Now, if cable TV suddenly starts charging $2 every time you turned on your television, and $5 every time you changed the channel, then you might be talking apples and apples.
As I think I have read elsewhere, aren't cable fees in Europe FAR cheaper?
Airlines have been trying to confuse us by advertising low fares but adding ridiculous fees for needed functions such as luggage and any leg room at all (Hello, Spirit? I'm talking to you.). How long before a $5 fee to use the lavatory?
Now, if cable TV suddenly starts charging $2 every time you turned on your television, and $5 every time you changed the channel, then you might be talking apples and apples.
As I think I have read elsewhere, aren't cable fees in Europe FAR cheaper?
4
Flying is less pleasant for other reasons than fees. The biggest change between 1994 and now was the creation of the TSA, which is unpleasant at best. And the airlines themselves seem nastier.
This might also be the case with satellite and cable. My experience with customer service at both has generally been pretty good. Cable is a little inept at times, but generally has been nice about it. Would that change in an unbundled environment?
This might also be the case with satellite and cable. My experience with customer service at both has generally been pretty good. Cable is a little inept at times, but generally has been nice about it. Would that change in an unbundled environment?
1
What? The biggest changes in the airlines measured from any date are: the escalation of the price of fuel, the dis-establishment of the Civil Aeronautics Board, the consolidation of the American airline industry, the advent of low cost carriers and the fantastic airline safety record....
The establishment of TSA is a non-event. Perhaps you are referring to the increased level of screening at airports since 9/11 which seems to bother you. But I am just guessing.
The establishment of TSA is a non-event. Perhaps you are referring to the increased level of screening at airports since 9/11 which seems to bother you. But I am just guessing.
1
This is not mentioned in the article but two factors may have driven the unbundling in the airline industry. The first was semi-fixed labor costs due to a multitude of union contracts, coupled with the second factor: the internet and websites like Travelocity, Expedia, etc. allowed consumers to readily find the cheapest air far across all airlines for any date and any departure time. The cheapest fare wins, so the airlines with the union contracts and semi fixed labor costs couldn't reduce fares, but had to appear to reduce fares to be competitive. So the unbundling began with baggage fees, etc. and the upcharges at check-in. I am not sure the situation is the same for cable because the infrastructure and local regulation don't allow consumers as much freedom to choose. But the streaming services do increase competition and do give us consumers another option to Comcast, and I think that will be good. Of course, if I were Comcast, I would replace the lost TV revenue by consumers who switch to streaming by charging them more for broadband...and so it goes.
3
I know the article is about cable tv fees but there was a negative reference to Ryan Air and how it costs you to check in a bag at the airport rather than online. Misleading. I love Ryan Air (most seem to hate it). They are very clear as to the rules. Very. If you follow them, all is well. If you don't, you pay. For example, they are clear as to printing your own boarding pass. If you don't, it's like 50 euro. Very clear to check your own bag. If you don't 50 euro. Very clear that a carry on, one only, can be 10 kilos. 10.1, 50 euro. Etc. They are on time. The planes are clean. No seat back coming on top of you. No seat pocket with who knows what in it, giving you more leg room. Food is good and reasonably priced. I pay an extra small fee for pre boarding (last time i did it it was 5 euro, might be more now but well worth it). I don't own their stock or know anyone that works for them but their model works. Low prices for us and good profits for them.
4
We flew them many years ago when we lived in Europe and found them to be very good too.
My answer to cable bundles was simple.
I bought a television antenna.
I bought a television antenna.
14
Since Congress mandated the change to digital service, a significant portion of the country cannot receive television signals. They have no choice but to get cable or satellite or be left with dark screens. I believe the term for the more limited broadcast range is "digital cliff."
1
Mine is even simpler: I stopped watching TV.
"Unbundling" aside, there's one thing that the airline and cable industries have in common; they both stink.
10
Aren't you completely ignoring the anti-competitive effect that the combination of all the airlines have had?. The mergers of the airlines, which the government allowed, have decreased competition and given the airlines the opportunity to start gouging consumers by charging them bag fees, fees for meals, etc. With the drop in gas prices, are the airlines dropping their fares, as you would expect them to in a highly competitive market? Of course not, because they face little competition now.
8
Several years ago, when my mother (at age 80) was flying from New York to Zurich, they took away her round knitting needles (you know, the worries of the 80-year-old woman storming the cockpit and stabbing the pilot to death with her knitting needles).
Her comment to the airline staff: "Just remember, I am old enough to remember when flying was FUN!"
Her comment to the airline staff: "Just remember, I am old enough to remember when flying was FUN!"
4
You ever tried to enforce rules with exceptions like that? 80 year old can knit - but how about the 65 year old, then how can you refuse the 50 year old ...
I have no problem with hard and fast rules. Even an 80 year old can give up knitting for a day.
I have no problem with hard and fast rules. Even an 80 year old can give up knitting for a day.
All I want is HBO, and perhaps Syfy to go along with it. Certainly no sports channels. I say, bring unbundling on. The channels themselves would win: I haven't paid for their services since 2008, when I got rid of cable TV. This way, I would be paying at least something, versus nothing at all for years.
7
syfy channel would not exist if it were not for bundles. It comes packaged with USA, Bravo, MSNBC and all the rest of the NBC/Universal channels.
You miss one of the key features of streaming video, which is the ability to watch a show when you want it.
10
I am no economist, but I don't think the comparison is valid. If I want to travel to San Francisco from Chicago for a three day business meeting, I have no choice but to fly --- not by car, not by bus, not by bike. But I have a wealth of choices for entertainment --- reading a book, taking a walk, going to a movie, play a video game, surfing the Internet. The companies competing for my entertainment dollar will have to price accordingly.
14
I have a gym membership, which is a bundle. My gym has free weights, machines, treadmills, rowing machines, a pool, steam room, and more. If I only use the free weights, I'm subsidizing everything else. Newspapers are bundles, but maybe I only read the sports or entertainment section. If I buy a cookbook, I may not be interested in the dessert recipes. On the other hand, we used to buy bundled albums and CDs and only listed to one or two songs. But those are now unbundled and we can buy individual songs. I think it's all about perceived value. I gave up cable TV years ago because I realized it was a bad value.
3
ironic that you mention music, because that industry is moving towards the bundled subscription model of cable. And you can already purchase just one or 2 episodes, or a season of virtually all shows right now on itunes or amazon or google. I fully agree with the columnist that unbundling will end up backfiring on most consumers.
I am personally in favor of getting rid of the bundling of TV, as I only watch 5 or 6 channels. However, at least where I live, the cable companies control access to the Internet and have a monopoly. If they are losing money through cable television, they are only going to jack up the prices of Internet access. They will continue to find new ways to take advantage of the consumer and squeeze as much money from us as possible. There is a reason cable companies spend tens of millions of dollars lobbying capital hill every year, especially with net neutrality on the horizon.
