[opendtv] Re: 247wallst.com: Pay TV Shows Troubling Subscriber Trends
- From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Thu, 18 Sep 2014 08:35:06 -0400
On Sep 17, 2014, at 7:52 PM, "Manfredi, Albert E"
<albert.e.manfredi@xxxxxxxxxx> wrote:
>
> Think, Craig. People are fed up with high cable rates. People are dropping
> their subscriptions. Cable increases their rates further to keep up their
> profit margins. More people drop their subscriptions. Cable increase their
> rates even more to compensate. More people drop their subscriptions.
It is an oligopoly Bert.
Yes price does effect consumer behavior. So does the state of the economy,
which is still trying to recover.
But the declines in subscriber rates are not as horrific as you imply, and are
stabilizing as the economy limps along.
There is nothing to indicate an imminent collapse, and people WITH money are
adding services like Netflix.
>
>> The congloms create positive feedback by adding services ...
>
> You misunderstand and confuse the term.
>
> Positive feedback means that you do to the input what the output is doing. So
> for example, in an amplifier, if the output is heading downwards, you feed
> that downward signal back to the input signal, i.e. you reduce the input
> signal. This causes a further reduction in the output signal.
Thanks. Once again you undercut your own argument by using an inappropriate
analogy.
For the MVPDs, authentication is ADDING to the input - the customer is getting
additional value, which is counteracting the perception that the service is
overpriced.
>
>
> Cable companies increasing their rates causes people to drop subscriptions.
> If they increase rates even more, they exacerbate that effect. To counter the
> exodus, cable would have to reduce their rates, offer other bundling options,
> or what have you.
It's not that simple. New homes continue to increase - they get a percentage of
these. Existing homes may cut the cord. When the economy is bad this may cause
net losses. Now we can add in the impact of new competitive options and changes
in behavior amount the youngest audience. The algorithm is complex, and one
must carefully manage the decline.
Look at how long broadcasters have held on in the face of a massive decline in
their audience Bert. Retrans consent has created negative feedback to use your
analogy.
Soon we will learn just how viable the broadcast industry is, and will continue
to be, as the spectrum auction provides an economic incentive to exit or
consolidate. Me thinks there will be plenty of room in the stable for the
telcos...
Regards
Craig
>
> Bert
>
>
>
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