Greedy Content Increases Your Cable Bills

Peter : On Rad's Radar?
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

Greedy Content Increases Your Cable Bills

As much as I have a mad on for the ILECs, in this case, folks need to know that the content companies are the ones increasing your TV bills -- not the cable or telco.

Bundling is a tactic that the content bullies use to force 7 ESPN's on you or the Speed channel or other nonsense. ESPN - owned by Disney/ABC, just one of the 6 - yes 6 - companies that own most of the media content - requires cablecos to carry all 7 ESPN channels AND that two have to be in the general package, so that they can bill for every subscriber that the MSO has.

Frontier demonstrated that FiOS TV was unprofitable, when it took over VZ territories in 2011.

AT&T is buying DirecTV for a couple of reasons and one is to get more bargaining power on TV content. (Another is the presence of DTV in Latin America.)

ESPN sues Verizon over its plan to create slim bundles of cable channels.

No idea how Sling TV by DISH isn't being sued (unless DISH has better contracts with the content guys).

Cablecos had the least profitable service - TV - and used their extensive network to move into the profitable circles of Internet access and voice. It is all gravy on their networks - even after DOCSIS upgrades.

Meanwhile, telcos like VZ, Frontier, CenturyLink and ATT, went from highly profitable voice and data on copper to spending billions on fiber and other network upgrades to support TV. They had to buy TV head-ends and other equipment to even offer TV. Then negotiate content/carry contracts. For a service that was less profitable than legacy services. Oops!

When the studios pay $100 million for a movie or $1 million per episode for an actor on a sitcom, they intend to recoup those cash outlays twofold. When NBC bids billions for a multi-year Olympics coverage or the networks pay the NFL $6 Billion per year, they expect a return on that spend.

And you wonder why they get mad about piracy or have gates up on websites or don't let you unbundle channels that no one watches or you can't buy it a la carte. The whole business --- especially Disney -- is about make it once and sell it over and over and over. Think about how many times a Disney film is released and re-released in theaters and on DVD.

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