15
It turns out that some of us pay for your Sports programming. We don't want to anymore. Yes, your cable costs will go up. Ours will go down. What are you, a socialist? You want me to pay for your extras? Oh, wait, that's what the neo-con Republicans want, not socialists.
14
I share your sentiments but you let your political sympathies get ahead of economics.
Under net neutrality (opposed by the Republicans), you as a light bandwidth user would subsidize the heavy bandwidth video users (sports, Netflix, etc.) in a different way as the increased infrastructure costs cannot be passed on to the heavy users.
Under net neutrality (opposed by the Republicans), you as a light bandwidth user would subsidize the heavy bandwidth video users (sports, Netflix, etc.) in a different way as the increased infrastructure costs cannot be passed on to the heavy users.
The writer of this article seems incredibly naive, trying to equate two very different things. Go spend some time looking at how almost anyone under 30, or for that matter even under 40, watches TV nowadays. Outside of sports there is almost nothing that anyone watches when it is broadcast. We stream everything and frankly if we can't stream it we don't watch it. And we like it this way, it is not the same as airline unbundling where if they take away our dumb cable channels we will complain. The vast majority of cable channels are just plain dumb. But they are packaged into the deals because they need to be in order for cable providers to get the bigger channels offered by the parent companies of those channels. We're in a golden age of television now and it is in part do to the new way we watch TV. Hopefully this new way continues to push producers to focus on quality programming instead of just throwing a ton of garbage out there like they have been throughout the 80s and 90s - the worst period of television since its creation.
6
You are dead wrong. We are in the 'golden age' of TV precisely because of the bundled subscription model. You think AMC or FX or IFC would even exist at this point if they had no predictable revenue stream coming in to support what was considered very risky programming choices? Look at what movies have become - lowest common denominator, risk-free casting which are virtually unwatchable. Expect a whole lot more Honey boo boo, and a whole lot less Mad Men.
6
This article is so "Apple and Oranges" "nytimes upshot" I dont even know where to start. Both are consumer products and that's about it.
13
My high-rise mixed commercial/residential building has an exclusive contract with Comcast. In return, all residents get "free" basic cable, paying only around $7/month to rent the cable box. (Before our bldg put in free wifi, I paid $65/month for internet access and cable box rental.) The channel selection seems pretty limited and lame, although my disaffection for television in general may contribute to my low opinion. I do, however, enjoy shows about animals, science and nature and recently investigated buying a package that would give me access to these channels. Haha, joke's on me. To get two of the five channels I would like would cost $45 per month and to get all five would cost $99/month (price guaranteed only for the first year.) How absurd. I'm not trying to buy access to Starz or HBO; I want National Geographic, Science, Smithsonian, etc. As much as I would like these, there's no way watching tv is worth $1200/year - before taxes! Instead, I'll hit up the public library, PBS store and other venues for DVDs of all these interesting programs. At least when I'm done, there will be something tangible to share. If I spent $100/month on TV, I'd have to watch a lot of it to recoup my investment. In my last building, I had great cable selections and wireless internet for only $25/month from a small regional provider. Being stuck with what is essentially a monopoly provider has definitely raised my costs and lowered my satisfaction.
12
As the scare quotes indicate, that cable service isn't free but rather, well, bundled into the rent. Same for the WiFi. Save that low opinion for the landlord who is hiding the real costs from you.
Most of the complaints about air travel come from those who easily afforded the previous prices and the service it provided. They do not come from those who can now afford to fly -- which they could not before -- and who now make life so unpleasant for the previous denizens of the high-priced environment. The same will be true for cable unbundling -- those who can afford the huge price for a huge bundle will complain, but the many able to pick and choose the few channels they need at a lower price will be quite happy.
One other benefit -- a return to some sort of sanity in college football whose income is highly inflated by the fact that millions of non-sports fans turn over $8 a month to ESPN allowing it to pay premium prices for programming from colleges for its growing empire. When only sports fans have to pay that piper, ESPN will find that its pot will not be a big without the non-sports subsidy. So maybe Michigan will not be able to afford to pay $8 million a year for a coach. That's not such a tragedy.
One other benefit -- a return to some sort of sanity in college football whose income is highly inflated by the fact that millions of non-sports fans turn over $8 a month to ESPN allowing it to pay premium prices for programming from colleges for its growing empire. When only sports fans have to pay that piper, ESPN will find that its pot will not be a big without the non-sports subsidy. So maybe Michigan will not be able to afford to pay $8 million a year for a coach. That's not such a tragedy.
35
l disagree with your assumption that complaints only stem from "those who easily afforded the previous prices and the service it provided." I have been flying for years, because my family lives abroad, and find that flying has become increasingly more difficult to afford, more stressful and certainly less comfortable and pleasant.
2
This is incorrect. Back in the 1990s, flight costs were no higher than now (supposedly now that airfares are "lower"). But the value of the service was MUCH BETTER: flights were less crowded, they served food, the flights were on-time, the crew seemed less exhausted, the airport did not look like it belonged in a Third World country.
The reality is that the airline business went from being a service industry to a transportation industry - no different than if they were shipping boxes of cereal or tanks of oil.
The reality is that the airline business went from being a service industry to a transportation industry - no different than if they were shipping boxes of cereal or tanks of oil.
Huh? It's not so difficult to perceive that some airlines, not all, have "reconstructed" their pricing. "Fly from A to B, just $10!!!" And, yes, a seat of your own will cost $49, there's a $19 fee for wearing a winter coat, $7 for shoes, etc. Cost of flying: $85. This is annoying only for those who fell for the $10 come-on, but it does offer a cheap alternative.
OTOH, what if your fare for the 30-minute flight from Trenton to Newark included a 5-course meal, including a thick slice of ham fresh from a gestation crate and a full bottle of wine-- at 7:15 a.m. I can think of one customer for that deal, but not me, thanks.
The video entertainment industry, broadcast TV and cable, is already falling to the "digital revolution," just like the record/CD business before it, and bookstores, travelling circuses (political campaigns excepted), and scores of opera houses along the way. Entertainment via the Net-married-to-smart devices is about a huge shift in power away from institutions and into the hands of individuals. The old TV business models, always based post-war analog technologies, is dying, much faster than I ever imagined.
This is entirely different than the hucksterism practiced by some "low cost" (not) airlines, whose technology remains the same--and undifferentiated--from traditional full-service carriers. Coming: corporate acceptance of video conferencing in lieu of travel. That's why "Net" is spelled E N D at traditional airlines dependent on business travellers.
OTOH, what if your fare for the 30-minute flight from Trenton to Newark included a 5-course meal, including a thick slice of ham fresh from a gestation crate and a full bottle of wine-- at 7:15 a.m. I can think of one customer for that deal, but not me, thanks.
The video entertainment industry, broadcast TV and cable, is already falling to the "digital revolution," just like the record/CD business before it, and bookstores, travelling circuses (political campaigns excepted), and scores of opera houses along the way. Entertainment via the Net-married-to-smart devices is about a huge shift in power away from institutions and into the hands of individuals. The old TV business models, always based post-war analog technologies, is dying, much faster than I ever imagined.
