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Comment by knightofmars | Hacker News Reader

This is all my opinion, I've never understood cable television. You are paying for someone to provide you with advertisements. Sure, you get a lot of channels and content but how many channels does the average person watch and how often are you just turning on "something" to have on? I've never paid for cable but as soon as Netflix DVD delivery came along I was on board and haven't looked back. Going back to watching television with advertisements is akin to nails on a chalkboard now. Which is odd because I still use free Pandora and have no problems whatsoever with their advertising.

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> You are paying for someone to provide you with advertisements.

As was the case with newspapers and magazines for hundreds of years, as well as more and more subscription-based sites today.

The advertisements defray the cost of the thing you are paying for. If they weren't there, you'd have to pay much more for it.

  The advertisements defray the cost of the thing you are
  paying for. If they weren't there, you'd have to pay much
  more for it.

Given that cable with ads averages over $100 a month [1] while Netflix without ads charges $14 a month for the most expensive package [2] I think the purported cost savings from having ads are not in evidence.

[1] http://fortune.com/2016/09/23/average-cable-tv-bill/ [2] https://www.theverge.com/2017/10/5/16429126/netflix-price-ra...

The corporate argument is that advertising pays for the content while consumers pay for distribution. So the Netflix equivalent is your ISP price (distribution) + Netflix subscription (content).

In practice, media consolidation is just shafting consumers with more ads and service costs... both due to regulations that protect inefficiencies and sheer corporate greed.

Netflix is making a loss, they are burning investment money trying to stake out their territory, that won’t last, expect increases in costs or ads in the future.

Nonsense. The cable company is a local monopoly charging what the market will bear. Their costs are a tiny fraction of what they're raking in.

While in theory this makes sense the underlying profit motive of the companies being discussed lead me to believe that reality will not conform to the theory. The major cable companies can push upwards of 90% profit margins. If what you posed was true, then wouldn't the cable companies set a maximum percentage for their profit margins (e.g. 30%) and return the gains in the form of reduced cost to the consumers? Additionally, these companies often have their infrastructure subsidized by our tax dollars which further enhances the the actual profits being realized by these companies.

Is it really much more though? Whenever I see a number for how much an advertiser pays per viewer, it is typically small.

My quick attempt. I'm sure there are better sources of this data.

Let's say an average of 30 hours of consumption per week per person. [1] In a household of 4 people, that's 120 hours per week.

"[Nielsen says the average commercial minutes per hour] was 16 minutes/8 seconds for cable network programming." [2]

Assuming 30 second commercials, that's 32 commercials per hour, or 3,840 impressions per week. Across 30 days, that comes out to be 16,457 impressions.

"$24.76 - The average cost of a thousand impressions for a 30-second commercial in broadcast prime time in 2014, down from $25.06 in 2013." [3]

$24.76 per mille * 16.457 mille views/month/household = $407. That feels unreasonably high. If the CPM were $2, it would still translate to $40/month.

[1] https://www.marketingcharts.com/featured-24817

[2] https://www.mediapost.com/publications/article/308248/shorte...

[3] http://adage.com/article/news/costs-ad-prices-tv-mobile-bill...

30 hours per person per weeks seems absurdly high to me - that would be one 3 hour program every week-night, two (6 hours) on Saturday and three (9 hours) on Sunday.

I would be really keen to see what some actual values are, and the breakdown by age group.

I've recently moved into a new place and we haven't even wired up the TV arial, and even with a Netflix subscription, it's mainly for the kids shows - and even then we heavily restrict the amount of time they can watch TV.

Consumption for my wife and I now is generally Netflix if they have a show we like, or Plex for specific shows we can't get on Netflix - even then this would top out at _maybe_ a couple of hours a week.

Time on reddit/hn is a completely different story...

Link #1 above has the breakdown by age group, by quarter, going back a number of years. It forms an interesting "fan" shape with the older generations watching more and the younger generations watching much less.

And if we had a-la-carte we wouldn’t have to pay for/subsidize channels we don’t need.

ESPN, I’m looking directly at you.

Instead you'd pay for/subsidize shows you don't need... The only true a a-la-carte model is to pay for episodes individually. Which you can do on Apple TV / Amazon.

The price inflation is ridiculous for individual episode purchases. Right now to purchase Jessica Jones season 1 on itunes it will run you $30 for the set or $3 each for thirteen episodes... To contrast netflix costs $9 a month (with the first month free) up here in canada. The prices aren't even close to comparable and people can see that clear BS as plain as day.

I'm not sure why you're surprised that Apple can't beat Netflix pricing on Netflix's own content...

But yeah, a-la-carte is always more expensive than bundles. That's true of episodes, or channels, or whatever else.

Well yea, if, for instance, it cost $6 or so to get the season through itunes then that would be clearly higher but not yet stupid... we're not talking about the price scaling for buying things in bulk, itunes it just asking you to burn money for no reason... It is cheaper to get all of netflix for a month than three episodes of a show on netflix. That price step moves us beyond "more expensive" into crazy land.

It's hard to say without knowing the terms of the agreement between Netflix and Apple. If I were Netflix I wouldn't allow them to sell it for cheaper than me.

That's fair, and there's nothing compelling you (if you were Netflix) to even make them available to Apple to sell. There can absolutely be market reasons to do this, but if you were a farmer with a farm stand next to a grocery store who sold corn for $3 and allowed the grocery store to sell "Corn grown by Touche, also for sale out the door and around the corner for $3" at a price of $200... there isn't anything illegal there, but it's stupid.

