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The Telecom Digest for June 2, 2012
Volume 31 : Issue 133 : "text" Format
Messages in this Issue:
Re: Broadcasters Warn of Apocalypse in Dish's Ad-Skipping Service (Neal McLain)

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Date: Thu, 31 May 2012 22:52:54 -0500
From: Neal McLain <nmclain@annsgarden.com>
To: telecomdigestmoderator.remove-this@and-this-too.telecom-digest.org.
Subject: Re: Broadcasters Warn of Apocalypse in Dish's Ad-Skipping Service 
Message-ID: <4FC83C96.7050104@annsgarden.com>

On Wed, 30 May 2012 12:59:30 -0700 (PDT) HAncock4
<withheld@invalid.telecom-digest.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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