This is entirely different than the hucksterism practiced by some "low cost" (not) airlines, whose technology remains the same--and undifferentiated--from traditional full-service carriers. Coming: corporate acceptance of video conferencing in lieu of travel. That's why "Net" is spelled E N D at traditional airlines dependent on business travellers.
8
The only times I fly are for trips outside of the USA and then due to the laws of foreign countries, the airline service is much superior to flights inside the US. I do not travel on business, preferring to use online methods for meetings. I might make an exception for an emergency such as severe illness or death in our family. As for television, my simple method of addressing this issue is to not watch at all. I can count on one hand the number of TV shows I have seen in the past year! And those were on PBS so I did not need cable or satellite to them. I would much rather spend my money on live events: theater, concerts, sports, museums, etc. And, even for those, I prefer the local high school or other amateur groups.
9
The premise of this article is misleading and the factual analysis is totally inadequate. It is true that both the airlines and the cable industry abuse their near monopoly status, aided and abetted by public officials that they have in their pockets. The similarity ends there.
The airline industry can and does bribe business travelers with "air miles" and other, relatively luxurious benefits, prompting business travelers to focus more on that than on competitive pricing. Ultimately, those increased costs are passed along to the general public, most of whom cannot afford anything more than the lowest level of "cattle car" travel. The wealthy and the business traveler have incentive to fight back and the average traveler has no ability to fight back.
The communications industry (tv, internet services and telephone) are much more vulnerable than the airline industry. Technological advance gives individuals and groups the ability to substantially expend the ways in which they can exploit communication services and to circumvent or actually improve upon the profiteering schemes of communications companies. The communications revolution was actually instigated and continues to be improved upon by thousands of people in virtual garages.
Unbundling by the aviation industry was not because people wanted to travel like cattle or wanted to pay more. It is simply a profit-making gimmick. Unbundling by the communications industry is key to improvement of service.
The airline industry can and does bribe business travelers with "air miles" and other, relatively luxurious benefits, prompting business travelers to focus more on that than on competitive pricing. Ultimately, those increased costs are passed along to the general public, most of whom cannot afford anything more than the lowest level of "cattle car" travel. The wealthy and the business traveler have incentive to fight back and the average traveler has no ability to fight back.
The communications industry (tv, internet services and telephone) are much more vulnerable than the airline industry. Technological advance gives individuals and groups the ability to substantially expend the ways in which they can exploit communication services and to circumvent or actually improve upon the profiteering schemes of communications companies. The communications revolution was actually instigated and continues to be improved upon by thousands of people in virtual garages.
Unbundling by the aviation industry was not because people wanted to travel like cattle or wanted to pay more. It is simply a profit-making gimmick. Unbundling by the communications industry is key to improvement of service.
30
I'm not sure what sort of business you're in or who your employer is, but I'm curious where all of these premium-price paying business travelers are.
Outside of the upper echelon of executives, I can't fathom companies giving middle managers a blank check to spend on travel. When I travel for my employer, the coach ticket must come under a capped cost. The luggage fee is reimbursed but nothing else. I have to pay for any upgrades, even just to human sized seats in "premium economy."
Fortunately, I have some say in accepting assignments which involve travel and will not accept any that require longer than a 2 hour flight.
Outside of the upper echelon of executives, I can't fathom companies giving middle managers a blank check to spend on travel. When I travel for my employer, the coach ticket must come under a capped cost. The luggage fee is reimbursed but nothing else. I have to pay for any upgrades, even just to human sized seats in "premium economy."
Fortunately, I have some say in accepting assignments which involve travel and will not accept any that require longer than a 2 hour flight.
2
I was so fleeced on my last flight that I've vowed not to fly anymore unless absolutely necessary. The airlines have gone too far.
Stephen, I agree as far as what's nominally set up for business travel - coach, cheep flights.
I started an assignment requiring travel last year. My first coast to coast flight was booked on our internal application - 6am starts for both directions, two stops for each. Ughh.
Then I find out how people *really* do it, like find flights and seats on Tavelocity, call the business office, and provide some reason why that 6am can't be met, or why the travel has to take under 6 hrs total, or.. or. And get better flights. THEN, they start racking up airline miles, and upgrade from what they've booked.
Especially in the latter case, those who travel less are indeed subsidizing business travellers, even the peons.
I started an assignment requiring travel last year. My first coast to coast flight was booked on our internal application - 6am starts for both directions, two stops for each. Ughh.
Then I find out how people *really* do it, like find flights and seats on Tavelocity, call the business office, and provide some reason why that 6am can't be met, or why the travel has to take under 6 hrs total, or.. or. And get better flights. THEN, they start racking up airline miles, and upgrade from what they've booked.
Especially in the latter case, those who travel less are indeed subsidizing business travellers, even the peons.
1
I used to get a lot of TV for free while the broadcasters made their money on advertising. Now I pay a fortune for TV and I still have to suffer through constant and annoyingly repetitive advertising. So, I am increasingly using the DVR as well as streaming. I may be paying a bit more but I can reduce the incessant, often idiotic, and repetitive ads. Here's another possibility for the cable companies. More and more people unplug the cable. It's too expensive and you can get your media fix in a number of other ways.
20
I love how they've turned one hour of play in sports into guaranteed 3 hours of TV time. That means ads at a rate of 2 to 1 of actual play time. I can't get through a whole football game anymore.
I am old enough to remember that cable TV was sold to us on the premise that we'd pay for it so there wouldn't be ads.
I am old enough to remember that cable TV was sold to us on the premise that we'd pay for it so there wouldn't be ads.
4
Kind of like having a paid subscription to the NY Times and have to tolerate advertising.
Airlines haven't "unbundled" - they have merged to the point where they are quasi-monopolies at individual airports. The more airlines at an airport, the lower the prices.
Had airlines "unbundled" then the price of a ticket would have gone down at the same time as fees for additional services have gone up. That has not happened. And it has not happened because the largest 4 US airlines (American, Delta, United, Southwest) carry 85% of all air passengers - a greater market concentration than banks or mobile phones.
This is a flawed analysis based on a flawed premise - that what airlines are doing is "unbundling," when in fact what they are doing is exercising market control.
Had airlines "unbundled" then the price of a ticket would have gone down at the same time as fees for additional services have gone up. That has not happened. And it has not happened because the largest 4 US airlines (American, Delta, United, Southwest) carry 85% of all air passengers - a greater market concentration than banks or mobile phones.
This is a flawed analysis based on a flawed premise - that what airlines are doing is "unbundling," when in fact what they are doing is exercising market control.
123
Go back to the regulated 1970's and 80's - there were only a handful of airlines then. Prices were FIXED and flights cost 4 to 5 times as much as they do today, inflation adjusted. We have more choices now for less money. Airlines are trying to stay in business. Over the long haul, 25+ years, most airlines have not been profitable. Most have gone bankrupt. Southwest is an exception.
