Originally Posted by bicker1
You're just talking pay movie channels? Okay that's simpler, but still if only a few people take the advertising free route, you've spent a lot of money building an offering, and taking up additional space on what is still scarce bandwidth, neither of which will pay off. People are just to price conscious, these days, to foster something like you're suggesting. Change society, and then I think you'll have a better chance.
People like you that have stated butcher them all you want, would easily pay $5 instead of $13 if you could because it doesn't bother you - remember.
Ads do not have to be HD - and are no different than VOD. Current technology exists that can map, say, virtual cable channe 701 (we'll call it showtime) QAM 99.100 to SHO-HD and remap 701 to QAM channel 99.800 when the credit start and during promos.
Now, let's say we are talking the difference between $5 and $13 ($8 for the reporters that view AVS with no math skills).
Showtime has about 1.5 Million subs, iirc. They might loose .5 to lower tier, but I fully suspect that the Showtime channels for $5 would increase subs 3 fold. I will be the first to admit that is speculation, but I think there are a number of reasons why it would be reasonable.
So lets say instead of 1.5 Million subs, Showtime goes to 3 Million subs....1 M at $13 and 2 M at $5 (I believe that HBO is 2.5 M subs, btw, but I haven't looked at those numbers in a year or 2 - and could be wrong - I am sure Fred will correct if wrong).
2 Million down for $8 less - that $16 Million Dollars.
You say, well, there ya go - they aren't going to take a $16 Million Dollar Hit a month.
And you are right - I agree with you. They won't.
Why, because CBS-TV has around $8 Billion in Ad Revenue a year......and as CBS-TV is now on the same side of the building with Showtime, when GM plops down $250 Million this month, they get GM to plop down and extra $2.5 for Showtime ads.
Simply stated, to bill $16M in revenue a month for people selling CBS-TV is NOTHING. And remember, you are talking about this ACROSS THE ENTIRE SHOWTIME PACKAGE OF CHANNELS - and quite honestly, there is already bandwith - you just run the commericals for example on SHO in Espanol and just remap that to the SHO for the lower tiers.
Truth be told, I bet that they can get FAR MORE than the $8 per sub per month in ads - which scares me a little that it might be TOO succesful and the higher tier idea goes away.
In fact, you could most likely offer the MSOs an extra buck profit each for the lower tier subs - for the remapping/switching etc and still come out a winner.
So people like you who don't about your Credits butchered and pop ups during the show, will get by on your $5 fee. Those of us who want a premium tier, will get the premium tier. Think of it as Caller ID for TV
And CBS can also take available space to promote their CBS Network shows.
So to recap, CBS/Showtime increase Showtime Subs around 2 Million, the are happy.
CBS Sellers are happy as they can use this for lower cost added value to bring in buys and gives them more airtime to sell.
Increased subs and increased revenue makes Wall Street happy so the CBS stock price goes up.
Showtime matches or passes HBO in subs.
2 more people sub to Showtime than did before so local cable operator is happy as he gets $1 and also has 2x the people ordering Showtime than they did before.
Viewers like you are happy as your Showtime bill dropped from $13 to $5.
Viewers like me are happy as we don't see the circus clown performance on Showtime.
In a rare event, no one is not happy with this.....its a win for everyone.
Again, the worse fear is that CBS can make ALOT more than $8 per sub on this each month and they get rid of the "leave it virgin" tier.
EDIT- OK, quit messaging me asking why do I think 2 million at least would sub to SHO LITE at $4 or $5. Looking at comparisons in several fields and the price of what people rent from Blockbuster.
Also look at the .99 cent to 2.99 CD Single that is often put on the checkout counter of music stores (yes, they still do sell some cds and dvds in america). When people are buying a CD or DVD from $10 - $15 and see a CD single on the counter for that price, they think what the heck and a number of them are actually moved - more than you would think.
It's no different than candy and the National Enquirer at the Supermarket Checkout.
$4-$5 for a movie package on top of your current cable bill is nothing compared to the competition of HBO, Starz etc for upwards of $15 each. And better yet, you have a comparison - its a $13 value (and some pay that), but you get it for $5....so it LOOKS LIKE as Howie would say A GREAT DEAL - a psychological and marketing advantage.
In its basic form (though not 1:1), instead of 1 movie rental, you get the entire SHO package of channels.
And quite simply, CBS/SHO would do consumer research prior to do anything like this anyway and see the exact impact on the current sub and what the potential would be.