Business Models

by Karl Bode


Filed Under:
ads, fees, tv

Companies:
amc



AMC To Charge Cable Customers $5 More To Avoid Advertisements

from the look-mom,-we're-innovating! dept

We've discussed ad nauseum how, as the Internet video revolution accelerates, the cable and broadcast industry's response has predominantly been to double down on bad ideas in the false belief that they can nurse a dying cash cow indefinitely. Netflix nibbling away at your subscriber totals? Continue to glibly impose bi-annual rate hikes. Amazon Prime Video eroding your customer base? How about we edit programs to be shorter so more ads can be shoveled into every viewing hour? By and large, the cable industry's response to the cord cutting threat has been to do more of the things that forced annoyed consumers to leave.

And when you do see a cable or broadcaster attempting to be creative on this front, there's often a degree of lacking common sense. Case in point: AMC Networks last week fancied itself creative when it unveiled a new plan to let consumers skip advertisements on its programs -- if they're willing to pay an additional $5 per month:

"Would you like to pay more for cable TV than you’re already paying? Then AMC has an offer for you: The cable programmer is going to start selling an add-on service that lets cable TV subscribers watch most AMC shows, without commercials, for an extra $5 a month. AMC, which is rolling out its new “AMC Premiere” option to Comcast pay TV subscribers, says the new service is aimed at “super-fans” of its programs like “The Walking Dead,” who have a pay TV subscription but are willing to pay more to watch live, ad-free TV.

So, several problems here. One, the offer ignores the fact that many subscribers already skip ads using their DVRs, making this kind of unnecessary and insulting to the savvy consumer. AMC's also ignoring the lessons learned about needing to compete with piracy, something that doesn't stop being true just because you're offended by piracy's existence. And with often bi-annual price hikes already driving consumers away from cable at a record rate, you'd be pretty hard pressed to find any consumer that thinks it makes sense to pay a penny more for cable television at this juncture, something the company seems fleetingly aware of:

"It’s not for everyone," said AMC president Charlie Collier. "But it’s a good choice for people who want it."

Is it really? This is, once again, the cable and broadcast industry attempting to look innovative and competitive without having to put the time and money into actually being innovative or offering lower prices. AMC "solves" a heavier ad-load problem that consumers have already managed to avoid with their DVRs, hikes up the price of expensive cable TV service even further, then pats itself on the back under the pretense that this is delivering added value to "super fans."

If the cable and broadcast industry really wanted to be innovative, it would work to respond to the rise in streaming competitors and actually compete on price and channel bundle flexibility. Until it does that, everything else is hollow lip service.


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  • icon
    Discuss It (profile), 6 Jul 2017 @ 1:31pm

    The only way

    The only way to win is to not play the game at all.

    I no longer watch any major media, haven't for more than 10 years. I find I have a lot more time for my family, hobbies, and leaning new things.

    Hollywood and television are a huge, uneeded time sink. So I got rid of them.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 6 Jul 2017 @ 1:37pm

      Re: The only way

      "Look at me, my hobbies are better than everyone else's hobbies."

      Have you considered the possibility that different people enjoy different things? Or that many people don't see their shows and movies as something just to fill their time but something that brings enrichment to their lives; something that they are excited for and would be very sad if they lost them?

      Technically your family, hobbies, and learning new things are "unneeded". You could live without them after all.

      reply to this | link to this | view in chronology ]

      • icon
        jupiterkansas (profile), 6 Jul 2017 @ 1:50pm

        Re: Re: The only way

        Former TV addict here and no, TV is a waste of life. Just about anything else you do will make you a better, happier person. Even the act of choosing to watch something rather than just turning on the TV and staring at whatever comes up is an improvement. It's one thing to enjoy a show from time to time, but for the most part too many people spend too much time watching TV, esp. the kind with commercials.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 6 Jul 2017 @ 2:02pm

          Re: Re: Re: The only way

          You don't seem better or happier.

          reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 6 Jul 2017 @ 2:41pm

          Re: Re: Re: The only way

          Who said anything about TV, or being addicted?