2
Right - and back in the 70's and earlier, airlines did not compete on price - they competed on what services you would get for those prices, much as banks competed for regulated deposits by changing interest compounding to continuous compounding from daily or monthly or whatever.
Yet again airlines are not competing on price - they are using sophisticated algorithms to essentially auction services to the highest bidder. It's essentially game theory: how much will a person pay to get a specific seat assigned in advance, versus taking the risk of being assigned an even more uncomfortable seat, or even getting bumped from a flight.
Most airlines have not been profitable because they were actually competing; today's situation is one of market dominance. Comparing it to price regulation in the 70's is another false comparison. You would have to compare it to when there were more carriers and no price regulation.
Yet again airlines are not competing on price - they are using sophisticated algorithms to essentially auction services to the highest bidder. It's essentially game theory: how much will a person pay to get a specific seat assigned in advance, versus taking the risk of being assigned an even more uncomfortable seat, or even getting bumped from a flight.
Most airlines have not been profitable because they were actually competing; today's situation is one of market dominance. Comparing it to price regulation in the 70's is another false comparison. You would have to compare it to when there were more carriers and no price regulation.
6
Where we live, where only two airlines control the spoke to the hub, ticket prices increased (inflation adjusted) after deregulation and have continued to do so when prior to deregulation flights were more point to point and we had 5 airlines instead of 2. I would grant that flights to and from the hubs has become much cheaper but for the rest of us, not so much.
7
With online subscriptions, I want something even more radical than mere unbundled cable channels: the BBC iPlayer from Britain and the CBC Player from Canada. If either of them can get past national TV rights to offer subscriptions to worldwide viewers, I'll be right there to sign up, and then I'll probably just drop cable TV, period.
26
Cable companies have a revenue stream that they seek to increase. If direct streaming of channels interrupts the revenue, cable companies will shift more of their revenue stream to the internet side - increasing the cost of internet - and will price the most sought after channels to capture the majority of their revenue. Since the goal is to make a change at least revenue neutral, and the customer base will remain the same or decrease slightly, all remaining customers will see the same or increased bills. The ONLY way cable and internet services will come down in cost is if there is real competition in a market for the services, with multiple providers.
9
Like that old bumper sticker says: Kill Your Television.
I did. There is no show worth watching when it's accompanied by endless, intrusive commercials.
It's nice to see, however, that one can now go to Amazon, Netflix, etc, and watch a whole TV series, uninterrupted. The price is well worth it. And to me there is nothing so important on TV that has to be seen immediately; sooner or later it will be available on DVD or streaming.
This method of watching TV may be one of the very few remaining places in this world where one does not get bombarded by advertising.
As for the airlines, don't get me started on that one!
I did. There is no show worth watching when it's accompanied by endless, intrusive commercials.
It's nice to see, however, that one can now go to Amazon, Netflix, etc, and watch a whole TV series, uninterrupted. The price is well worth it. And to me there is nothing so important on TV that has to be seen immediately; sooner or later it will be available on DVD or streaming.
This method of watching TV may be one of the very few remaining places in this world where one does not get bombarded by advertising.
As for the airlines, don't get me started on that one!
42
"There is no show worth watching when it's accompanied by endless, intrusive commercials."
No TV show on the planet? Ever? I dont watch a lot of TV of any sort but this is a preposterous statement.
No TV show on the planet? Ever? I dont watch a lot of TV of any sort but this is a preposterous statement.
6
I 100% agree. I cut the cable 4 years ago, subscribe to Netflix and Amazon Prime for a monthly fee just a fraction of what the cable charges. I watch what I want, when I want. So I have to wait a bit to see the newest episodes of Homeland… it's well worth the wait to see them commercial free. I get internet via the cable provider and get weekly calls from them begging me to bundle my services and sign up for the cable TV as well. They offer me increasingly more channels for "just a few extra dollars a month" over what I pay now. But I never bite.
50 years ago I begged for a TV and my parents would not buy one. "They have to pay me to watch this stuff" was my dad's reply. He actually rented a TV so we could watch the men walk on the moon. That is probably the last thing I saw worth sitting through a commercial for.
50 years ago I begged for a TV and my parents would not buy one. "They have to pay me to watch this stuff" was my dad's reply. He actually rented a TV so we could watch the men walk on the moon. That is probably the last thing I saw worth sitting through a commercial for.
3
Tim noted that worthwhile TV programs would become available without commercials on DVD and/or streaming if one has patience. Perhaps you did not read his entire post?
How much would you pay to be whisked coast-to-coast in 3 hours? $189 is a sign of competition, not a reflection of the actual cost/value of maintaing such a service. Same with cable, and other sybaritic diversions. We will pay what they want us to pay, because we want it.
1
Whisked is hardly the word. The air time is fast but the numerous layovers to get to ones destination is not. Moreover there is nothing more boring than an airport with it's terrible "free" internet and expensive tasteless food.
1
This not a question of WANT anymore. It's an atmosphere of HAVE and NEED as it is with Greed I limit my air travel moow more than ever. I don't like Tyrants. A Train is fine with me.
2
Comparing airlines with cable TV is comparing apples with bananas, not apples with apples. Cable TV is not a necessity whereas travel is. Regarding traveI, I favor old-fashioned government regulation where routes can be allocated to approved carriers with fares established to assure a reasonable profit.
If it’s true un-bundling than viewership will force market worth pricing at both end of the spectrum's being what the channel charges cable and what cable charges customer. I would also expect commercial rates would change as well as advertised products will be more aligned to channel viewership metrics such as age and income and channel content. In areas such as educational TV formats in my opinion should be the core base defaulted into all makeups of offerings.
2
Cable hasnt been a good deal for a very long time. 500 channels where 400 of them contain content that the average consumer never watches except when flipping by the channel. I don't see how getting 50 channels I actually want to watch, without any ads, for slightly more ("slightly higher prices for fewer channels") could be a downgrade.
TV isn't air travel. TV gets syndicated. That's why there are so many shows that are available on Netflix, Hulu, Amazon, and other streaming services. Before that, there was a time when you couldn't turn on the TV in the evening without finding The Simpsons or Seinfeld playing, and usually you would have an option of multiple episodes of each.
I have a hard time, given my current experience with streaming services, believing that the problem will be getting content at a fair price. The issue will be deciding which services are actually providing you with the content you want, and which are redundant. Given that none of these services have yet to charge me over 10 dollars a month, it'd take 15 of them to produce a bill comparable to cable. TV isn't air travel.
TV isn't air travel. TV gets syndicated. That's why there are so many shows that are available on Netflix, Hulu, Amazon, and other streaming services. Before that, there was a time when you couldn't turn on the TV in the evening without finding The Simpsons or Seinfeld playing, and usually you would have an option of multiple episodes of each.
