Recently The New York Times revealed how much the typical cable operator (TWC or Comcast) pays per month for ESPN. For each subscriber the operator pays $5.54 for ESPN and .70 for ESPN 2–a grand total of $6.24 per month. This adds up to a lot of money that ESPN takes in every month from the operators.
Of course, we pay for this (with a small markup from our cable operator no doubt) as part of our basic cable bill each month. Let’s assume that we pay at least $6.50 per month for the privilege of watching ESPN (and ESPN 2). We pay, of course, whether we watch it or not. This is done without our consent–because if we want basic cable–we must take ESPN (and ESPN 2).
We are also forced to watch ads when we watch ESPN. It is not enough to take our money without our consent. We have to give some of the time we paid for back to advertisers so they may hawk their wares with commercials as well as sponsorship opportunities within the shows themselves.
Think of this example broadly as the “3 strikes” of cable television. They are,
1. The fee I pay is hidden–because the price for ESPN is never revealed to me on my cable bill or contract.
2. I am forced to pay–I have never been asked if I want ESPN–I must take it.
3. Advertisers take time from my viewing (that I have paid for).
I understand that networks have to make money in order to license and create their programming. But I am in favor of a clear consumer proposition.
Here are two propositions that I like.
1. If you want to give me programming for free then I will watch advertising. This makes sense because I am giving (or lending) my attention to your advertisers (who in turn are paying you for my attention) in exchange for your programming.
2. If you want me to pay for programming I am happy to do so if–the price is right and I get to decide whether or not to buy it. This makes sense because I am exchanging my money for your programming and it is a transaction transparent to you and me.
So either I give you my attention, which you monetize thru an advertiser or I give you my money, which means you monetize me directly. Simple, right?
This does not seem too much to ask. Surely this is Customer Service 101.
Unfortunately over time these two very clear propositions have become mixed in with each other and also become hidden, which creates a bad situation for consumers but a very profitable one for media companies.
ESPN is just one example of how today’s media world is too muddled for its own good and shows how a media company can extract maximum dollars from its customer. The questions remains though, does it provide maximum value to its customer?
This cobbled together cable delivery system that includes cable networks and broadcast networks does not understand that its end user is the person who pays the bills.
That person is not the cable operator. It is us– those millions who watch and pay for the content and are given very little choice about what we watch, how we watch and if or how we pay.
Let us look at the latest dispute between CBS and Time Warner Cable. Allegedly CBS wants to increase its subscriber fee from .66 to $2 per month. So we have a company that is granted free spectrum by the US taxpayers that provides us with ads on all of its programs (and which means we grant them our attention in exchange for free viewing) and wants to charge us $24 per year to watch their programming.
Why should I pay more for a network that used to be completely free? Are they providing me with special programming that is better than what they had before? Are they reducing the number of ads they run because I pay more upfront? Are they providing additional value to me? The answer is no.
As a TWC subscriber I have not been able to watch CBS for the past three weeks.
Funny thing is, I have not missed it.
Perhaps because I am spending a lot more time on Netflix. You know, that service that tells me how much they cost, ($7.99 per month), that creates great original programming and whose entire content library is available to me any time I want, on any device I want–with no ads!
I think they call that providing maximum value to your customer.
CBS and ESPN ought to take note.