Cable's New Brilliant Idea: Charging You More Money To Skip Ads
from the same-shit,-more-money dept
We've noted for years how cable executives facing market (r)evolution just can't stop making bone-headed decisions. As cord cutting accelerates and ratings take a dive, many cable and broadcast executives have decided the solution is to stuff more ads than ever into every viewing hour, in some instances actually editing down or speeding up programs so the additional ad load will fit. That's of course when they're not busy trying to prevent users from using modern technologies like DVR ad skipping, relentlessly raising cable rates and perpetuating some of the worst customer service in America.
Quite often, cable executives try to obscure the sector's dysfunction by pretending to be innovative, and hoping nobody can tell the difference. The latest case in point: FX Networks has struck a new deal with Comcast that lets viewers avoid ads on some FX programs -- if they're willing to pay another $6 per month:
"For an extra $5.99 a month, Comcast Xfinity customers will be able to receive the FX+ video-on-demand platform with up-to-date episodes of FX’s original programming, including “American Horror Story,” “Fargo,” “The Americans,” FXX’s “It’s Always Sunny in Philadelphia” and older FX titles such as “The Shield” and “Nip/Tuck.”
“This initiative represents the first of its kind for an ad-supported cable network, and begins to put us on equal footing with premium networks and streaming services,” John Landgraf, chief executive of FX Networks, said in a statement.
There's several problems with this "premium," Comcast-exclusive effort. One, users are incredibly fed up with paying too much money for bloated bundles of channels they don't want, and raising prices in any fashion at this juncture is simply a bad idea. Two, these Comcast customers can already skip advertisements on FX programming by using a DVR, making paying an additional fee to do the same thing uninspiring. There's also a notable caveat with this effort: the ad-skipping only works on some FX programs, namely the ones the channel hasn't already licensed out to other streaming competitors like Amazon, Hulu and Netflix.
AMC Networks offered a similar initiative last month, also letting Comcast customers pay even more money to do something they can already do. In some instances these are broadcaster efforts to set the stage for their own more fully-functional streaming services in line with Netflix or Amazon. But every channel from FX to AMC having their own streaming service presents its own problem: namely one of fractured exclusivity. Or, a world where you have to subscribe to a litany of multiple, costly services just to get access to your favorite programs.
On the surface these efforts are designed to give the impression that the cable and broadcast industry are rolling with the punches and adapting to the streaming video era. But the act of charging more money to do something users can already do, combined with raising rates at time when cord cutting is accelerating only really accomplishes one thing: drive users back to piracy where avoiding ever-growing ad loads can be avoided entirely, for free.
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Filed Under: ad skipping, cable, fees, tv
Companies: comcast
Reader Comments
The First Word
“For claiming Netflix to be a mortal enemy, the old media is doing more to make it look like a massive bargain than any amount of advertising Netflix could ever do.
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All in the name of giving customers choice and convenience, of course.
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You could have stopped right there and still been accurate.
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BHAAHHAHHAHAHHAHHHAHAAA!!!!
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As bad ideas go, it's rare for a company to come up with one that will have both advertising companies AND end consumers in the same class action.
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50/50 Cut
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We'll charge you money to skip ads... except for on the program that we already licenced to competing services that (mostly) don't show ads. In which case we'll just give you a worse service than those competitors? Yeah, that's a winning formula...
"But every channel from FX to AMC having their own streaming service presents its own problem: namely one of fractured exclusivity."
Yep. Nobody is going to pay for every single show they want to watch if it means paying for a long list of competing services just because they each managed to get exclusive deals. They'll either do without or pirate, not pay a whole new sub for one show.
I see this already. Netflix didn't get complete worldwide licences for some of their early shows, so things like Orange Is The New Black and House Of Cards have delays for some seasons in some countries before they make it on there. People who watched the first couple of seasons at the same time as everyone else suddenly have to wait an extra year because someone else snapped up the rights to the next season.
Do people who were already watching OITNB on Netflix rush to get a new Movistar subscription because they have the rights to the next season? No, of course not, they either watch something else or pirate the new one, often guilt free because they believe they already paid for it with their subscription. You can argue all day as to whether this is correct, but that's how customers are doing it.
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Do those shows have good ratings?
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In my opinion the most annoying way cable has tried to look 'innovative' is throwing HBO for free for a year onto their offerings. I mean it's literally in almost every cable ad lately. They seem to think offering HBO for free for a year proves they're innovative.
But unlike most of the cable channels, you can buy it online with HBO Now without a cable subscription. So... what do we need to have it bundled with a costly cable subscription for?
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Pepperidge Farm Remembers
My how the times change.
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Re: Pepperidge Farm Remembers
When exactly was that? It evolved from Community Antenna TeleVision (CATV), and the "point" as I understand it was that it solved antenna reception difficulties due to distance, mountains, etc.—but it had exactly the same channels you'd get with a good well-located antenna. Evidently they were captured off the air without payment until 1992.
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I remember the point of cable television was to get commercial-free channels, such as HBO.
And in return, cable channels got their income from subscribers not advertisers.
But then channels like TBS and WGN came along as decided they could charge customers to be on "extended cable" service *and* charge advertisers for commercials.
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So let's see...$6 per month per channel (if this trend gains steam) to skip commercials, or just use the DVR...
Did someone at FX really sign off on this marketing campaign expecting an ROI?
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Another side of the three sided coin
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"This initiative represents..."
