Pay TV should charge per channel

Written by
  • 5 years ago
  • Posted: October 2, 2013 at 9:16 pm

I’m not a sports fan so I’m not into Premium Bouquet from Dstv; but there was this time I thought I was missing out on other cool stuff available only on Premium so I decided to try it out. After two months, I realized that the only channels I added to my entertainment list that are available only on Premium bouquet were M-Net Comedy, Comedy Central and Discovery channels. So I did a basic calculation and concluded that the three channels were not worth the additional Kshs. 4,500 that I was incurring on top of Compact bouquet.

Before subscribing to Dstv, I did a lot of research on entertainment options available in terms of pricing, quantity and quality and found out that Dstv had the best offers. I called their customer care for further clarification on a few issues including the possibility for Dstv introducing pay per channel, otherwise known as la carte programming, in the future as I wanted to subscribe to premium bouquet just because they decided to bundle Discovery and Comedy central into the premium bouquet. The customer care representative explained to me that they could not be able to sustain such a programme as every bouquet incurs a given maintenance and fixed broadcast costs. Increasing the bouquets to “infinity” means infinite fixed maintenance and broadcast costs that pay TV providers cannot sustain.

The argument by the customer care representative was convincing in economic terms but I still had doubts on technical perspective. My doubts seem to be true given comments from some viewers who have reacted to the announcement by Brian Roberts, the chief executive of Comcast that la carte programming will never materialize. Speaking to PBS in an interview, Roberts explained:

If you had to pay separately for just PBS, probably, sadly, not a majority of Americans would do that…So there’s many channels, whether it’s Discovery Channel or C-SPAN or many, many others, that just aren’t viable. You can’t just buy the sports section of The New York Times. You take the whole paper.

But with many Pay TV channels becoming available online and tech giants like Apple, Google, Twitter and even TV manufacturers like Samsung, Sony, LG and Panasonic seriously considering venturing into online streaming, the default cable and satellite pay TV providers like Comcast, Zuku, StarTimes, Dstv etc might find themselves without subscribers pretty soon. In Africa and especially in Kenya we are still constrained by the high cost of Internet access but when the local TV broadcasters shall have effectively migrated to digital TV and the current analogue spectrum become available for Internet provision, we foresee the cost of Internet getting lowered to affordable levels that will allow at least some hours of TV viewing online. The cost of Internet is also expected to lower once the ICT projects like last mile, LTE and fiber connections are effectively deployed.

What pay TV providers should do is to rate each channel’s price levels, set minimum channels that a subscriber must select, and ground the free to air channels that will come with any combination of channels selected. Hypothetically, Dstv can set channels currently available only on premium bouquet at $3 per channel (with variation according to channel demand), those available on Compact bouquet but not available on Family and Basic bouquets to be rated at $2 per channel (demand variation still applies across all bouquets), those available on Family bouquet but not available on Access bouquet to be rated at $1.5 per channel and those available on Access bouquet be rated at $1 per channel.

If that be the case, and assuming Dstv would limit minimum channels to 20, my choices from Access bouquet will only be the free to air local channels, M-Net Movie Zone, e.tv Africa, BBC, and Al-Jazeera for a total cost of $4.

My choices from Family would be M Net Action, Supersport 9, Supersport 9 East, Sony Entertainment, National Geographic, and Boomerang for a total cost of $9.

My choices from Compact Access would be Trace TV, Disney Junior, Sony Max, Universal Channel, Studio Universal, and Discover World for a total cost of $12

And lastly my choices from Premium Bouquet would be Discovery, Supersport 3 (to take care of friends), M-Net Comedy, and Comedy Central for a total cost of $12.

Combining these, I will be paying  $37 for only 20 channels. Well, as a consumer I will feel satisfied as I will be paying for what I want instead of paying for the over 110 channels available on Premium bouquet but end up watching only 20 of them for $82. At the end both the consumer and the provider have gained significantly. Also, each month I will be given the opportunity to revise my list according to my change in preference.

Probably a law should be enacted to push pay TV providers into this type of offering. Aren’t there any laws on consumer freedom, preferences and choice? Otherwise what should happen very quickly is expanding Internet access and the lowering the cost thereof.

PS

The other payment method that will add value to consumers is payment based on usage rate. Some of us put the TV on at 7pm to shut the damn thing down at 10 or 11pm whereas others watch TV the whole day. The reason I do this is because my TV knows how to consume power. On months that I leave the TV on for 10 or so hours, my power bill surpasses the Kshs. 2,000 mark but watching it for only 3 or 4 hours I pay as little as Kshs. 600 to Kenya Power. It is therefore unfair for Dstv to charge me a flat rate of $32 despite the fact that I only access their services for only 4 hours. They can also introduce a Dstv meter that will take care of days/months that users are not available.

What is your opinion on the topic?
Odipo Riaga
Managing Editor at KachTech Analytics Ltd
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Odipo Riaga is a Technology Blogger interested in emerging tech such as VR and AR, AI, Life Extension, Exponential Biotech, Immortality, Cyborgs and many others.
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