Friday, June 22, 2018

Upending the TV Pricing Model -- Why Pay For What You Don't Watch???

AT&T reportedly will "upend the established model in which cable and satellite-TV companies pay programmers fees based on how many subscribers have a channel accessible in their bundle, regardless of whether they watch it." AT&T's new "'skinny bundle' of channels" will be free to subscribers on unlimited data plans Drew FitzGerald reports in the WSJ, and "...the free version that comes with unlimited-data plans would only count subscribers that spend significant time using the app, according to a person familiar with its plans."

This seemingly simple change represents an important break from tradition -- a necessary step toward more sensible, value-based pricing models for TV/video. It opens the way for a variety of new consumer-value first pricing models.

I have written about why this is urgently needed and where this should go, in “Post-Bundling – Packaging Better TV/Video Value Propositions with 20-20 Hindsight.”  Updates to that post explain why this is increasingly a life or death issue for pay-TV providers.

("Post-bundling," alone, is a fairly straightforward half-step toward the much more advanced customer-value-first models suggested by my FairPay strategy -- as also noted in that prior post.)

Let's hope this crack in the dam of tradition will lead to an increasing range of better offerings.

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