Subscription Television, The Wave Of The Future
It’s been a number of years since I’ve subscribed to cable TV at home. Among other reasons, most of the shows are crap, what isn’t crap is interrupted constantly by commercials that are twice the volume of the show I’m attempting to enjoy, and I don’t really want to pay $100 a month to get the few channels I feel are actually worth watching on occasion.
The current model of subscription television works as follows. You pay a service provider (a cable or satellite company) a monthly fee for the right to view entertainment, news, and educational programming at their convenience. Your service provider will, at no extra cost, insert highly energetic and distracting untargeted advertisements at regular intervals. These ads will interrupt the broadcast so you don’t miss anything. As a special bonus, if the service is ever interrupted, you will need to wait for a period of time (potentially anywhere from a week to a decade) before you can watch a rerun of the show(s) you missed.
Oh, that is so worth the money!
This model of subscription television does have it’s good sides. There are, thanks to those advertisements that companies pay such large amounts of money for, literally hundreds of channels and thousands of shows you can watch. With that many simultaneous programs, chances are that you can turn your TV on and find something to watch any time you like. Of course, if you don’t subscribe to every channel your provider carries, you might not find the things you want. Even if you do, chances are pretty good that you didn’t really want to watch it right now.
Enter the PVR, or Personal Video Recorder. Since the 1970’s, and much against the content industry’s wishes, you have been able to record a television show during it’s broadcast, and then watch it at your convenience. By the early 80’s, content and service providers had realized that the battle against time-shifting was lost, and control was once again with the viewer (to some extent, at least). More recently, you have been able to record those shows digitally to a DVD or hard drive or some other form of electronic memory. This is fundamentally no different than recording to analog tape (a la VHS or Beta), yet the content industry is once again up in arms to save it’s archaic and profitable business model.
Even more recently, content providers have been pushing service providers (and indeed, even governments) to abandon the analog airwaves and start broadcasting solely digital signals. Why? Is it because digital looks better? No. Anyone with a good television set can see that most DVD videos show compression artifacting during certain types of scenes, while analog (VHS) recordings do not. Is it because digital broadcasts are more convenient for the viewer? Again, no. You have to buy a digital cable box or satellite receiver, and buy a television with digital or high-definition inputs. Is it so you can finally make use of all the neat features your new digital PVR has? Nope. In fact, that’s just about the last thing the content providers want, and by extension, the service providers.
In reality, the main reason that digital TV is being touted as the next big thing by the content providers is because it is easier for them to control - once the right laws are in place. They can force service providers to bend to their will simply by threatening to withdraw their content from that providers offerings. So you end up with pretty decent looking television shows, broadcast in high-definition to that shiny new digital receiver, that you’re not allowed to time-shift, record, or otherwise enjoy on your schedule.
So what are you paying them for?
Ah right, there is little other choice right now.
So here’s what I would like to see happen. Currently, I watch about four different television shows on a regular basis - Lost, Battlestar Galactica, Heroes, and typically a current reality show (which is Grease: You’re The One That I Want right now). If it was convenient for me to sample more shows, I would probably find a few more that I like enough to want to watch.
I would like to pay a nominal subscription fee (say, $10 per month) and receive only those four shows (though I’d be allowed at least a channel’s worth at that price - say 20 shows). I want them without commercials, I want them to be high-definition, I want to time-shift them, and I want to be able to watch them at least twice each. If I can simply subscribe to a video RSS feed and download the shows as they’re being broadcast, great. If I have to receive them over the normal cable connection, I want advertisements to run the rest of the time so I’m not forced to watch them (and turn my television down) every 9 or 12 minutes during the best parts of my show.
You’re maybe thinking “Dude, no way they’ll do that for $10 a month! At 20 weekly shows (presumably), that’s only about $0.12 per episode (80 episodes per month!” I say that’s about right, but you’re currently paying, say, $50 a month and you can watch thousands of episodes per month. That works out to way, way less than $0.12 per episode! In fact, if you’re paying $50 per month for cable and receive 50 channels, and we assume that each channel will have an average of 24 shows per day, that works out to 36000 episodes per month at a mere $0.0014 each! If they take my suggestion, I’ll be paying nearly 100 times more than that! How can they possibly go wrong! The maths don’t lie!