I have a hard time, given my current experience with streaming services, believing that the problem will be getting content at a fair price. The issue will be deciding which services are actually providing you with the content you want, and which are redundant. Given that none of these services have yet to charge me over 10 dollars a month, it'd take 15 of them to produce a bill comparable to cable. TV isn't air travel.
17
There is another solution. I simply will not fly anymore, not because of the cost, but because I refuse to be treated like a steer on the way to the slaughterhouse. Similar refusal to buy, en masse, will tame all of these problems over time. Television programming is even more subject to this kind of pressure than airlines. There are times, for business especially, when you simply must fly. There is never a compelling need to watch the pap that comprises most television.
70
Television content is determined by viewers taste. The pay TV services such as Showtime and HBO have some on the best quality program TV has ever seen. So if you are willing to pay 17.99 per service this is what you will get. HBO spends millions on their programming ( Showtime also). They have great producers, actors and script writers. Regular TV has been taken over by cheap to produce reality series as that is what is in demand. When more viewers gravitate to higher quality shows TV content will change to match taste.
3
I cannot believe that TV content is determined by viewers' taste. No way. There is very, very little on TV that I care to watch anymore.
3
In America, that would be never. The lowest common denominator of our garbage culture and grotesque education system is low indeed. Compare Discovery, The History Channel, and A & E twenty years ago with now. From ballet to Dog the Bounty Hunter. Brought to you by the viewing habits of the American public.
1
As I understand it from other articles, the Dish Network with its Sling TV service is trying to get millennials and other who have NEVER used bundled or unbundled cable services to pay for content. I guess they are trying to make the pie bigger. As to how the pie is sliced, that remains to be seen.
5
Maybe I need to complain to DOT about Frontier Airlines. They are big "unbundlers" and deserve to recieve as many complaints as any airline. They recently cancelled a flt I was supposed to be on less than 8 hours before it was set to depart AND the only ameloriation they offered was a refund on one leg of my round trip rather than offering to book me on another airline, forcing me to pay for a same day booking. Apparently Frontier also unbundled the passenger bill of rights.
23
In 2012 lowest rate complaints, Southwest. Low cost carrier, two carry ons.
The upshot, cherry picking data to be contrarian.
The upshot, cherry picking data to be contrarian.
7
The airlines have taken it much further than most consumers realize. I received an e-mail pitch from United yesterday, good for the next few days, that will allow me to purchase up to 150K additional United miles for 50% off! A mere $2800+, which works out to around .0188 cents per mile. So, lets assume we're naive and accept this "limited time offer" and now go to book an economy ticket on a non stop flight from San Francisco to Seattle in mid March at the lowest displayed price of $149 or, using your new trove of miles, you decide to use 10K of 'em in lieu of the $ fare. If my math is correct, the "exceptional deal" miles that you would have purchased from United for .0188 cents are now worth .0149 cents!
United will also let you use 50,000 of those miles and you can fly 1st class with your .0188 cent miles now worth .00686 cents.
Meanwhile, the new House today has decided to continue the Benghazi investigations!
United will also let you use 50,000 of those miles and you can fly 1st class with your .0188 cent miles now worth .00686 cents.
Meanwhile, the new House today has decided to continue the Benghazi investigations!
63
I get about 3 to 10 cents per mile when I use mine. I only use them for international business or first class flights. My family traveled 2 summers ago business class. The tickets were $12,000 for 360,000 miles ( about 3 cents/mile)
In reply to Snowman:
If the frequent flyer miles are priced kind of expensive, then don't buy them. It may be a lousy deal, but it doesn't sound like anything fraudulent; as you showed in your post, you have all the info you need to work out that it's not worth it.
I agree that we don't need the House wasting time with the Benghazi investigations; we also don't need them getting into the minutiae of airline frequent flyer programs.
If the frequent flyer miles are priced kind of expensive, then don't buy them. It may be a lousy deal, but it doesn't sound like anything fraudulent; as you showed in your post, you have all the info you need to work out that it's not worth it.
I agree that we don't need the House wasting time with the Benghazi investigations; we also don't need them getting into the minutiae of airline frequent flyer programs.
I've already done my own unbundling by dropping cable and buying a Roku streaming device. I get my local channels, including three PBS stations, over the air in HD, and I subscribe to four streaming services for a total of $25 a month. No sports channels, no shopping channels, no fundamentalist channels. I have no interest in going back, even though Comcast sends me offers on a regular basis.
80
I've done the same (using EyeTV with the Mac and a $60 HD antenna for free broadcast channel viewing/recording as well as Netflix for streaming). This costs $8/month. However, you must also have a $50/month internet connection...
I think the key problem is the Cable companies dominating both the internet and TV distribution markets. We need new, independent internet providers (or to consider it a utility and regulate quality and price). E.g., what happened to WiMax?
I think the key problem is the Cable companies dominating both the internet and TV distribution markets. We need new, independent internet providers (or to consider it a utility and regulate quality and price). E.g., what happened to WiMax?
4
Preach it, brother! I'm right there with you. And we will be the beneficiaries of what Dish and HBO have started in creating over-the-top streams of their products. Now that ESPN and HBO have started the ball rolling, soon *all* cable program services will have to follow suit. I couldn't care less about ESPN, but if I could get Discovery and the Science Channel in that bundle, then $20 a month looks quite appealing.
There is a big difference between an airline and a cable provider. The airline has a core function (travel to point A) and a whole bunch of extras, which you may or may not want. Cable is just the extras. A more accurate comparison would be that cable now makes me pay to check 300 bags (or none...but I need to check that History Chanell bag!).
11
And once you board the plane, you can't change airlines.
I cut the cord in late 2008. I have never regretted that. I can think of only a handful of of stations that I miss. Unbundling might be for the customers that cable has already lost.
Perhaps they'll get me back.
Perhaps they'll get me back.
16
You can watch "M*A*S*H" over the air for free, on WZME 43.1, out of Bridgeport. Just saying.
5
They have a far greater problem (they being the cable programmers, or those watching cable programmers) from me.
I've unbundled completely.
My cable provider sent me TWO digital converters for my TV(s).
I don't have a TV.
Similarly, I've flown once in the past 4 years. That industry hasn't put much effort into trying to woo me either. They hugged onto decontrol so hard, that it was a race to the bottom. Modern websites will aggregate all the charges and reveal the true cost---airlines save/make nothing in their strategy of perpetual annoyance.
The only thing on their (airlines/cable) side are crony republicans who will bail them out when the free market practices its will.
I've unbundled completely.
My cable provider sent me TWO digital converters for my TV(s).
I don't have a TV.
Similarly, I've flown once in the past 4 years. That industry hasn't put much effort into trying to woo me either. They hugged onto decontrol so hard, that it was a race to the bottom. Modern websites will aggregate all the charges and reveal the true cost---airlines save/make nothing in their strategy of perpetual annoyance.
The only thing on their (airlines/cable) side are crony republicans who will bail them out when the free market practices its will.
