Comments on: Consumer Revolt… or Rejoice? http://www.cabletechtalk.com/news-items/2008/01/30/consumer-revolt%e2%80%a6or-rejoice/ Technology & Telecommunications Policy Discussion Wed, 19 Nov 2008 15:27:41 +0000 http://wordpress.org/?v=2.6.2 By: buckwheaton http://www.cabletechtalk.com/news-items/2008/01/30/consumer-revolt%e2%80%a6or-rejoice/#comment-127 buckwheaton Wed, 13 Feb 2008 23:10:08 +0000 http://www.cabletechtalk.com/2008/01/30/consumer-revolt%e2%80%a6or-rejoice/#comment-127 I wasn't asking about explaining to consumers the costs borne by system operators. I'm more interested in your thoughts about more transparency in communications service marketing: My thought is that the prices that customers are offered in advertisements and the prices they are actually charged are often wildly different, and while itemizing, for example, PEG/Franchise/Receipts taxes on a bill effectively allows operators to slyly shrug and say that services are priced as promised, the customer's check is still bigger than she thought it would be. Hence, anger and churn. To put it another way, I understand that the airlines don't "want" to charge a $25 fuel surcharge and a $25 9/11 security fee, but I still feel ripped off paying an extra $50 for a plane ticket. Consumers care about the costs borne by them, not the costs borne by the system operator, and might care more about the latter if operators were more transparent concerning the former. I wasn’t asking about explaining to consumers the costs borne by system operators. I’m more interested in your thoughts about more transparency in communications service marketing: My thought is that the prices that customers are offered in advertisements and the prices they are actually charged are often wildly different, and while itemizing, for example, PEG/Franchise/Receipts taxes on a bill effectively allows operators to slyly shrug and say that services are priced as promised, the customer’s check is still bigger than she thought it would be. Hence, anger and churn. To put it another way, I understand that the airlines don’t “want” to charge a $25 fuel surcharge and a $25 9/11 security fee, but I still feel ripped off paying an extra $50 for a plane ticket.

Consumers care about the costs borne by them, not the costs borne by the system operator, and might care more about the latter if operators were more transparent concerning the former.

]]> By: Michael Turk http://www.cabletechtalk.com/news-items/2008/01/30/consumer-revolt%e2%80%a6or-rejoice/#comment-124 Michael Turk Wed, 13 Feb 2008 16:39:07 +0000 http://www.cabletechtalk.com/2008/01/30/consumer-revolt%e2%80%a6or-rejoice/#comment-124 buckwheaton - We've actually talked about exactly that and are looking at ways to explain that topic. We're considering something along the lines of "<a href="http://www.howstuffworks.com" target="_blank" rel="nofollow">How Stuff Works</a>". It would cover not only the cost of providing voice, video and internet services, but also such topics as the costs and processes for programmers to obtain rights to, produce, and distribute content. That's sort of a big undertaking and we'll keep you posted as we move forward. buckwheaton -

We’ve actually talked about exactly that and are looking at ways to explain that topic. We’re considering something along the lines of “How Stuff Works“. It would cover not only the cost of providing voice, video and internet services, but also such topics as the costs and processes for programmers to obtain rights to, produce, and distribute content.

That’s sort of a big undertaking and we’ll keep you posted as we move forward.

]]> By: buckwheaton http://www.cabletechtalk.com/news-items/2008/01/30/consumer-revolt%e2%80%a6or-rejoice/#comment-123 buckwheaton Wed, 13 Feb 2008 16:26:12 +0000 http://www.cabletechtalk.com/2008/01/30/consumer-revolt%e2%80%a6or-rejoice/#comment-123 Could you address, though, the hidden fees aspect of cable billing? If Cable (and DBS, and LEC video, and moblie providers, etc) were more forthcoming about how much their services actually cost -- about the amount of the bill -- at the end of the day, I think just from personal experience that consumer anger and churn would decrease significantly. Could you address, though, the hidden fees aspect of cable billing? If Cable (and DBS, and LEC video, and moblie providers, etc) were more forthcoming about how much their services actually cost — about the amount of the bill — at the end of the day, I think just from personal experience that consumer anger and churn would decrease significantly.