The sad fact is that many people are paying $1.99 per episode at online stores like iTunes, an amount that is, to say the least, astronomically high compared to cable and satellite (over 1400 times higher).
Clearly, the content providers and producers do not want my business. Their business actions are the equivalent of selling bottled water at $100 per bottle during a flood. This is why people pirate television shows.
Didn’t anyone in charge do the math?
Filed under: Current
There seems to be one variable that you left out of the equation. In your model the networks won’t be getting any revenue from commercials. The cable fees today are a very small part of the revenue of the cable companies, the commercials are actually what pays most of the bill.
Your math, and hence, your article becomes irrelevant, since it completely disregards the main source of revenue.
Your price of $0.0014 per show assumes that every show is viewed. The shows we can’t or choose not to watch shoudn’t count as part of the value of the monthly cost, especially as compared to shows that we choose to buy, which are obviously specifically addressing our interests.
I would say that there are 1 or 2 shows per day that specifically address my interests in the same way as shows that I might pay to download. In addition, there are maybe another hour or two of incidental television that I watch per day, plus a bonus 5 or 6 hours scattered throughout the week. That’s 10 hours of consumed television a week, so we’ll double it to catch up to the “average viewer,” I guess, since it sounds low. OK, so 20 hours a week. To figure out how many shows that is per month, et’s call each “show” 45 minutes, since some are 30 and some are 60 — some are longer, but most episodes that people would buy are either 30 or 60, I guess.
So, that’s about 107 shows a month, rounded up. If you’re paying $50 for your cable, as in your example, that’s $0.50 per show. Way cheaper than $1.99 a show, but the shows that people buy for $1.99 are the exact shows they want to buy, without all the incidental programming that I through into the calculation.
Bottom line: just pointing out that the fraction-of-a-cent price for a show is flawed, in my opinion.
Just wanted to give you a heads-up. This essay has recently been posted on Slashdot, so you may expect a larger-than-usual volume of traffic as the “nerds” wake up Sunday…
How much is an episode of Lost (or something similar) worth to a TV broadcaster per viewer? How much add revenue (roughly) can a broadcaster get for the ad spots contained in an episode?
This to me represents the true price of an episode of Lost, which I would be prepared to pay for a version that I could watch once.
Any ideas?
@gustaf
I think that in the proposed model, the source of the revenue would shift from being sponsored by the advertisers, to being sponsered by the viewers. What becomes irrelevant is the current business model for television.
However…
The original promise of cable television was that there would be fewer or no ads, because you were PAYING for the content instead of just receiving it over the air for free. Flip through the stations today, and you will probably see an ad at least 25% of the time. Over time, ala cart episodes could meet the same fate. In that case though, there would hopefully be other content providers that are ready to step in and give the consumer what they want.
Products like Apple TV and Xbox Live Marketplace are looking to step in and fill that void, but like the OP notes, that while the content is completely overpriced at $1.99; consumers are still buying in, because they want something different than what they are currently being provided.
Math, Did you figure out the number of channels you can watch at once from the selection of 50. The cable companies know the cable box will tune one program, not all 50. If you channel surf, they know there is a long sync time required for any of the HD channels, so you are less likely to frequently channel surf the HD channels as you would waste too much time waiting for a picture.
well the other option could be MythTV…it’s got HD programming and time shifting i beleive although it is still using the cable company’s service
A cable company doesn’t care how many shows you watch, or how much you calculate that you are paying per show. From their point of view, $50 per month is better than $10 per month.
