Comments
Ariella
10/25/2016 8:28:39 PM
User Rank Author
Re: Unneccessary channels
@elizabethv sure, it doesn't make sense to pay more for a bigger bundle that just gives you more programs that are not on your watch list.
DHagar
10/25/2016 12:55:30 PM
User Rank Platinum
Re: But the economics say otherwise ...
@JohnBarnes, as always - good analysis.
Yes, markets can go off track and/or become bulldozers. My point is that when they end up - for a variety of reasons - bending to the tastes and interests of the consumers, they serve the better purpose.
Indeed, it requires the opportunities for consumers to influence those decisions and consumers to become engaged in the process. It further requires a level of public interest regulations and transparency to keep those systems viable and systems that people view as fundamentally trustworthy. And there are abuses at the extremes that if left unchecked will derail the markets. But in contrast to the controlled markets in countries such as Russia, North Korea, even to an extent China, the opportunity remains for the customer to become the driving force for commerce and change. That is the part I think represents good news.
JohnBarnes
10/24/2016 11:02:49 PM
User Rank Platinum
Re: But the economics say otherwise ...
DMHagar,
Well, markets are powerful, yes. They ensure a clearing price and a full allocation of production for pistachios, coal, pet rocks, barbers, and satellite launches. Unfortunately they do or did the same for bison tongues, egret feathers, crystal meth, child prostitutes, and hired assassins. Markets are a tool and a powerful one -- like fire, sharp blades, and explosives. So I'm not sure I regard the market working as "good news"; yes, good news, fire still makes food taste better and digest more easily, but is it also good news that it's an excellent way to hide the evidence after a crime?
DHagar
10/24/2016 2:52:37 PM
User Rank Platinum
Re: But the economics say otherwise ...
@JohnBarnes, great analysis! So the power of the markets works again - good news!
elizabethv
10/24/2016 3:44:44 AM
User Rank Platinum
Re: Unneccessary channels
@Ariella, thanks for sharing that! Though to be honest, I wouldn't be interested in a "skinny bundle" at $40. I only pay $25 for the basic SlimTV package and the kids channels add-on. Plus with Slim there is the option of On-Demand which costs no extra. With a cable "skinny bundle" there is likely no free On-Demand option and they would likely be more than happy to charge you for a DVR device. It may be "skinny" but at that price, it's not that much cheaper than the "fat" bundles. A viewer might as well just pay for the extra channels, there's more value there.
JohnBarnes
10/21/2016 10:56:47 PM
User Rank Platinum
Re: But the economics say otherwise ...
Dhagar,
Absolutely. It's also part of evolution and economic history alike that innovation happens out on the edges and more due to desperation than any notion of progress. So tough as it is on Verizon, it's good that they've gotten crowded hard enough to have to try something new; there's at least a chance that they will now find something that works.
JohnBarnes
10/21/2016 10:54:11 PM
User Rank Platinum
Re: But the economics say otherwise ...
ariella,
Yep. And some shifts are just not possible. Sometimes it's physical: much-asked-for features that would not be safe, or things people want that just can't be done. You could sell a lot of hoverboards right away if you knew how to make them, but unfortunately they will probably never be feasible (and if they were, applications like airplane landing gear and truly mobile homes would overwhelm the hoverboard anyway). And sometimes it's impossible under the rules of the economic game. Markets can't deliver a thing if its only stable price is free, and that might well be the case for a la carte television.
Ariella
10/21/2016 4:22:24 PM
User Rank Author
Re: But the economics say otherwise ...
< economic history is full of cul de sacs in which lie the ruins of formerly great companies. Sometimes you can give the people what they want and sometimes that is what will make money. Other times you can't do that and it will never make money. >
@JohnBarnes very true. Certainly, not all companies succeed in the end -- even if they start out doing well -- when they can't accommodate to market demands shifts.
DHagar
10/21/2016 3:00:04 PM
User Rank Platinum
Re: But the economics say otherwise ...
@Ariella, thanks for update. Yes, it is a delicate balance. And successful companies have to be low-cost - maximize profit margins, but create enough value that they don't just become a commodity with no value. So the key will be can they create the right access channels that preserve their margins but increasingly provide a competitive package that attracts customers with a better bundle.
I think the opportunity is there but is a tough nut to crack!
DHagar
10/21/2016 2:55:53 PM
User Rank Platinum
Re: But the economics say otherwise ...
@JohnBarnes, key points that highlight the reality that service providers must have a sustainable margin. And the tug of war has been with how to maintain the necessary profit margins, to support the buying and access to the content, which has required a large bundle. What it appears Verizon is trying is a new model that may create enough profit through more of a customized mass bundle - which could be a new model providing more choice while sustaining the profit margins.
What I hope will evolve will be a new hybrid that will give more customer-preferenced packages that are within limits of the realistic profit margins. In other words, I think there is more discovery and research to come to finding that "sweet spot". I hope Verizon is opening doors to new solutions.
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