David Lazarus had a column in Sunday Feb 21, 2016 San Diego Union Tribune entitled: "Want to have control over your cable bill? Move to Canada" On March 1st Canadian cable companies will be required to offer a basic bundle of local channels for around $25, and then offer individual channels or small bundles of channels for "modest" monthly fees. This will allow Canadians to tailor their channel package the way they want it. It will also prevent the cable companies from charging for channels we don't want, such as the expensive sports channels. The understanding is that all viewers are subsidizing the sports networks.
Cable companies are in somewhat of a "death spiral" -- As their rates go up, viewers are defecting to internet, netflix, hulu, amazon, and youtube types of viewing. As more viewers defect, the cable companies have to spread their overhead across fewer viewers, and are forced to raise their rates. Sports franchises make a large percentage of their revenue from TV licensing, and have continued to pay extremely high amounts to franchises, which in turn, allows them to pay extreme salaries to sports stars, and executives. If more viewers unplug from cable, or, in the future unbundle the sports channels, the cost to those who want to view cable sports channels will also have to rise -- another element of the cable death spiral.
This ala carte style of channel selection wouldn't have been possible until a few years ago. Now the technology is available, and cable operators are stepping up to building the capability with digital cable connections. It will be interesting to see how that works in Canada. If it works OK, I suspect that the concept might spread within the US as well. It is possible that the Canadian Cable operators will come up with a good pricing strategy that keeps many viewers. Conversely when viewers are faced with individual channel pricing, they may opt for a very minimum set of choices, and cable operators will be squeezed.
Cable companies are in somewhat of a "death spiral" -- As their rates go up, viewers are defecting to internet, netflix, hulu, amazon, and youtube types of viewing. As more viewers defect, the cable companies have to spread their overhead across fewer viewers, and are forced to raise their rates. Sports franchises make a large percentage of their revenue from TV licensing, and have continued to pay extremely high amounts to franchises, which in turn, allows them to pay extreme salaries to sports stars, and executives. If more viewers unplug from cable, or, in the future unbundle the sports channels, the cost to those who want to view cable sports channels will also have to rise -- another element of the cable death spiral.
This ala carte style of channel selection wouldn't have been possible until a few years ago. Now the technology is available, and cable operators are stepping up to building the capability with digital cable connections. It will be interesting to see how that works in Canada. If it works OK, I suspect that the concept might spread within the US as well. It is possible that the Canadian Cable operators will come up with a good pricing strategy that keeps many viewers. Conversely when viewers are faced with individual channel pricing, they may opt for a very minimum set of choices, and cable operators will be squeezed.