On advertising prices. Currently, video advertisers typically pay a CPM (cost per thousand impressions) of something like $ 20 for a 30 second ad, which increases with the popularity of the content (more for the Superbowl, for example). That means that each time you watch an ad, it is worth, in some statistical
sense, about 2 cents to the network. So, if there are 16 paying ads in a half hour show, and you watch them all, that’s about 32 cents. (Of course, they don’t know if you watch the ad or not.) So, the CPM is about $ 640 per viewer hour.
At AmericaFree.TV (an advertising supported online broadcasting service), we don’t interrupt content for video advertising, and most of the ad revenue actually comes from text advertisments (a revenue stream unavailable for the conventional networks at present). We currently get an effective CPM of about $ 140 per viewer hour from this source, or roughly one fifth the hourly rate of network video ads.
I think that in the future, there will be less advertising interruption, and more secondary ad sources.
@John: With the current US business model for TV(-commercials) 30-minute shows round out at about 23 minutes and 60-minute shows at about 42 minutes. This means that (roughly) for every 90 minutes of TV you watch over cable/sat you get 60 minutes worth of TV. so that might throw off your calculations.
Furthermore, the comments about commercials are only partially factored in. If you can remember back to the 24 season openers of (if I remember correctly) s2 through s5, they were sponsored by a big car company just to carry NO commercials whatsoever (at the expense of everyone in the show driving their cars). Similar funding occurs by for instance food producers (we eat your cereal) and phone manufacturers (we call with brand X, using service Y). And we all know how much cooler we are when we use the same brands of shampoo as rachel from friends..
In short, commercials broadcasted in between show segments, are no longer the ones we pay attention to or remember, it comes down to a shifting business model, which the cable companies need to work themselves into. While this is hard (case and point in the recording industry only now seeing how useless DRM is) it does need to be done..
I myself am not from the US, and I still watch shows a week after the US broadcast, simply because of silly delays in the local stations in buying the shows, or their use of useless commercials. However, if current shows would find a way to implement brandnames into their show in a useful way it would make me want to buy those much sooner.. This is a downside for cardealer jack on the corner in bumsville, AZ. but who every went to a specific store based on a commercial they ran on Comedy Central anyways……
$50 a month? Are you serious?
I pick the channels I want, only, which comes to about $87/year. It would almost
cost me more in postage if I had to pay that fractionally month-to-month.
If you record 24 hours a day for the entire month, your $50/mo subscription comes to about $0.035 per half-hour episode.
–Dick
Let’s not forget about how much time we lose (never to get back again) to commercials.
In my opinion iTunes is worth the $1.99 per show so I don’t have to watch commercials!
I currently pay $80 per month for premium satellite which comes out to 40 shows per month (480 per year) on iTunes. Though, at this rate and due to the availability of shows on iTunes, I am considering canceling very soon.
If approx. 30% of all TV shows are commercials and I watch all 480 of my shows via iTunes. I should save 108 hours per year (see math or maths below).
With commercials:
240 shows at 60 min = 14400 min
240 shows at 30 min = 7200 min
360 Hours Total
With out commercials:
240 shows at 60 min = 10080 min
240 shows at 30 min = 5040 min
252 Hours Total
Savings:
108 Hours per year.
Since, I believe that my time is very valuable and the more time i have interacting with my family the better. I say the 108 hours is worth every penny.
Please learn to spell “its” without an apostrophe. Its impossible to take you seriously otherwise.
Joe
Of course, you’re also making the assumption that I’m going to *continue* to pay for the cable programming. If I only watch a half dozen shows, assuming a full 26 episode season of each, I’d only pay just over $300 a year using the “$1.99 per episode” subscription model. I would personally prefer that model, which would realize a net savings of $300 annually versus a minimum $600 yearly cable bill.
“I would say that there are 1 or 2 shows per day that specifically address my interests in the same way as shows that I might pay to download.”…
This is the math the TV stations don’t want to hear. In Los Angeles, basic cable — and I mean basic analog replication of the local broadcast channels with no premium service — costs $34/month. For that price, my wife and I could buy 12 iTunes season passes or per year, or more DVD season box sets.
