WingNews

newbie789|5 years ago

That's an interesting perspective, but it kind of looks like a lot of graphs saying "You should pay for stuff you don't want because otherwise it would incentivize the sellers to price gouge you for the stuff you do want"

I'm kind of confused, if it's an adversarial relationship where the seller is going to extract as much money from you as possible in either scenario, wouldn't some consumers prefer to pay specifically to starve out content they'd prefer not to see?

Maybe I'm not understanding this page, but it looks like it's "good" for me because instead of paying $9-10 for the History Channel alone I'll be paying $11.70 for History Channel + ESPN (which I will literally never watch)?

I'm not a calculus genius but I'd prefer to spend less money and only have what I want. This model assumes that I'd be willing to spend $3 per month on ESPN, but how does the graph look if I were willing to spend $0 per month on it? Or hell, since pricing is arbitrary, I'd like to pay -$3 per month as a courtesy for having to scroll past content I genuinely do not want to consume let alone subsidize?

ridaj|5 years ago

The argument is not about your buying preferences as a consumer. Of course if you had a choice between (a) paying X for watching stuff, or (b) paying Y for the ability to watch exactly the same thing, but Y is overall less money because it is somehow dependent of the amount that you consume, that is the better choice.

However, the economic equilibrium of a perfectly unbundled system is not that you get to watch the same thing for less money. It is, in the general case, that you either get less content, or pay more, or both.

To take your example, realize that it is outlier behavior to be willing to pay $9/mo for History and $0/mo for ESPN. If you took History channel, with the content that it has now, out of the cable bundle and tried to sell it $9/mo, or even $1/mo, there would be way too few interested customers to make such a proposition economically viable.

In a perfectly unbundled world, content such as the History channel does not exist. You only have marquee content like ESPN, movies for rental or purchase, or (if lowercase history is your thing) highly produced documentaries, i.e. the kind of content that willingness to pay for is high enough to justify the high customer acquisition cost. You do not have content like History channel because it lies in that tier of things that many people are kind of interested in watching, but only if it comes with something else more valuable that they already paid for.

One can debate the societal value of the existence of content such as the History channel to begin with, but that's what the argument is about, not about the consumer's individual preferences in a hypothetical world where it would be possible to watch the same content for cheaper.

s17n|5 years ago

You aren't going to be able to spend less money though. Since there's zero marginal cost to adding extra channels, you should assume that the price you're getting charged isn't actually based on the number of channels you subscribe to.

A better way to think about bundle pricing is that the channels you really want cost $50, and they throw in a whole bunch of other crap for free. Why turn down free stuff?

listenallyall|5 years ago

Anti-bundling rants based on subsidizing unwanted channels are illogical. You're annoyed at paying for cable channels you don't watch but OK paying full freight for Netflix where you'll watch less than 5% of the available content? You're subsidizing the other 95%! Or that a-la-carte channel you want, you won't be watching it 24 hours per day so why subsidize programming that's on when you're sleeping or at work? Do you listen to every genre on Spotify? Use every machine at your gym? Drive on every road in your town? Read every article in the local newspaper (if your town still prints one)? Refuse to subsidize! Demand some money back!

Its not unbundling you really want, or a-la-carte, it's just a lower price tag.

FeepingCreature|5 years ago

> Or that a-la-carte channel you want, you won't be watching it 24 hours per day so why subsidize programming that's on when you're sleeping or at work?

You have correctly identified the business case for cinema and DVDs.

aswanson|5 years ago

There are certain channels whose content I feel causes societal damage. Namely, Fox news. Id happily pay a buck or two more to ensure not a dime of my bill subsidizes that channel.

mkhpalm|5 years ago

I'm not sure about other people but I don't "think" I want a la carte, I absolutely know I do. So much so that I don't pay for anything because nobody offers what I'm willing to pay for.

TulliusCicero|5 years ago

No you don't.

It's like saying that you'd be willing to pay for a $2/month Spotify subscription for only the genres of music you want. That's not how the economics work. Going a la carte would mean paying as much as a bundle, for less content.

The problem here is that people's mental models are fundamentally self-centered. They imagine paying half or less for just the channels they want.

But in total, that would mean media companies getting half or less the revenue, for producing the same content -- since the marginal cost of giving extra channels is basically zero, they don't gain any money back by giving you fewer channels. Now, media companies aren't that profitable, the math simply doesn't work out, they wouldn't be able to actually make all that content. Many channels would simply be cut.

cableshaft|5 years ago

I find it funny that people are arguing that you don't want this and actually want bundling services when you're flat out saying you aren't currently paying for what's being offered.

I don't even want a la carte, I'm fine with just "It's on Netflix/Hulu/HBO Max or I don't need to watch it." I'm not willing to pay more than $20 a month for TV most months, with the rare extra service to get caught up on a show I really like.

TylerE|5 years ago

Many of those channels you "don't want" actually subsidize the channels you do want.

kangaroozach|5 years ago

In aggregate sure, but individuals only care about optimizing their own purchase.

Ie more choice more better.

Personally I was pissed when my reward for early evangelization of YoutubeTV was a Hike from $35 to $50. But now that it’s $65, I’m donzo.

This will take people back to the days of torrents and piracy.

edoceo|5 years ago

Back to?

zucker42|5 years ago

I'm not a professional economist, but to my eye this assumes that if I'm willing to pay $10 for one channel and $3 for another, I'm willing to pay $13 for both. This seems like a bad assumption especially for media, because since TV channels serve as substitutions for each other; if I watch one I'm not going to watch another. I'm not sure if this simplification preserves the results.

rbritton|5 years ago

I’m actually more of a fan of a la carte content than channels. I typically spend $0-100/mo on TV shows and movies, which I strip the DRM from and copy into my permanent collection. In aggregate, I probably spend something comparable to what cable would cost. It’s all content I want with no filler or commercials, and I’m not held hostage by some subscription.

sails|5 years ago

This [1] article on the four myths of bundling agrees

[1] https://coda.io/@shishir/four-myths-of-bundling

Analemma_|5 years ago

Thank goodness I have economists around to tell me I'm wrong about my own buying preferences.

FeepingCreature|5 years ago

The economists are wrong about economics too.

That article is an absurdly oversimplified model. In the real world, the networks would find some way to diversify between the $3 and $10 channel offerings, letting them get $3 from the $3 person and $10 from the $10 person.

edit: Correction, they do mention this common and widespread approach... in a footnote. Without saying anything about why it wouldn't work.

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