As a typical tech geek living in the Silicon Valley, I often feel like I have to apologize for the rantings of my fellow tech geeks when they frequently sound like unreasonable whiners.  MG Siegler at TechCrunch posted this typical screed complaining about the $100 cable bill (note that “cable” in this context is used to generically refer to any Multi Video Program Distributor or MVPD).  Siegler writes:

“Cable is vulnerable because for far too long they’ve screwed us all with ridiculous prices for a crapload of content that we simply don’t want. Despite the ever-present promise of a-la-carte pricing, it has never come to fruition. And so our cable bills remain close to (or over) $100 a month. We’re paying for so much stuff we simply don’t want. But we have no choice.”

The statement itself is contradictory and misleading.  For one thing, if all that content was truly “crap”, why does the vast majority of the public pay for it?  I’m sure you can get the vast majority of people to say that they would rather pay less for cable (or any other goods and services), but that isn’t evidence that a product is “crap”.  On a related note, calling something “crap” is also one of the typical rationalizations for stealing content.

Speaking as someone who “cut the cable” nearly four years ago, I and many of my friends are living proof that we do have a choice.  If you don’t spend a lot of time in front of the TV like most heavy Internet users, you can easily get away with free over the Air HDTV along with some free and subscription based Internet streaming services.  The people who can’t cut the cable are those who clearly value the unique content of their MVPD service enough that they would pay $70 to $100 a month for the service.

The other problem with Siegler’s statement is the over estimation of cable bills.  Base MVPD packages range anywhere from $45 to $70 and it’s only when you add the premium channels like HBO (which costs around $16/month by itself) along with other things like equipment leasing e.g., DVRs and HD receivers that the price balloons to $100/month or more.  Do people honestly believe that if HBO was available for streaming over the Internet (legally), it would somehow cost less than the MVPD solutions?  As for the equipment lease, can that legitimately be counted in when the cost of owning a computer isn’t?  $15/month for two HD receivers and DVRs ($720 over 4 years) seems like a reasonable deal considering how much it would cost to build an equivalent computer or embedded device with similar capability.

The comparison you hear over and over again from tech media is that people can cut the wire and save money while retaining access to the same content.  They’ll cite Apple’s $0.99 a-la-carte pricing of program episodes as evidence on how they would save money, but that would quickly balloon to well over $100 for households with multiple TVs.  Furthermore, consumers have generally shown a disinterest for a-la-carte pricing because they don’t want to think about paying for every little thing they may or may not want to watch.

People tend not to explore new programming if they have to justify paying a dollar to watch something and this probably explains why the vast majority of consumers (even those who are thoroughly in tune with Internet alternatives) have not opted to cut the cable.  Internet alternatives will most likely involve some sort of bundled pricing but that pretty much brings us back to the same place we are with Cable, Telco, or Satellite MVPDs and the Internet solutions will simply be a fourth alternative with similar pricing structures.

For me personally, I’m almost leaning towards signing up for a relatively inexpensive basic MVPD package just to be able to view Pay Per View (PPV) content with my friends because I’ve had so much trouble with online alternatives.  The online streaming PPVs cost the same $45 per PPV while offering horrible quality and reliability.