Make that digital (basic) cable + PVR (they charge you PVR rental AND a service charge), and you’re talking more than $55/month.
Heck, we don’t even watch 6 new shows per week, much less 12. We’d rather buy the commercial-free shows we want off iTunes and take our chances with over-the-air broadcasts than pay $35/month for cable.
What if the producers of a show say 24 wanted to produce a show and they required 5 million dollars? Rather than cutting a deal with the television companies to buy the rights to the show and then milk us, the viewers, for money they cut a deal with us directly.
We could all contribute money into a fund and if the fund reaches the amount the producers want then they get the money and we get the show. At a million viewers thats 50 cents a piece. We can distribute the show on peer to peer networks at a fraction of the costs. There is no reason to worry about piracy anymore; the creator already got paid. We are free from DRM and viewing restrictions and the creator is free from unfairly dictated contracts. Plus once you eliminate the middleman you eliminate about 90% of the costs of the system.
Everything else is archaic.
The math doesn’t need to EXACTLY work out for this post to make its point. The fact is that iTunes wants $35 per month for a “subscription” to The Daily Show.
My entire cable bill is about $50. So, you know, iTunes can suck it.
I don’t know if it works out revenue-wise for anyone, but the $10/month for 20 shows example would be a very compelling price point for me. Heck, even $30 for 20 shows, per month, would be pretty cool. Of course, the providers and brokers would have a chore figuring out how to split that money, but so what? I’m the consumer, and that’s what I’ll pay for. I won’t pay $35 for 20 episodes of a half-hour show no matter how funny it is.
This is for Joe who can’t take anyone seriously who misspells “its”.
It’s=it is
Its is possessive.
Get it right.
So, let me see here. You’re proposing that to enhance your viewing experience, the cable company (or whoever you get your TV service from) should charge you $10 a month, giving up the remaining $25-$130 per subscriber per month AND all the advertising revenue.
I suppose you could always start up your own cable company based on that business model, and we can all stand around and see how long it takes you to go broke. After all, based on your math, it should be a slam-dunk success, right?
There is another analysis that backs up the numbers in this story here and shows that $84B/year is wasted on dual-infrastructures for television distribution:
http://blog.digitalbazaar.com/2006/12/01/collaborative-content-distribution/
I’d like to point something out here. Of the shows you list, only 1, Battlestar Galactica, is on a cable-only network. That being the case, if you decided to drop that one, you could drop cable entirely and go to a broadcast-only setup. Hook up the Tivo and you’ve got your DVR and no content fees at all!
I use a different system. A basic package costs me average $12. It provides me with 6-20 hours of high-definition diversion, or $0.50 per half-hour period comparable to a television show based on 12 hours/book. I can view (’read’) it as many times as I want. No DRM is used or exists for the system.
If I don’t want to re-read or own the package, I can, for a fee that is part of my municipal taxes, download (’borrow’) anyone of hundreds of thousands of such packages available through repositories located in my muncipality. My municipal taxes are $3000/year, and I estimate that the repository system in my city receives 1% of the tax revenue, so my yearly cost for this service is $30. I can borrow as many packages as I like per year, at an average for this user of 30, or $1/package. At the same per hour rates, this is about $0.04 per half-hour period.
The packgages are compact, portable and can be used in locations away from power. I can stop reading at any time, and using a system adapted from browsers (’bookmarking’), I can resume my viewing (’reading’) at the same point at any time.
The quality of content available spans a significant range, but an existing expert system (’librarians, other readers, reviewers’) provides a convenient recommendation system, required for a content pool amassed over 4,000 years.
Books are available on a broad range of topics.
You need to consider 4DTV and C-band and Ku-band satellite.
If you go through a company like NPS, you can subsribe to just the channels you want. The two biggest chunks of the average cable bill comes from ESPN and Disney. They force cable companies to place the channels on the Standard Tier, and so you pay over $7 a month for them even if you’d never watch them. Because of the forced contract, you never get to see it as a line item on the bill. It would be like forcing everyone to sign up for HBO in order to get standard cable service.
