About 92 percent of respondents said they would be at least "somewhat likely" to switch to a full a la carte option, the RBC Capital survey of more than 1,000 consumers found.
Some 82 percent said they would subscribe to at least 11 channels and 40 percent indicated they would subscribe to more than 20 channels, with a weighted average of about 19 channels.
That sounds about right: most people watch seven to 12 channels on a regular basis, a rule of thumb suggests.
Of the respondents who would prefer a la carte service, and would pay for the services, about 51 percent said they would pay at least $1 per month per channel, with the weighted average being $1.47 per month.
That works out to about $28.50 per month, or about a third the average monthly video subscription bill. Some programmers might be able to build a business case on an a la carte basis, but most likely would not fare as well.
Granted, programming rights costs appear low for many channels, in the cents per month range. But that is based on volume discounts and represents only licensing fees, not marketing, operations, billing and other costs of delivering content to a customer.
Consumers seem to be using the same sort of logic they use in assessing the "right cost" for a single downloaded song. People seem to divide the retail cost of a CD by the number of songs and assign a value. Users might be doing the same thing with their video service, essentially dividing the monthly recurring cost by the number of channels in their packages.
Service providers would rightly argue that there are sunk overhead costs that are not "channel based." All those costs would, in a full a la carte regime, need to be amortized over a smaller number of revenue units (channels).
No comments:
Post a Comment