          "too many people spend too much time watching TV"

          Maybe, but I wasn't referring to mindlessly watching whatever happens to be on a particular TV channel at the time. I was giving a contrast to some one who has stopped watching any media whatsoever. Just look at devoted fans of things like Game of Thrones or Doctor Who and how much joy they get out of it and tell me they would be better off without them.

          reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 6 Jul 2017 @ 3:02pm

          Re: Re: Re: The only way

          One can be addicted to almost anything. That doesn't mean that thing is worthless or not perfectly fine in moderation.

          reply to this | link to this | view in chronology ]

        • icon
          PaulT (profile), 7 Jul 2017 @ 12:34am

          Re: Re: Re: The only way

          "TV is a waste of life"

          As are a lot of other things. Trying to be smug because you avoid one of the many time wasting pastimes that human being have isn't really a good thing.

          "Even the act of choosing to watch something rather than just turning on the TV and staring at whatever comes up is an improvement."

          So, you're saying that choosing to watch a show on Netflix is a better activity than turning on the TV at the time the same show is broadcast? You have a very strange set of distinctions.

          I'll agree that active vs. passive activities are better, but everyone participates in passive activities from time to time. It doesn't make you superior just because you chose a different passive activity.

          reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 6 Jul 2017 @ 3:06pm

      Re: The only way

      It's true. But have you tried to get out of consumerism?

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Jul 2017 @ 2:00pm

    This doesn't seem that unreasonable to me.

    If they are making $5-ish per month per viewer from ads, then it makes sense to let me pay that directly and not have to see the ads. I don't really watch AMC, but if I could do the same on FX I would. I sometimes buy shows on iTunes to avoid commercials.

    Your point about skipping commercials with a DVR is a good point, but there area couple reasons why I still might pay.

    1. I don't want to have to skip fwd-fwd-fwd-fwd ACK! back-back-back every commercial break.

    2. One of the things most DVRs can do is prohibit commercial skipping. Every time you press a button on your remote it sends a request to the cable company before carrying out the action. They would be fools to block this, but it wouldn't be the first time they did something foolish. I can imagine more channels splitting into two tiers - one with forced commercials and one without.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 6 Jul 2017 @ 2:54pm

      Re: @ "Every time you press a button on your remote it sends a request to the cable company before carrying out the action."

      Really? -- Well, I don't doubt, just a minor shock that the spying and control that people will put up with are much worse than knew. There's no need to accept the spying and control, whether it's cable company knowing when you press a button, or Google tracking you all over the net.

      But it's true you're not FORCED to pay $5 more, instead of unable to escape Google's tracking, any more than I'm strictly forced to read this minion's "ad nauseum" pieces: I do it partly for hoots of ODD usage where it merges two stock phrases, like "hollow lip service". It's minion-glish.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Jul 2017 @ 2:44pm

    This seems more like an attempt for them to come back later after lackluster subscribership and say, "see, customers prefer to watch ads with content interruptions"

    reply to this | link to this | view in chronology ]

  • icon
    SirWired (profile), 6 Jul 2017 @ 3:04pm

    What's the problem here?

    "One, the offer ignores the fact that many subscribers already skip ads using their DVRs, making this kind of unnecessary and insulting to the savvy consumer." It's "insulting"? Some people don't have DVR's and might find this offer useful. Or they don't want to have to keep fiddling with FF and occasionally overshooting. It's like saying that Jiffy Lube is insulting because many people can change their own oil.

    "AMC's also ignoring the lessons learned about needing to compete with piracy, something that doesn't stop being true just because you're offended by piracy's existence." Huh? Who said anything about piracy? AMC didn't.

    "If the cable and broadcast industry really wanted to be innovative, it would work to respond to the rise in streaming competitors and actually compete on price and channel bundle flexibility. Until it does that, everything else is hollow lip service." Holy False Dichotomy Batman! Who came up with the this rule that they can't even explore something like this until they do those other things first?

    Sheesh; sometimes this site seems to just reflexively disagree with something the media industry does for no other reason other than it's the media industry doing it, and it doesn't involve giving away $hit for free.

    AMC pays their bills with a combination of ads and carriage fees. Offering to drop the ads in exchange for the revenue they'd otherwise collect from them seems like a fair deal to me.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 6 Jul 2017 @ 3:48pm

      Re: What's the problem here?