I went 4DTV last year and got all the channels I wanted for less than $10 per month. All of them looked better than I got an analog or digital cable or DBS (Dish Network/DirecTV). Of course the best I ever had was Voom, but that is gone now.
The analogy about selling bottled water for $100/bottle in a flood is actually accurate, but for a non-obvious reason: flood waters aren’t drinkable, and the water table may actually be contaminated during a flood, so bottled (or boiled) water is the only drinkable source.
Similarly, the ads in most shows really inhibit their usability, as thus the inability to time-shift, so the $1.99/episode is worth it in the eyes of many (as they’ve posted).
Why not sell shows with ads, though? Or have shows in lower resolution formats for a lower price? Simply lowering the price won’t necessarily increase market penetration, and it’s probally still more profitable to sell a show with ads via a network than to sell it as a download; and even if it’s mroe profitable to the producers to sell direct and adless, the people who depend on selling ads aren’t going to want to change their business model just to help the “consumer”.
As others have pointed out, your math trying to arrive at the “true”price of an episode is pretty fuzzy. That’s a shame, as it makes an idea I agree with look kinda bad. One way to cross-check that math is other places people pay by the episode.
My girlfriend rents TV shows both from NetFlix and the local video store. Either way, she pays about $3 per 4-episode disc. That’s about 75 cents per rental of a 44-minute episode. Looking at some random DVD sets on Amazon, purchase prices per episode seem to vary from about $0.90 to $1.50 based on popularity. That make sense; owning should cost more than renting.
So it sounds like iTunes prices are a little high, but I’d expect that for three reasons. First, it’s Apple, and they’re not about low, low prices. Second, studios are stepping into this digital stuff very delicately; they’re scared of it. Third, WalMart, who moves a ridiculous share of the DVDs sold in the US, will not let studios drop digital prices below retail prices, at least not until they have their own digital store.
This is for James, regarding the whole “it’s / its” controversy:
While you are correct on the proper usage of “it’s” and “its,” you apparently don’t realize the article in question repeatedly uses “it’s” incorrectly, which is exactly what Joe was trying to point out. For example:
The writer uses the incorrect form of “it’s” here (it’s => it is), and should change to “its” (the possessive form). Looking at the article, it appears the writer always uses “it’s” regardless of context.
Obviously this is inexcusable. The writer should be taken outside and shot, with one bullet for each misuse of the form.
–jojobe
Lets not forget - Cable companies rebroadcast - they don’t set the content. They charge you ACCESS to channels - that is every channel that the cable company broadcasts for 24 hours. The charging model is “How much do we have to charge per channel to recoup costs of cable, rights, etc. and still make a profit” With iTunes, the expense to give you the program is much less - Server maintenance, Internet bandwidth and rights to content are the only major costs. iTunes does not need to wire every household to its network, because it uses the internet - pre-esisting infrastructure subsidized by people on the other end. Having said this, I’d like to know the cut that iTunes makes from the sale of a $1.99 TV Show….
Regardless, let’s look at the total cost from the viewer’s perspective.
From a viewer’s point of view, The price I pay is based off of how much time it is feasible for me to watch…. If I watched TV 24 Hours a day, I’d only be able to watch 48 half hour shows per day. This is definitely overkill. On the other hand, if I watch approximately 4 hours per day (Still a lot of TV imo), that comes to 28 hours. Even if you timeshift, it takes away viewing time from another program, thus timeshifting (Recording one program while watching another) will not affect the time watched, as presumably, it’s factored in to the 4 hours of watching. You can’t watch 48 hours worth of content in 24 hours…….
so 4 hours * 365 days = 1460 hours/year
$50 * 12 months = $600/yr
this means 1 hour of TV costs $0.4109.
