30 Years of the Digest ... founded August 21, 1981
The Telecom Digest for June 2, 2012
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Date: Thu, 31 May 2012 22:52:54 -0500 From: Neal McLain <email@example.com> To: firstname.lastname@example.org. Subject: Re: Broadcasters Warn of Apocalypse in Dish's Ad-Skipping Service Message-ID: <4FC83C96.email@example.com> On Wed, 30 May 2012 12:59:30 -0700 (PDT) HAncock4 <firstname.lastname@example.org> wrote: > Cable TV providers claim they must raise basic rates 3% every > year to pay for programming received from 'free' channels, > e.g. USA Network, LifetimeTV, ABCFamily, AMC, Comedy, etc. > But programs on these channels are still loaded with > commercials, with even more than on traditional broadcast TV. > So, the viewer is paying twice. Why is that? I assume by "'free' channels," you're referring to programming carried on the basic tier, and for which there is no extra incremental charge beyond the basic-tier monthly fee. We've discussed this issue before. Here's a quote from a message I posted here in July 2007: | Because the programming carried on advertising-supported non- | broadcast channels doesn't generate enough advertising revenue | to cover the cost of producing it and delivering it. If it | did, broadcast stations and networks would be carrying it, and | advertising *already would be* supporting it. | | In order to support such programming, the producers and | program suppliers have to rely on two revenue streams: | advertising and subscriber fees. This is the same business | model employed by the vast majority of print publications. | | The real significance of this dual-revenue-stream business | model isn't just the sum of the two revenue streams; it's the | way in which the two revenue streams reinforce each other: | | - Consumer revenue reinforces advertising revenue. There's | an old adage in the advertising business that "paid | advertising is worth more than free advertising." A | consumer who pays for a publication (print or video) | is more likely to read/watch it than a non-paying | consumer. | | - Advertising revenue reinforces consumer revenue. | Advertising revenue enables the producer to provide a | better product (print or video), thus enticing consumers to | spend more time reading/watching it, and, by extension, | enticing more consumers to buy the product. | | And that, of course, is why the program suppliers demand that | non-broadcast advertising-supported channels must be carried | on the basic tier. Here's a link to my original post of 07/07/2007: http://tinyurl.com/7sgst82 Neal McLain Retired cable guy
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