      ... and is something Techdirt and other websites do as well, held up as a great new business model.

      Karl could get roses and complain about thorns. Its reflexive not cognitive.

      reply to this | link to this | view in chronology ]

      • icon
        PaulT (profile), 7 Jul 2017 @ 12:38am

        Re: Re: What's the problem here?

        "... and is something Techdirt and other websites do as well, held up as a great new business model"

        Can you link to the article that claims that paying extra money to get the same content is a great business model? I must have missed that one.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 7 Jul 2017 @ 8:18am

          Re: Re: Re: What's the problem here?

          > Can you link to the article that claims that paying extra money to get the same content is a great business model?

          It's only the same if you don't mind having to skip ads. I usually prefer to not see ads or have to futz with the remote every 10 minutes and if it means having to pay a bit more, I'm okay with that.

          Look at it this way: say you only watch one AMC show. If you want to see it ad free one way is to buy the episodes on iTunes for about $2. If there's four episodes a month, that's $8. Since you are paying for AMC in your cable bundle, you might be paying more than that, but probably not by much. Once you watch two shows a month you are surely ahead.

          Everybody here seems to think people only are looking for cheaper tv and I think that's short sighted. A lot of us want a better experience and over-the-top services should be one way of getting that. AMC's plan is an interesting hybrid approach. I hope it successful because I'd love to be able to get back to commercial-free cable.

          reply to this | link to this | view in chronology ]

    • icon
      Stephen T. Stone (profile), 6 Jul 2017 @ 4:26pm

      Re: What's the problem here?

      What service does this cover: actual live broadcasts of shows, DVR recordings/VOD, or both? What kinds of programming does this cover: all shows and movies shown on AMC, or only AMC-original shows? How much commercial-free AMC content will this service give viewers access to: a full archive of all of AMC’s original shows, or select episodes of select shows?

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 6 Jul 2017 @ 5:44pm

        Re: Re: What's the problem here?

        And.... How long will the commercial-less shows be available on On Demand? Oh, and since they are Premiere subscribers; will they need to wait until the next day to be granted the privilege of watching the commercial-less shows?

        reply to this | link to this | view in chronology ]

    • icon
      orbitalinsertion (profile), 6 Jul 2017 @ 7:39pm

      Re: What's the problem here?

      You probably don't remember early cable, where much of the point of getting it was - wait for it - it was commercial-free. Because you already damn paid for it. They have shifted that window so far over, you are looking back at the past from the other side of the valley.

      The only real increase in costs are the demands of the gatekeepers. This is why it is an insult. Not to mention they are apparently trying to price themselves right out of a market. That isn't an innovation or a reasonable offer to consumers.

      If any of these outfits were concerned with making money as top priority, instead of some perceived control, they would drop the price, make it more attractive, and sell more units.

      reply to this | link to this | view in chronology ]

      • icon
        John85851 (profile), 8 Jul 2017 @ 10:38am

        Re: Re: What's the problem here?

        That's an excellent point.
        If channels like Disney, AMC, TBS, WGN, and so on, are already charging subscribers *and* running commercials, why should people may *more* to remove the commercials that shouldn't be there in the first place?
        Shouldn't the advertisers who pay for the commercials be subsidizing the viewers? You know, like how we get free local channels by using an antenna?

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Jul 2017 @ 3:13pm

    While I don't see much of a market for this, I wouldn't say it's an entirely stuoid or unreasonable idea.

    reply to this | link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 6 Jul 2017 @ 3:18pm

    "most AMC shows, without commercials"

    Of course if the carrier has sold some slots during these prime watching times, we have no control over that.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Jul 2017 @ 3:30pm

    I have a feeling this really isn't live TV, but rather a flavor of video-on-demand. I personally don't watch any AMC shows, but I do watch a few shows from the on-demand service that Comcast offers. I might pay $5/month if all the current season shows on-demand were commercial free, but not likely for any one network.

    reply to this | link to this | view in chronology ]

  • icon
    brad (profile), 6 Jul 2017 @ 3:30pm

    I disagree

    Yeah I think on this one you're being a little knee-jerk. Premium ad-skipping isn't a bad idea at all in my opinion, and as far as strategies it's non-insulting in my humble opinion, me being one of those guys who uses workarounds to avoid commercial-watching. I usually like to support alternate venues for watching ad-free as that way I'm providing carrot, rather than stick, for those who play nice and provide the desired ad-free avenues. They're not trying to punish, they're providing exactly what a pirate-with-good-intentions would like to see.