]]> By: Michael Turk http://www.cabletechtalk.com/news-items/2008/01/30/consumer-revolt%e2%80%a6or-rejoice/#comment-63 Michael Turk Thu, 31 Jan 2008 20:07:54 +0000 http://www.cabletechtalk.com/2008/01/30/consumer-revolt%e2%80%a6or-rejoice/#comment-63 Let me try to clarify. The PPVH measurement is not a "slick" measurement it's simply a realistic measurement of value. Since the number of channels available, the addition of digital video, the inclusion of HD offerings, the availability of video on demand, and features like digital music all combine to make the cable package a significantly different product than it was 10 years ago, simply measuring price indexed for inflation isn't really a valid comparison. Since the product has changed dramatically, we need to find a unit of measurement that remains constant over time. You have to look at how people are consuming the resource to determine its comparitive value. Think of it this way. In 1998, you watched 10 hours of cable TV per month, and paid $30 for your package, your price per viewing hour was $3.00. In 2008, you are watching 40 hours of cable per month, and your basic cable package is $60, your price per viewing hour is only $1.50. Studies demonstrate clearly that people are watching considerably more cable than they did a decade ago. When you account for that fact, as I did above, you realize that the price you are paying based on a comparable unit of consumption has declined. Let me try to clarify. The PPVH measurement is not a “slick” measurement it’s simply a realistic measurement of value.

Since the number of channels available, the addition of digital video, the inclusion of HD offerings, the availability of video on demand, and features like digital music all combine to make the cable package a significantly different product than it was 10 years ago, simply measuring price indexed for inflation isn’t really a valid comparison.

Since the product has changed dramatically, we need to find a unit of measurement that remains constant over time. You have to look at how people are consuming the resource to determine its comparitive value.

Think of it this way. In 1998, you watched 10 hours of cable TV per month, and paid $30 for your package, your price per viewing hour was $3.00. In 2008, you are watching 40 hours of cable per month, and your basic cable package is $60, your price per viewing hour is only $1.50.

Studies demonstrate clearly that people are watching considerably more cable than they did a decade ago. When you account for that fact, as I did above, you realize that the price you are paying based on a comparable unit of consumption has declined.

]]> By: Wyatt Ditzler http://www.cabletechtalk.com/news-items/2008/01/30/consumer-revolt%e2%80%a6or-rejoice/#comment-62 Wyatt Ditzler Thu, 31 Jan 2008 19:24:12 +0000 http://www.cabletechtalk.com/2008/01/30/consumer-revolt%e2%80%a6or-rejoice/#comment-62 By virtue of the definition of PPVH within your post: "A great way to judge the value of a product is a simple “use vs. cost” analysis. That simple analysis for video service is something called Price Per Viewing Hour (PPVH) which measures how many hours a customer watches TV versus how much they pay for it. The good news for consumers is that cable’s PPVH decreased by 15.4% between 2001 and 2006…that is, the actual cost per hour of watching TV has dropped." It really only shows that either the price has has gone down or people are watching more television. Sort of a 'slick' measurement. So which variable has changed, is it the price, the number of hours television is watched, or a little of both? That will really provide meaning about the measurement. Cheers, Wyatt By virtue of the definition of PPVH within your post:

“A great way to judge the value of a product is a simple “use vs. cost” analysis. That simple analysis for video service is something called Price Per Viewing Hour (PPVH) which measures how many hours a customer watches TV versus how much they pay for it. The good news for consumers is that cable’s PPVH decreased by 15.4% between 2001 and 2006…that is, the actual cost per hour of watching TV has dropped.”

It really only shows that either the price has has gone down or people are watching more television. Sort of a ’slick’ measurement. So which variable has changed, is it the price, the number of hours television is watched, or a little of both? That will really provide meaning about the measurement.

Cheers,
Wyatt

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