19
The point of unbundling in airlines is to increase revenue, not decrease costs for the consumer - consumers were not clamoring to have to pay for a checked bag if needed or pay of peanuts - in cable it is the opposite, most consumers really only watch a handful of channels, so why not just pay of them, or better yet only pay for the shows you watch, I got rid of cable I can easily use the 100 I save every month to go nuts on iTunes and still spend much less money....
20
People have a STRONG preference for bundling of the attributes they want of a product or service, and this drives higher satisfaction.
Prime example is cellphone service, where previously unbundled services (caller ID, voicemail, call waiting, call forward and in many cases even SMS) are now part of the plan. Very few people would argue that consumer were better off when they had to pay $2.50 per month for Caller ID because "people who didn't want it did not have to subsidize those who did".
Same with Wi-Fi in hotels: most hotels bundle it in the cost of the room, and most of the holdout chains have announced they will also do so starting this year. A clear preference for bundling vs. unbundling.
Airlines have used the "unbundling is better for you" hogwash to increase their revenue stealthily. Indeed cost of air travel increased about 6% in 2014, a year where fuel costs dropped and inflation was incredibly low.
The issue with current cable bundles is that they force us to buy channels we don't want. The bundles are built to deceive, not to provide value (like the ones for cellphones or hotels).
Will cable unbundling help consumers? Absolutely, as cable companies know that bundles are valued to consumers, and will create new, cheaper, voluntary bundles that are based on consumer preferences. Because if they don't do so, consumers will be free to pick and choose between cable and internet on a channel by channel basis.
Prime example is cellphone service, where previously unbundled services (caller ID, voicemail, call waiting, call forward and in many cases even SMS) are now part of the plan. Very few people would argue that consumer were better off when they had to pay $2.50 per month for Caller ID because "people who didn't want it did not have to subsidize those who did".
Same with Wi-Fi in hotels: most hotels bundle it in the cost of the room, and most of the holdout chains have announced they will also do so starting this year. A clear preference for bundling vs. unbundling.
Airlines have used the "unbundling is better for you" hogwash to increase their revenue stealthily. Indeed cost of air travel increased about 6% in 2014, a year where fuel costs dropped and inflation was incredibly low.
The issue with current cable bundles is that they force us to buy channels we don't want. The bundles are built to deceive, not to provide value (like the ones for cellphones or hotels).
Will cable unbundling help consumers? Absolutely, as cable companies know that bundles are valued to consumers, and will create new, cheaper, voluntary bundles that are based on consumer preferences. Because if they don't do so, consumers will be free to pick and choose between cable and internet on a channel by channel basis.
30
I'm not sure your example is the best. With caller ID, the information was always there; it was just a matter of whether someone paid the telco to be told it. With the opportunity to see the Australian-rules tiddlywink championship on Sportschannel 27, there are real costs involved in making it available, not the least of which is paying the tiddlywinkers.
The lessons that both the cable and airlines demonstrate for us is what happens when industries are dominated by just a few players who collude to prevent true competition. Most towns have only one option for cable, and the entire domestic airline industry has been reduced to 4 or 5 airlines, with many cities dominated by just one airline. Both the airlines and cable companies are thus able to say "if you don't like our crappy service, you're out of luck, because we're the only game in town".
213
Living in a household that never watches sports (not even the Super Bowl), I look forward to the day that I can get a cable package that doesn't include $30 worth of sports programming.
But if cable follows the airlines' example, the increased fees for the channels I do watch will add $50 to the bill.
But if cable follows the airlines' example, the increased fees for the channels I do watch will add $50 to the bill.
14
I have no doubt that Mr. Irwin is correct about us consumers needing to be careful about what we wish for. This wisdom is true no matter what the issue, as the old fairy tale about the European woodcutter and his wife who were granted 3 wishes by an elf who didn't want his tree home cut down.
At home, the wife wished for sausages, and magically they appeared on their plates. The woodcutter told his wife her's was a foolish wish and that he wished the sausages were attached to her nose. Voila, the sausages were on the end of the woman's nose. I bet you can guess what the poor couple had to use their 3rd magical wish for.
Back in the real world, I never had any doubt that TV channel unbundling would not result in much, if any, cost savings for consumers because Big Media, Big Content, and Big Communications companies didn't get huge passing on the savings to ordinary consumers.
The whole thing is about "TV and movies Everywhere", and has been since smart phones got big and capable in 2007. Neither rich consumers nor the industries named above will rest until you can be at the airport watching last night's episode of Game of Thrones on your iPhone. It will happen, but it won't be cheap.
If I had three wishes, I'd wish that Steve Jobs were...
1
The comments and the article are focusing on the cable industry and not the content industry. The cost of programming (justified or not) is the reason that costs continue to rise. It is ironic that there are more ads during shows AND the consumer has to pay more for the content. Given the perceived value of ads one would think that the content would be paid for. One problem is the lack of skill in placing ads on shows - the ROI is not positive. Maybe that changes in the future. Speaking to the 'hassle' of having content supplied from multiple providers - a creative entity will provide a solution once the financial opportunity presents itself - think Logitech universal remotes, Roku, Apple TV menu - eventually a solution will appear.
Speaking to the airlines comparison - the problem to me at least is that I do remember when you paid one price and got all the extras - for those that didn't travel 'back then' they can't miss what they never experienced.
Speaking to the airlines comparison - the problem to me at least is that I do remember when you paid one price and got all the extras - for those that didn't travel 'back then' they can't miss what they never experienced.
4
Heh, a less frightening version of The Monkey's Paw.
I'm sorry. I'm resolutely convinced that we need less TV in our lives. Less screen time where images are fed to us instead of being the directors and editors of our own lives. Let them unbundle it. Let it get expensive enough that people turn it all off and go outside and make our real world a better place. TV-watching is waste of the precious hours of our lives.
111
Off topic
1
Read Barro's piece, which assumed that high cable costs are to recover the costs of running wires. If that were true, there would be no basic-premium-superpremium tiers. The truth is that basic costs are covered by the basic cable subscription. The hefty costs of premium packages are separate
Now Irwin has a new non-sequitur: the evils of deregulated air travel are due to unbundling of services. That's exactly backwards. The airlines responded to deregulation by competing on price. The extra fees (which most people don't pay) came afterwards, as airlines struggled for ways to boost their margins.
One fee he mentions is entirely imaginary, and that's too bad. If I could pay $50 to have the seat in front of me moved forward a few inches, I'd gladly do it. But that's obviously impractical. If I want some comfort, I have to pay for business class or first class -- which increases my cost not by a fraction but by several multiples.
And in all his complicated arguments, Irwin ignores one simple fact: the cost of airline travel has gone down drastically since deregulation. He talks about new fees but ignores that real costs of air travel have gone down by 50% since deregulation.
Though, to be honest, that's the cost of flying for the average traveler, scrunched in their cramped, uncomfortable seat. If you want the 1980s air travel experience, you will indeed spend more. And if you want all 1000 of your cable channels, you will spend more. But few people actually want them.