    Good on AMC! This is a model we should either be rewarding, or at least not castigating as a drive-by for other political purposes.

    reply to this | link to this | view in chronology ]

    • icon
      Stephen T. Stone (profile), 6 Jul 2017 @ 4:29pm

      Re: I disagree

      One network offering a limited-function subscription service that extends only to said network's own programming for half the price of a Netflix subscription does not seem like a service worth subscribing to.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 6 Jul 2017 @ 5:20pm

        Re: Re: I disagree

        If there's more than two shows on AMC that you watch, then I think the $5 price is fair.

        Buying a commercial free season of some AMC show is usually about $25.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 6 Jul 2017 @ 5:47pm

          Re: Re: Re: I disagree

          Sooooo... $5 x 12 months = $60 vs. two shows x $25 for commerical less DVDs = $50. Not such a good deal in my book.

          reply to this | link to this | view in chronology ]

        • icon
          Stephen T. Stone (profile), 6 Jul 2017 @ 6:51pm

          Re: Re: Re: I disagree

          Forget about the details of AMC’s offering—none of which we know at the moment—and do a little bit of math.

          $5 × 12 = $60 for one year of commercial-free shows from a single cable network that requires an existing cable/satellite subscription to access

          $10 × 12 = $120 for one year of Netflix’s streaming service

          Which one really seems like the better value for consumers?

          reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 6 Jul 2017 @ 7:55pm

            Re: Re: Re: Re: I disagree

            They're different things though. If you want to watch The Walking Dead without commercials this year, spending $120 at Netflix to do so doesn't help.

            It's like wanting tickets for the Rolling Stones and then going to see Nickleback instead because the tickets were less expensive.

            reply to this | link to this | view in chronology ]

            • icon
              Stephen T. Stone (profile), 6 Jul 2017 @ 9:31pm

              Re: Re: Re: Re: Re: I disagree

              If you want to watch The Walking Dead without commercials this year, spending $120 at Netflix to do so doesn't help.

              If people want to spend an extra $60 alongside the annual cable bill costs just for access to commercial-free episodes of “The Walking Dead” and they have both the money to burn and the fandom to justify it, I am not going to question their decision. But for people who want to watch more than “The Walking Dead”—as most people probably would—I would recommend spending $120 a year for Netflix’s streaming service because it offers far more value than an add-on for a cable subscription.

              reply to this | link to this | view in chronology ]

            • icon
              PaulT (profile), 7 Jul 2017 @ 12:40am

              Re: Re: Re: Re: Re: I disagree

              "If you want to watch The Walking Dead without commercials this year, spending $120 at Netflix to do so doesn't help."

              Strange, that's exactly what I do, I never watch the show on any other service. But, I don't care about getting the newest episodes and am happy to wait, so there's that.

              "It's like wanting tickets for the Rolling Stones and then going to see Nickleback instead because the tickets were less expensive."

              No, it's like wanting the new Stones album but waiting for it to be on Spotify because you don't care about owning the CD on launch day.

              reply to this | link to this | view in chronology ]

  • icon
    Rapnel (profile), 6 Jul 2017 @ 4:06pm

    Oh look, a pig with lipstick.

    If these folks have a viable product then why is all this podunk hokey "innovation" happening now instead of 25 years ago?

    This is like watching someone try to tune their horse buggy for the Indy 500.

