Monday, August 14, 2006

Shareholders Love The Nats

Last week, I mentioned how Councilmember Howie Denis had used his rhetorical moment during a quarterly franchise review to complain about the failure of Comcast to carry the Nationals games here in Montgomery MD (and throughout the DC region).

At the time, I observed that it was pointless given that Comcast and MASN had entered arbitration over the matter. That arbitration has now concluded. It looks like Comcast won and subscribers also won. Or lost. Depends on your point of view.

Somehow omitted from the Comcast press release about the good news was the bad news: Comcast plans to increase their rates $2 per subscriber (plus additional franchise fees and taxes) to pay for the coverage of the Nats games. Ok, not all subscribers - just those subscribing to Comcast's enhanced basic - in other words, anyone getting more than the lowest-numbered 30 or so channels (which includes such gems as the Home Shopping Network, QVC, and the TV Guide Channel).

Put bluntly, most subscribers will be hit with the $2 surcharge.

Who Would Willingly Pay For QVC?

This raises the obvious question: Why should subscribers who have no interest in Nats games be forced to pay for them?

Putting aside the conflicting studies showing whether a la carte packages are more expensive (FCC, 2004) or less expensive (FCC, 2006) and whether they improve or hinder diversity of programming, the answer is more likely that enough people will watch whatever sports are put on TV, and that a few dollars here and a few dollars there aren't large enough increases to hit people hard enough to change their behavior - to sit up and question the status quo. (Curiously, it is much harder to find the later report on the FCC website than their earlier report.)

Another significant factor is that the bulk of Comcast's broadband customers still believe they are getting a better deal by subscribing to Comcast's video service to get the package discount. I've previously shown that isn't true but habit, effective advertising, and automatic billing are hard to overcome.

PS: Join me in thanks that we don't live in DC and have to pay for yet another stadium boondoggle!

Shareholders Should Be Happy

The details of the arbitration have not been made public but the August 12 2006 Washington Post quotes a MASN spokesperson as saying the true cost is $1.25 per subscriber. Simple subtraction (2.00 - 1.25) suggests that Comcast is using this hike to raise their profit (after lawyers fees) by .75 per subscriber. With roughly 200,000 subscribers in MC that equates to $150K a month in additional profit or $1.8M per year. Nice.

According to the Post article, Comcast denies this, indicating that "MASN's statements . . . show a lack of familiarity with the provisions of the carriage agreement and with the basics of the cable television marketplace." If anyone knows what she's referring to, I'd like to hear. And so would Cox, DirectTV, RCN, and Verizon. They all carry the Nats games and have not raised rates either.


Anonymous said...

Very annoying. What's equally annoying is the new Supplier Surcharge that Verizon just invented to replace the FUSF tax.

Anonymous said...

Oh this is just more typical nonsense.

Who cares if we get the Nat's games or not? why are't the folks whimpering about the Bullets er, I mean Wizards and the Ice Hockey games too? Why don't complain and get the DC and Va County Government meetings to?

I hope someone with a clear vision steps in before long.