Now Irwin has a new non-sequitur: the evils of deregulated air travel are due to unbundling of services. That's exactly backwards. The airlines responded to deregulation by competing on price. The extra fees (which most people don't pay) came afterwards, as airlines struggled for ways to boost their margins.
One fee he mentions is entirely imaginary, and that's too bad. If I could pay $50 to have the seat in front of me moved forward a few inches, I'd gladly do it. But that's obviously impractical. If I want some comfort, I have to pay for business class or first class -- which increases my cost not by a fraction but by several multiples.
And in all his complicated arguments, Irwin ignores one simple fact: the cost of airline travel has gone down drastically since deregulation. He talks about new fees but ignores that real costs of air travel have gone down by 50% since deregulation.
Though, to be honest, that's the cost of flying for the average traveler, scrunched in their cramped, uncomfortable seat. If you want the 1980s air travel experience, you will indeed spend more. And if you want all 1000 of your cable channels, you will spend more. But few people actually want them.
9
Most airlines have economy plus service where for an extra $50 you get more leg room.
2
$96, every time I've looked.
Also, most people do pay baggage fees. I don't understand how the airlines are getting away with the cattle-car conditions on board on even transatlantic flights. How can such cramped seating, for hours on end, have no impact on the passengers' health and well-being? Maybe we should sue.
Also, most people do pay baggage fees. I don't understand how the airlines are getting away with the cattle-car conditions on board on even transatlantic flights. How can such cramped seating, for hours on end, have no impact on the passengers' health and well-being? Maybe we should sue.
Nice column, but it overlooks a couple of things:
1) The bundled cable model is actually dying of its own weight. It couldn't continue on an unsustainable price trajectory. Consumers are balking at the $200 monthly cable bill. Young people are balking at $100. With 500 channels becoming 1,000 channels, and networks ceaselessly pressuring the cable companies for more revenue, the golden goose is dying. Nobody, not even Comcast, can save it. We can't AFFORD 100 or 200 networks that all feel entitled to charge $3-10 a month. We have got to make choices. Unfortunately that is the modern world.
2) The comparison to airlines is not entirely fair, because airlines are pretty much at the apex of high prices and low levels of service right now. The airline business is viciously cyclical. When the industry is over-planed, tickets to San Fran cost $200. When the industry is consolidated and fleets shrunk, it's $1000. Depending on what part of the cycle you pick for comparison, airlines can look like a bargain or they can look really expensive.
1) The bundled cable model is actually dying of its own weight. It couldn't continue on an unsustainable price trajectory. Consumers are balking at the $200 monthly cable bill. Young people are balking at $100. With 500 channels becoming 1,000 channels, and networks ceaselessly pressuring the cable companies for more revenue, the golden goose is dying. Nobody, not even Comcast, can save it. We can't AFFORD 100 or 200 networks that all feel entitled to charge $3-10 a month. We have got to make choices. Unfortunately that is the modern world.
2) The comparison to airlines is not entirely fair, because airlines are pretty much at the apex of high prices and low levels of service right now. The airline business is viciously cyclical. When the industry is over-planed, tickets to San Fran cost $200. When the industry is consolidated and fleets shrunk, it's $1000. Depending on what part of the cycle you pick for comparison, airlines can look like a bargain or they can look really expensive.
38
I do not trust the airlines to drop down to even lower service levels. Maybe they could start charging for turning on the light or the air-conditioning. I'm surprised they have not started charging extra for a seat or for having the cabin crew greet you when you enter the plane. Their innovation for finding ridiculous things to charge for is immense.
3
There are more channels but there is NOT necessarily more content. The high pay scales in the media industry has gotten to the point where they are killing their own viewership.
What you will notice is that, over time, a lot of good quality programming has disappeared. And, many of the extra channels are repeats of what are shown on other channels or they are old re-runs (not that re-runs are bad since some of the older content is actually better than some of the new stuff) or sometimes just junk. A lot of higher quality content generally are buried in paid packages or paid-per-view.
What is happening is form of inflation similar to way consumer product companies have been sneaking "stealth inflation" by DE-CONTENTING their products: using lower quality ingredients, shrinking package size, killing taste.
This is a warning: CONSUMERS ONTO YOU!
What you will notice is that, over time, a lot of good quality programming has disappeared. And, many of the extra channels are repeats of what are shown on other channels or they are old re-runs (not that re-runs are bad since some of the older content is actually better than some of the new stuff) or sometimes just junk. A lot of higher quality content generally are buried in paid packages or paid-per-view.
What is happening is form of inflation similar to way consumer product companies have been sneaking "stealth inflation" by DE-CONTENTING their products: using lower quality ingredients, shrinking package size, killing taste.
This is a warning: CONSUMERS ONTO YOU!
This article would have been better if its focus was "What It Tells Us About the VIDEO DISTRIBUTION Industry." This goes well beyond cable providers, and any potential "unbundling" they might attempt.
Unbundling is already here in other parts of "video distribution." DISH's new SlingTV is just one example. Bits of the future video viewer's money will go to Netflix, some to DISH, some to CBS Online (announced last month), some to a paid YouTube access, some to a future paid Facebook video product (give it until spring 2015 for a launch announcement), etc. etc.
The new normal will be ~$5.99 for each of these, and maybe an upgrade ub broadband access for more speed (with a much higher monthly fee), and pretty soon it will all add up, so that...
just like in the airline industry...
the consumer will not notice that he or she is spending the same or more OVERALL to watch video (or fly) than before.
Unbundling is already here in other parts of "video distribution." DISH's new SlingTV is just one example. Bits of the future video viewer's money will go to Netflix, some to DISH, some to CBS Online (announced last month), some to a paid YouTube access, some to a future paid Facebook video product (give it until spring 2015 for a launch announcement), etc. etc.
The new normal will be ~$5.99 for each of these, and maybe an upgrade ub broadband access for more speed (with a much higher monthly fee), and pretty soon it will all add up, so that...
just like in the airline industry...
the consumer will not notice that he or she is spending the same or more OVERALL to watch video (or fly) than before.
1
When you figure out how to get your Comcast tv+internet down to $40, please post!
I went to down to "Performance" Internet and Limited Basic TV. Add leased modem ($8) and all the various fees and charges (state, FCC, Franchise, broadcast TV, etc. and the total is $77.99.
I asked a while ago about just dropping the TV, but I was told the Internet would then be $70+
Good luck with Comcast.
I went to down to "Performance" Internet and Limited Basic TV. Add leased modem ($8) and all the various fees and charges (state, FCC, Franchise, broadcast TV, etc. and the total is $77.99.
I asked a while ago about just dropping the TV, but I was told the Internet would then be $70+
Good luck with Comcast.
54
Have you considered purchasing your own cable modem so that you don't need to pay the $8 rental fee? You can get a cable modem for $50-$80 on Amazon.com, and so you'd breakeven in about 10 months, and cable modems typically last for years (when was the last time your cable modem needed to be swapped out due to a technology upgrade or because it died?).