You might do this because you get the occasional sale through the grocery market (convenience) and the grocery market would probably be happy to participate if it only had to settle up when an actual sale occurred... but I think reasonable people looking at this situation could all agree that it's stupid.

I don't know how you could be so certain of what the price of a single episode should be. There's so many factors outside of what Apple chooses to price them at. It might even be possible that Apple has no say in how it prices episodes. That is the case (or used to be the case, at least) in the book industry.

Are individual episode prices high or are bundle prices low? Remember that Netflix can sell Jessica Jones Season 1 for so cheap because people who don't care about and will never watch it are paying for it.

I was under the impression that Apple's price would depend on their agreement with Netflix, and would reflect some amount Netflix thought was reasonable. If this were the case, maybe Netflix is trying to drive users towards them? Why would Apple agree though? Because they could possibly profit highly?

"a-la-carte is always more expensive than bundles"

And yet, people bitch about the price of bundles.

Aka Disney

If it helps you understand, originally cable tv was a way to pay for tv (as opposed to free OTA) that then had no ads, almost like how HBO operates today. Of course, that could only last for so long.

Cable TV was originally a way for communities outside of broadcast OTA TV reception areas to receive TV signals with little signal-degradation. People paid only for the ability to receive channels - not for the channels themselves. Premium TV came later.

Yes. Here's a little historical tidbit: if you have an older TV, you'll need to put your TV in CATV mode in order to watch cable. CATV stands for "community antenna television", referring to the practice of having one antenna to receive OTA TV and then using cable to distribute it throughout the community.

Ahhh I thought it stood for "CAble TV".

There was also basic cable fairly on. Things like CNN and AMC. When I bought a house in the late 1990s, I couldn’t receive any TV without cable.

I agree - I was staying in a hotel a few weeks ago, and flicked the TV on. I never really thought about it, but it's probably the first time I've watched TV in about 5-8 years - and the number and frequency of ads was just painful. I couldn't understand who the heck would put up with that!

I'm pretty sure that this is (or should be) a classic example of boiled frog effect.

Your brain is used to the ads so it tunes them out, the advert makers figure out (using the metric of "how many users complain about advert frequency") how to increase them so that users don't notice. Eventually you end up with a fifteen minute advert block every ten minutes, and you're wondering how it got to that level, but you're still invested in this-one-show-that-nobody-else-has, so you put up with it -- your brain tunes it out the rest of the time so you don't really notice it unless you've had a break from TV long enough.

I think that the UK does the right thing. In legislature they mandate that you can have no more than 12 minutes of adverts per hour of television[1]. Apparently in 1980s America a similar agreement was ruled illegal[2]. Sometimes I wonder how the Americans can put up with American courts, given how obviously biased towards corporate interests they are.

[1]: https://www.telegraph.co.uk/culture/tvandradio/8341764/TV-fi...

[2]: ""Many countries regulate the amount of advertising per hour, but a similar industry agreement in the U.S. was ruled illegal in the 1980s."", from: http://articles.chicagotribune.com/2011-02-06/opinion/ct-per...

It's the sheer volume of advertising, if you ask me. I remember once trying to sit through an old western flick with my grandpa. It felt like it took the entire day but in retrospect it probably was around 4.5 hrs to completion which is still an absurd amount of time. As a result I never paid for cable until it came bundled with the internet recently.

It wasn't that bad, let's say, 20 years ago.

Also it was one of the main sources of home entertainment.

It was indeed that bad, and 20 years ago there were less regulations about advertisement volume so a lot of the ads ran louder than normal programming to make sure the guy who went to go and get his popcorn could still hear about the wonderful effects of fakedrugalenta.

If you're paying for Internet, you're paying for someone to provide with you advertisements in exactly the same way. Cable is merely the delivery method -- the networks and stations themselves are providing the content separately and using advertising to fund it.

If you pay for premium cable channels like HBO then you're actually contributing your money to the production of advertisement-free content.

It is (or was, I haven't checked recently) very difficult to actually just pay for HBO. I had wanted to get a subscription for a few different shows they offer and every way to get access to them involved paying for cable channel bundles.

I assume cable companies are shoveling money at HBO as fast as they can manage as otherwise it'd be a wise idea for HBO to just begin offering ala carte access to their content and get oodles of free money.

If you're in the US there is HBO Now which is their cable-free subscription service. I believe the actual monthly fees are still being serviced by third parties though, e.g. I pay Apple 15 dollars a month for my HBO subscription, but I get all the content through HBOs website directly.

Ah yes... if only the walled gardens weren't configured to see we Canadians as an entirely different sort of person.

Sadly the HoBOGO is only available up here if you have a cable TV subscription that offers HBO.

You can get HBO a la Carte through Amazon or even HBO itself.

Except Cable is purely an entertainment-consumption medium. Whereas the internet provides tools and services vastly beyond entertainment including creation of content, goods, and services.

The value-cost ratio is absurdly better on the internet.

That's just progress. At the time cable was deployed, the value-cost ratio was quite a bit better. For many people the Internet is deployed to them on the very same cables that were originally laid just for television.

A lot of people have cable because they've always had cable and now there's a generation of people coming up who've never had it.

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