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Subscription services should be ad-free
If I'm paying for a "Subscription" (Cable TV, Internet, Sirius/XM, Pandora, etc.) I expect an ad-free experience. I really hate it when I'm listening to certain XM channels and I get a commercial. I'm paying you so I don't have to listen to those.
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Now if you subscribe to some content site, such as Pandora, then you would be correct about the Internet. The content subscription, for that site, should be ad free at that point.
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Admittedly, these ads were clever and topical enough to be amusing the first time or three I heard each one - but there were only so many different ones per station (and I only cared for a handful of stations), and they played about one such ad for every two or three songs, so the repertoire quickly became stale.
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Hulu got their first (pay more to be adfree).
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For claiming Netflix to be a mortal enemy, the old media is doing more to make it look like a massive bargain than any amount of advertising Netflix could ever do.
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$6 for skipping the ads?
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Remember how everybody wants a la carte cable? That's exactly what you're describing (except streaming is on-demand as opposed to network-scheduled). I've always wondered why people who think cable prices are too high already are deluded enough to believe that somehow you're going to pay less with a la carte.
Let's say ESPN charges Comcast $10 per month per subscriber. Comcast has about 22 million subscribers. That's $220 million per month. In moving to a la carte, ESPN's relatively-fixed costs (content production and acquisition, physical premises, etc) wouldn't change, but the number of subscribers paying for the channel would. Let's be generous and say 75% of Comcast's subscribers would still be willing to pay for ESPN on an a la carte basis. But now you're dividing $220 million by 16.5 million subscribers, so suddenly the monthly cost per subscriber is $13.33. Some channels will likely cost less, and someone who really only wants one or a couple of networks will pay less overall. But in a family you're likely to have a diversity of networks that are demanded, and even if you "only want" 15 channels, and even if each network is only $5.99 instead of $13.33, that's still ~$90 a month, and my estimates are probably low. How much is your cable bill right now?
And of course none of the above paragraph takes into account the more niche channels, which today are included in a package of "We'll give you MTV if you take the fishing network" (made-up example). Yes, MTV might only cost $5.99 a la carte because it's got a larger audience to spread costs across, but how much do you really think the fishing network is going to cost when it can't be subsidized by being included in a larger package?
Separately from all of that, the original article this is based on is written very poorly, which in turn probably caused the article here to be pretty off-base. This new service is a "channel" only in the way that your electronic program guide is a "channel". You can use your TV remote to get to it, but it's not a channel broadcasting a linear schedule of content. Because you go from the premise of it being a channel, you act as if this is simply like HBO the channel, which is linearly-broadcast but has no ads. Instead it is a service much like HBO GO - it's an on-demand service, and Xfinity has apps where you can watch subscribed channels on other platforms like phones and tablets, just like HBO GO does. And as with HBO GO, the primary benefit is on-demand access to the shows (some of which are archival content) on the platform you want.
After finding the original press release, which does not use the word "channel" to describe the new service at all, you do need to be an Xfinity TV subscriber to subscribe to FX+. So it is paying extra for the service when you already pay for the base channel (you can't just subscribe to Xfinity Internet and get FX+), but again it is paying for an on-demand service, not for a linear network devoid of ads.
You can make the argument all you want as to whether the public is willing to pay (extra) for VOD for a single network, but to write the article as if you're paying FX again to get their exact existing network, simply sans ads, is just straight-up bad journalism. Again, probably based on the source article's repeated use of the word "channel", since of course if it has to do with TV, it must be a channel, completely ignoring VOD which has been around for decades (and which this service is), streaming services, etc.
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Like someone else noted earlier....
I think the last show I watched on cable TV was a Discovery show - I mis-remember which now. I haven't watched television since 2005 or so, when I got fed up with 99.9999% of the providers and Hollywood. These days, I read, study, or (rarely) watch hobby DVDs that are mostly self published or You Tube videos of the same.
I'm in a club with others that purchases series DVDs of old programs and binge watch those, then pass them on.
Seriously - a 40 minute episode with 20 minutes of ads? "Nobody got time for that!"
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Re: Like someone else noted earlier....
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1) These cunts wont see a cent.
2) I'll never see any ads.
3) My user data is not being collected and monetized.
4) Everything I want is in one place and my user experience is exactly what I want it to be.
I'd be happy to pay if they were offering something worth paying for. I want to support creators. I don't want to support these bandits. And I don't want to pay for something that is far worse than the free alternative.
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I bit the bullet
I was off the "cable/satellite" train until my cable ISP was stupid and implemented caps. AT&T (BOOO....HISSS) offered DirectTV and Internet with no caps for less than what I was paying a month+overages. While I was hesitant to get back to using a satellite, the no overages are worth it. I still use XBMC/Kodi and the kids have Netflix and YouTube, but the channels on Direct supplement it. The best thing about having DirectTV now is that we can watch Game of Thrones without having to wait an hour or so after it airs. Other than that, I'm still able to watch what I want, when I want using Kodi or DVR what channels we do have. I feel dirty, but it's saving us money.
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Cable TV Commercials
Karl Bode wrote a great article about the number of commercials on cable TV. I remember in the 1970's that cable TV didn't have commercials because they were a subscription service. Free TV made its money by running commercials which totally makes sense. However today cable companies charge for TV Service and make a ton of money running commercials.
When I watch cable TV, am I paying for everything they send down the cable including a ton of ads? If so, what are they charging me for? Shouldn't my bill state what percentage of cable programming is commercial advertising (cable co revenue stream), and what percentage is programming? On top of all this, the cable company sells data on what programming I watch. They're out of control!!
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