Then, lets look at the subscription model for this.
lets assume half my shows (based off viewing time) are 1 hour long, and the pricing for a TV show is $1.99 static for all TV shows. That makes 6 shows per day at $1.99. That’s $11.94/day. Per hour
That comes to $2.985 per hour assuming that half hour shows cost $1.99 - the same price as hour long ones.
That’s $4358.10 per year. Not including internet charges, - let’s say $44.95 per month - $539.40/yr not including taxes. so that’s more like $4897.50 per year.
A more reasonable time period would be 2 hours per day - That makes cable cost $0.8219 per hour. Because the rate stays the same for 2 half hour shows and 1 hour long show as it does for 4 half hour shows, and 2 hour long shows, the cost per hour stays at $2.985 - Still more than double the cable bill. And that’s not including High speed internet to download your shows in a reasonable amount of time..
Even at 1 hour of viewing per day - cable costs $1.6438 an hour. Even if you only got a 1 hour TV show, at $1.99, it costs less. In fact, if you only watched half an hour per day, would your cable bill cost $3.2876, to exceed the cost of 1 TV show per day at $1.99. The average rate where downloading 1 show is cheaper than cable, is around 0.80% of an hour long show - 54 minutes per day on average, which is only 42 minutes per week (or 1half hour shows per week, with the rest at 1 hour, with a 1 hour long show switched for a half hour special show per month)
The cost per hour on a month described above, is $2.0547 per hour.
JB: you are incorrect, iTunes only wants $9.99 for a 16 episode subscription (since it airs four times a week, that’s a month subscription). The nice thing about subscribing through iTunes (which I do) is that when Jon Stewart goes on hiatus, you don’t pay any money at all. This is in contrast to cable TV, where you might as well feel cheated when he goes on a two week break and you’re still paying your cable bill.
As for the $1.99 per episode price, I fairly rarely buy single episodes. Most shows have a reduced price for a season subscription (for example, Battlestar Galactica is $34.99, so about $1.75 per episode). While it’s kind of annoying to have to wait for an extra day before the episode is available on iTunes, it’s nice to not actually have to think about when a series is going to start airing new episodes. Especially SciFi channel which has shows go on an exceptionally long hiatus in the middle of the season. In my case I didn’t even realize they had started airing the second half of the BSG season, other than the fact that iTunes started downloading a new episode automatically. I imagine if I had still had cable TV, I would have missed the opportunity to watch it that week, and not been able to have seen the episode otherwise for a very long time, given that SciFi channel appears to not run recently aired episodes past the week that the episode first ran.
The only shows I watch are both Stargates, Battlestar Galactica and The Daily Show. I did the math, and assuming Jon Stewart broadcasts for 48 weeks/year, this ends up costing me $234.85/year, or $19.57/month. Given that basic cable is at least $30/month, I would say this is a win for me.
The other thing is, most shows end up coming out on DVD anyway, and you could definitely save a lot more money by simply not demanding to see the latest episodes when they come out, and simply wait for them on DVD and rent them through NetFlix. On the other hand, even if you watch some shows through iTunes and pay for a NetFlix subscription for movies and other tv shows, it’s still going to be cheaper than getting any moderate cable package.
Do you really, seriously mean to contend that VHS has better picture quality than DVD? Honestly?
Maybe you came up with the cure for cancer later in the text but I’ll never know. I couldn’t read any further for the laughter.
William: don’t forget, the DVDs (either rental or purchase) also only come out after the season is *over*. Part of the higher price of iTunes is that you are getting the content *now*, while the season is progressing, allowing you to join in on the watercooler discussions and avoiding stumbling over season finale spoilers before you’ve even started watching. There’s definitely some extra value in being able to share in the excitement of a good show with your friends.
Wow, such heated debate. Not a lot that I can add to the conversation except that I’m running a blog about ditching cable for a combination of recording over the air television and using iTunes, called http://ditchingcable.com.
A few things to consider
1. do you watch reruns?
I don’t. So, that really throws off the numbers. Networks and cable channels alike tend to run their repeats at the same time (a bit of collusion, perhaps, or more likely driven by likelihood people are watching).
