[mythtv-users] All clear QAMs gone in Portland, OR
Joseph Fry
joe at thefrys.com
Mon Nov 4 18:57:25 UTC 2013
>>> Customer A values the channels at $3 and $8, while customer B values
>>> them at $8 and $3 respectively. If bundled in a $10 package, both
>>> customers will buy the bundle and receive services they value above
>>> the cost of those services. If unbundled and priced at $5/each, each
>>> customer will only purchase only one channel, neither of which will be
>>> profitable and both will fail. It's lose-lose-lose as the channel
>>
>> Not quite. Many people will buy many different channels. It's a large
>> market and there's plenty of room for different options. Not every option
>> may survive but that's just basic capitalism.
>
> Clearly, I've failed to make my point. Looks like a professorship in
> economics is not in my future.
>
In your model, if 50% of a potential customer base values a product at
$8 and 50% values it at $3... they will charge $8 as going lower than
that will not gain them any more revenue... to get both consumers they
would have to go to $3. So they will cost $8 each. This hurts the
consumer as they will no longer have access to the lower valued
channel unless they are willing to pay more than they think it's
worth.
However your model is way to simplistic. In reality you would use a
much larger sample size to find optimum pricing and set your prices to
achieve the highest revenue, which typically means lowering your price
to attract customers when it will result in having more customers.
Say 10 consumers value a channel like $0, $0, $2, $3, $3, $4, $5, $6,
$8, $8. The sweet spot is $4... as they would make $20 from 5
viewers... anything else and they lose revenue and/or viewers.
Bundling hurts both consumers and the networks that produce shows.
Bundling leaches money from consumers to the point that consumers
cannot afford the products they desire. For example... I have basic
cable, so there are a lot of channels I don't get. There are a few I
would love to have, but this means I need to pay for the next tier,
and perhaps the one above that. So to get a few channels my bill goes
from $50 to $120 per month.... I will NEVER pay that. Therefore any
channel in the top teir with my provider will NEVER see my money.
However I would be happy to pay $60-$70 per month if I could get those
few channels.
Consider this... imagine your favorite fast food restaurant shifts
from ala carte $4 salads/sandwich plus $2 for fries and a drink to
meals ONLY where you can get a meal for $5. But you want just a
sandwich and a salad. Would you buy two full meals just toss 2 orders
of fries and 2 drinks or would you just choose one or the other and be
less satisfied? The resturant could have made $8 off you, but because
they bundled, they only got $5. Bundling forces people to pay for
things they don't want... which in turn makes it LESS likely that they
will spend their money.
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