Tuesday, November 23, 2010

Some prescriptions for the Pay TV Market Operators especially the MSO's

I have been doing a lot of reading, discussing with industry peers and plain old thinking for the reasons why Pay TV operators are facing declining subscriptions and what needs to be done. I have come to the following conclusion.

* The Consumers are fed up with meaningless packages and tiers which only end up in costing the consumer more and hence their dropping tiered Pay TV. If a certain consumer wants just basic channels and local channels of acceptable quality, he/she should be able to get them at a reasonable cost.
* The consumer has always demanded a la carte - i.e. programs/channels that they want to subscribe to with their hard earned dollars, as opposed to the meaningless mind numbing drivel (according to them) that passes for Pay TV.
* The newer delivery methods such as the Internet and Mobile are giving the consumers a chance for retaliating against the entrenched industry practices (as reflected by consistently poor customer service).
* The huge lobbying and the specious arguments that these companies put up to the FCC and the Congress, followed by intensive lobbying for preserving the status quo at the expense of the consumer
* Availability of OTA and OTT has prompted a rethink in many a consumer's mind on the usefulness of paying for  Pay TV
* Neither the FCC or the legislators of all stripes tell the Broadcasters and Pay TV Operators to negotiate in good faith and come up with innovative consumer friendly television
* If the reason for the increase in Pay TV is because of increase in costs of channels being provided to them by the Broadcasters/Programmers, then the Pay TV Operators (in good faith) need to use their industry forum(s) and group(s) to negotiate pricing using the free market principles and not just pass on the costs to the consumer.
* The cost that could be saved by going "a la carte" is deliberately overlooked at the worst and grossly underestimated at the least by Pay TV Operators. The costs for both Pay TV Operators and Broadcasters who provide content should be directly proportional to the popularity of the content (that is why the ratings exist) and the eyeballs that they capture (to garner ad revenues).
* Move delivery of Pay TV content to alternative platforms (such as Internet - Netflix, etc..and Mobile as applications over smart phones (iPhone, iPad, BB, etc..) where consumers are willing to pay for the content and access them on an on-demand basis.
* Study after study shows that advertisement revenue rising on the alternative platforms and declining on the conventional delivery methods. The Pay TV Operators and the Broadcasters should take advantage of this and move their channels to the newer technology platforms
* Customer service is shoddy at best (especially in case of MSO's), and not that very good in case of Satellite operators with FTTH operators (e.g. FiOS, Uverse) being better than the others. This should open their eyes but it seems that as they grow larger, they continue to ignore this, if not deliberately then by default - which again leads to loss of consumers willing to pay for the service.


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