2. do you watch sports?
I don’t, but if you do, you’re kind of screwed without cable television. Monday Night Football isn’t even on broadcast television anymore. And good luck even finding hockey or basketball at all.
For folks like me, who like television but can’t be bothered with ads, reruns, sports, schedule conflicts, I can’t imagine life before PVRs, but now, I’m really wondering why I paid those high bills for something that I used so little.
Cheers,
Randy Stewart
ditchingcable.com
How much am I worth to my cable company? I have never been able to find out this information. I currently pay approximately $65 a month for for every channel my provider has with the exception of premium movie channels. What I would like to know is exactly how much advertising revenue does my provider receive per subscriber. I would be willing to pay $150 a month for cable without advertising. Does this number even come close to covering the ad revenue?
We are all discussing shows currently on broadcast/cable stations. What happens when your show ends? How do you introduce new content into the mainstream? Now to be devil’s advocate YouTube is a good introduction portal in that everyone votes on the best video. Structure free content from the portal and vote on what should get a chance to go mainstream. You also get your ads in since you have to squeeze between the banners to see the content.
This message is for jojobe regarding the “its” controversy.
You failed to realize what James was pointing out. While Joe made a valid point, he failed to follow his own advice. Carefully read his post again…
“Please learn to spell “its” without an apostrophe. Its impossible to take you seriously otherwise.”
’nuff said
Nate
Huh. At the time it seemed deliberately misusing the word “its” in the second sentence of my posting would help make the point. I thought the irony was obvious, but apparently subtle humor has gone out of fashion with the Nintendo generation — along with respect for grammar.
Thank you, jojobe, for sticking up for proper usage. Grammar is important.
Joe
Interestingly, many of the most popular shows are now available for free (legal) viewing from network websites. Regarding the shows mentioned in the article (”Lost,” “Battlestar Galactica,” “Heroes,” and some random reality sequence), all current episodes of Lost Season 3 are available from abc.com; all episodes of Heroes are available from nbc.com; and a number of reality shows are available from various network sites (although I am not certain about “Grease”).
These network-sponsored online video feeds usually come with about a minute and a half of commercials, shown as 20-second segments which are played five times.
Not really a new concept, here. I was blogging on this two years ago:
http://dmk.dyndns.org/wordpress/?p=252
The proposed model looks only at one side of the equation — cable fees as the cost of the show.
Take it from the other side and work a slightly different model — the production cost of the TV show in question. If MGM spends $1.5M to produce an episode of Stargate: SG-1, and distributors (the iTunes, etc) need a cut, and there are 10M subscribers to the show, then even at a a reasonable profit, the cost to the consumer should be below 50 cents an episode.
More options are being introduced, and some are a big improvement. NetFlix is adding a Watch Now option, included in at no extra cost in their regular DVD subscriptions. One hour of flexible online viewing for each dollar per month paid. Joost, now in beta testing (see my review at http://speak.to ), aims to provide on demand TV free on the internet, using a secure peer-to-peer client supported by targeted advertising (as little as 30 seconds per hour). Joost can scale quickly at almost no cost while improving its performance, if it attracts a large enough audience to appeal to advertisers and content providers, it will have a huge impact.
Get a Tivo. (You can still transfer a lifetime subscription for $199 for Series 3s bought through 1/31/07, so you won’t even have a monthly fee to have an issue with in this particular special case.)
Plus, “interrupted constantly by commercials that are twice the volume of the show I’m attempting to enjoy” is hyperbole. The worst offenders I’ve seen of shows I watch are the MTV reality shows, which seem to be between 1/3 and 1/2 commercials or other non-show stuff (e.g. MTV “news” break). Network TV dramas are usually about 1/4 commercials (close to 45 mins of content per hour, but I skip most of the repeated intro in shows I record to DVD).
tvrss.net + democracy player (RSS torrent downloader) is a great backup to cable when you miss your favorite shows.