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The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.
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3 years ago
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3 years ago
From the perspective of economic efficiency, what matters is the marginal cost to the economy as a whole, and that's clearly 0.
What I was talking about in the previous comment was the idea of metered TV access. In that case, the marginal cost is zero--it costs as much to watch 1 hour of MTV as 100.
3 years ago
There appears to be a middle ground (somewhere between pure a la carte and the bundled system we have now) that no one is exploring.
3 years ago
Except there is one issue that is being forgotten--Cable is exists in a non-competitive environment--I can't go to company B or C, I have to take what Cable Co A offers, or take no Cable.
But the issue will resolve itself--people can now get programming over the internet that is much more finegrained than channels--individual programs for sale.
If there is a market demand for a more fine grained price structure, with less bundling (and there certainly is the demand) consumers will get what they want. Cable Companies of course will resist, because now they are extracting monopoly profits, but the competitive pressures form other media will force them to be competitive.
The basic fallacy of Tim Lee's argument is that it only looks at the side of the producers (an error common among planners in command driven economies, but I am surprised to see it here) and not those of the consumer. The consumer wants to pay as little as possible, and if an individual program is for sale on the internet for $2.00 and that is what the consumer wants to buy, it the producer (the cable company) that has to adapt to the market place.
3 years ago
This generates more revenue for the cable company because it can charge wealthier customers a higher price without scaring off poorer customers.
In contrast, a la carte cable isn't a market segmentation scheme. Under a la carte, the family that buys Fox News and ABC Family pays the same rate as the single guy that that buys MTV and VH1 (or whatever). So it doesn't generate any extra revenue for the cable company.
The argument for a la carte is always, at least implicitly, that it will lower consumers cable bills. My point is that it won't, and I think that, if anything, the example of cable tiers reinforces that.
enigma_factory: there might be only one cable company, but virtually every customer has satellite TV as an alternative. And the Baby Bells are frantically laying fiber to get into the video marketplace. And I think it would be great if competition from Internet video forced the cable industry to lower its rates. I just don't want the government to do it.
3 years ago
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3 years ago
Either by regulation of a monopoly or by competive pressures in the marketplace, a la carte will become a reality
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