    Good idea though, yeah. Got Cable?

    reply to this | link to this | view in chronology ]

  • icon
    Hugh Jasohl (profile), 6 Jul 2017 @ 4:23pm

    Alternate

    If you have and still want Cable, but don't want to pay for each TV in your house to have a box that sucks up power all day, get a Ceton InfiniTV 6 PCIe - 6-channel Internal Cable TV Tuner. It lets you rent a cable card from your provider for around $5 and you can watch up to 6 different channels at once on different TV's or computers. We use it in my house and every room has its own assigned tuner. No more problems and way less power usage per month.

    reply to this | link to this | view in chronology ]

    • icon
      TimK (profile), 7 Jul 2017 @ 6:48am

      Re: Alternate

      I just looked into this and found out it's been discontinued! (The will sell you the Ininitv but the echos that you need for each tv have been discontinued) I thought I had found a solution to my absurd cable bills....but alas Microsoft has killed that dream by eliminating media server after windows 8.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 7 Jul 2017 @ 10:41am

        Re: Re: Alternate

        You _could_ run a Win7 Media Server on a separate VLAN (more work) and not let it directly get on the internet (for security reasons if you care).

        The Echos are available on Ebay for about $100 which seems a bit high. I _suppose_ that other lower cost players would work since the setup uses the Windows Media Server -- Don't know for sure since there isn't technical information/drawings on how it all works together on the Ceton site.

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Jul 2017 @ 5:27pm

    "It’s not for everyone," said AMC president Charlie Collier. "But it’s a good choice for people who want it."

    That was also the motto of my sex life which is why I remained a virgin well into my 20's.

    reply to this | link to this | view in chronology ]

  • icon
    Anon E. Mous (profile), 6 Jul 2017 @ 5:37pm

    "Would you like to pay more for cable TV than you’re already paying? Then AMC has an offer for you: The cable programmer is going to start selling an add-on service that lets cable TV subscribers watch most AMC shows, without commercials, for an extra $5 a month"

    And of course AMC say's "Most AMC shows" and with that you have AMC's get out of jail free card when subscribers complain that "some" or "most" popular shows are excluded at AMC discretion.

    Sorry but "most" gives AMC an automatic out to decide how, w and what shows will be without ad s for those willing to pay. How will the AMC decide what shows will be ad free will subjective at best. Ho way in hell is AMC going to make their most popular shows ad free if there is not enough subscribers to take the 5 dollar ad free plunge.

    My guess is these shows will be one with not a great viewership or the popular ones that are in re run phase.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Jul 2017 @ 6:35pm

    No Copy Flag

    One, the offer ignores the fact that many subscribers already skip ads using their DVRs, making this kind of unnecessary and insulting to the savvy consumer.

    All AMC has to do is set the "No Copy" flag on the program stream and the DVR won't record it in the first place.

    reply to this | link to this | view in chronology ]

  • icon
    Lord Lidl of Cheem (profile), 7 Jul 2017 @ 3:06am

    I don't think they've thought this one through properly with regard to spoilers! (or maybe they have)

    How annoyed will a person watching the walking dead be when they take a look at their phone during an ad-break and someone who's 5 minutes ahead of them posts what happens!

    Not to mention what are they going to be screening in the 15 minutes or so gap between programs while everyone else catches up - maybe some sort of informational mini-programs to let the viewers know what amazing new products are out there!

    reply to this | link to this | view in chronology ]

  • icon
    TimK (profile), 7 Jul 2017 @ 6:54am

    Who the F*** is going to voluntarily pay MORE for cable? That's a F-ing insane plan to propose when your very customers are leaving cable because of the pricing. Why not come up with a better non-cable alternative option instead. Even offer that service to people who pay for an app option. But not ON TOP of cable TV.

    I'll be watching TWD without commercials and I'll do it for free. My DVR records it and I wait about 30 minutes into the show to start watching. I skip all the commercials with a couple of remote clicks and finish watching at the same exact time. Plus I had 25 or so minutes of extra time.

    reply to this | link to this | view in chronology ]

  • icon
    Ninja (profile), 7 Jul 2017 @ 7:08am

    For a service that should be ad-free already. Right.

    reply to this | link to this | view in chronology ]

  • icon
    McFortner (profile), 8 Jul 2017 @ 10:09am

    Isn't it wonderful?

    Now you can pay them twice to get what you want without the commercials you don't! Don't let the high price you pay for the channel in the first place fool you, it's totally worth the extra cost! </pitchman></sarcasm>

    reply to this | link to this | view in chronology ]

  • identicon
    anonymous, 8 Jul 2017 @ 7:04pm

    Er?

    Just wanted to point out from the first sentence, "ad nauseum."

    reply to this | link to this | view in chronology ]


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