Comcast's website has a list of approved cable modems; be sure to buy one that is compatible to your service. http://customer.comcast.com/help-and-support/internet/list-of-approved-c... Installation isn't difficult (you may need to call Comcast to register your modem). Good luck.
Comcast's website has a list of approved cable modems; be sure to buy one that is compatible to your service. http://customer.comcast.com/help-and-support/internet/list-of-approved-c... Installation isn't difficult (you may need to call Comcast to register your modem). Good luck.
5
Comcast is the nastiest and cheapest company around. A really bad infrastructure and lousy internet service. Buy an antenna and save a lot of money.
3
We got Comcast internet only in central NJ for 29.99 for the first year as an introductory offer, they raised it to 44.99 after that. I installed a well rated antenna in the attic and we get most major channels. Keep trying, good luck.
With the number of annoying ads. per program, TV should be paying us to watch their programs instead of the other way around. I quit watching TV. Internet is much better device for entertainment and time management....Good luck, advertisers and TV stations, especially Mr. FOXY....
49
Thanks for bringing this up. I cab see why the millennials are not wasting their time on TV. One third of the hour us irrelevant ads. Subscriptions go up, content goes down. What a waste of time.
12
> People who are tall or affluent may pay for the extra four inches in economy seating, for example.
And people who are tall and poor are just screwed.
And people who are tall and poor are just screwed.
103
And the persons sitting next to them
5
'And people who are tall and poor are just screwed.'
Actually, I feel folded, spindled and mutilated. Just what you are forbidden to do to an old IBM punch card. When I arrive at my destination, my brain is no longer readable.
Actually, I feel folded, spindled and mutilated. Just what you are forbidden to do to an old IBM punch card. When I arrive at my destination, my brain is no longer readable.
1
I think you missed the point If you were poor (tall or short) 25-30 years ago, you could not afford to fly
2
In short, you are saying that the folks who don't use cable very much should subsidize those folks who do use it a lot. I think a better philosophy is for people to pay for what they use.
25
Worse -- should cable subscribers who don't like sports be forced to subsidize the massive broadcast fees paid by ESPN, Fox Sports, regional sports networks, et al to the different teams, leagues, and conferences? Without bundled cable services, the business models of Major League Baseball, the NBA, and NHL will collapse (the NFL depends more on revenue from broadcast networks), causing athlete salaries to come back to earth, and undercutting the massive power of college sports.
This would be a massive force for good, as having non-sports fans subsidizing sports in the US is a major distortion in our economy, having ripple effects when municipalities are then conned into subsidizing new facilities for these massively profitable teams.
I love sports as much as anyone, but those who don't should have to subsidize my viewing.
This would be a massive force for good, as having non-sports fans subsidizing sports in the US is a major distortion in our economy, having ripple effects when municipalities are then conned into subsidizing new facilities for these massively profitable teams.
I love sports as much as anyone, but those who don't should have to subsidize my viewing.
149
Wise.
This is missing the fact that while average customer satisfaction has gone down, overall customer utility has increased. This is due to the fact that at the lower price points of the unbundled service, the airlines are selling to customers who have a lower marginal utility from the travel. However, there is still some utility they are receiving from it. So they are not just selling to those who would be very satisfied from their travel, they are selling down to those who are only a little bit satisfied and would not travel at higher prices. Customer satisfaction averages are missing the fact that there are many more customers at the lower price points and that those additional customers have a lower marginal utility as they would not have been willing to travel until the airfares came down. A lower average number is in many ways expected when you sell at a lower price point.
5
Your argument is false. Airline fares (excluding fees) are the highest they've been since 2006 adjusted for inflation, and far more people have to pay fees (families on vacation with luggage etc.). Source: http://www.rita.dot.gov/bts/airfares
Unbundling has nothing to do with consumers needs and wants (as demonstrated by the increase in dissatisfaction), rather with stealth price increases.
Unbundling also furthers inequality, as wealthy people can afford credit cards that waive fees (or fly enough to reach elite levels on frequent flyer programs) while the poor can't. Due to unbundling, the lawyer on vacation with the kids most likely pays less to the airline than the janitor and family sitting in the row behind him/her. But the airlines know that unbundling is hated so they'll take the hit on the lawyer in order to get his/her repeated business, while the janitor pays the extra cost.
In other words, in real life airline unbundling is regressive.
Unbundling has nothing to do with consumers needs and wants (as demonstrated by the increase in dissatisfaction), rather with stealth price increases.
Unbundling also furthers inequality, as wealthy people can afford credit cards that waive fees (or fly enough to reach elite levels on frequent flyer programs) while the poor can't. Due to unbundling, the lawyer on vacation with the kids most likely pays less to the airline than the janitor and family sitting in the row behind him/her. But the airlines know that unbundling is hated so they'll take the hit on the lawyer in order to get his/her repeated business, while the janitor pays the extra cost.
In other words, in real life airline unbundling is regressive.
61
Yes, and in "the olden days" the janitor and his family would not have been on an aircraft at all; they would've been driving in the family wagon to a nearby national park, amusement centre or relative's house instead of jetting across country to the destination of their choice.
It's absurd to say that current pricing fosters inequality; I well remember (and miss) when one would never encounter the sort of low-rent clientele one does today in the airport or on an airliner. Many more people from modest walks of life can afford to fly now than 20 or 40 years ago.
It's absurd to say that current pricing fosters inequality; I well remember (and miss) when one would never encounter the sort of low-rent clientele one does today in the airport or on an airliner. Many more people from modest walks of life can afford to fly now than 20 or 40 years ago.
Airline utility is up in Austin because Austin is a fast-growing market. What does that "utility" look like in places like Pittsburgh or Cleveland?
The cable industry might want to take note of one consumer's reaction to the 'innovations' in air travel. Where once I would fly on a periodic 725-mile trip, now I drive. Cable TV is, ultimately, just a stream of bits... and bits can be streamed a lot of different ways. The cable industry may unbundle, strictly in the pursuit of greater consumer satifaction, I'm sure, and discover that their consumers have fled to un-corded destinations.
19
And I've gone in the opposite direction - while I prefer driving the 750 miles to visit my father in FL, with an older car that gets 17/mph and the choice of flying RT for $200 on a discount airline, I feel compelled to fly. I'm willing to forego choosing my seat etc to cut my cost in half.
4
I get reimbursed for business travel at the lowest available rate (approximately), so if I want to do business travel and get any of the amenities mentioned in the article, it's out of pocket. Thus, my choice is to pay or suffer. In olden days I would have been reimbursed the full ticket price including a meal and more leg room. And nowadays, if you want to work on your laptop in a cramped cabin, you have to turn sideways with your face to the ceiling -- it's nearly impossible). Don't tell me we had no laptops in those days -- I know, and we worked on paper. Today it's hard even to find space for the paper to write on.
We also need to jettison agreements like the one ESPN has with the major cable providers REQUIRING them to provide it.