Not that long ago, Comcast (NASDAQ:
) spent millions of dollars on a campaign to tell consumers that
their services were "Comcastic!" While the company never
specified its meaning, many assumed that the word was a
combination of "Comcast" and "fantastic."
has a few other, user-made definitions:
Comcastic -- An adjective attempting to express the seemingly
beautiful nature of an object or service, ultimately representing
the epitome of broken dreams and false promises.
Comastic -- Paying for a service but not actually receiving
it. EXAMPLE, Person 1: Man, the movie channels don't work again!
Person 2: Duh, they're Comcastic.
The cable giant, which
leads the industry
as the number-one pay-TV provider in America, recently became the
. Comcast reportedly spent $1.7 billion to advertise its services
That growth hasn't reduced the consumer complaints, however.
more than 750 complaints
on RipoffReport.com, compared to
for Charter Communications (NASDAQ:
for Time Warner Cable (NYSE:
for Cox Communications and
for Cablevision (NYSE:
This is why some consumers are
eager to cut the cord
The monthly fees don't help. While a subscription to Hulu or
) is only $8 for streaming, Comcast charges a bare minimum of
$29.95 to $39.95 for a package that includes more than 45
The company offers a 12-month deal that will temporarily
reduce the bill to $14.99 for new subscribers, but there are
additional fees (taxes, cable box rentals, etc.) that frustrate
Other cable providers do the same thing. Time Warner, for
example, offers a "Digital TV" package with more than 200
channels for $49.99 per month for 12 months. The company does not
immediately provide any information on the possible taxes or
rental fees, nor does it say how much the service will cost after
the 12-month period is over.
To get that information, potential customers will have to call
the company or fill out an online form. In the latter case, Time
Warner expects customers to hand over their home address and zip
In any case, consumers typically end up spending a significant
amount of money on their monthly cable bill. According to
, the average monthly pay-TV bill is $86.
Now Google (NASDAQ:
) hopes consumers will spend even more.
YouTube, the video site owned by Google, is going to allow
content makers to charge viewers to watch individual channels.
The company has finally begun to
about the new initiative, which is still in the "experimentation"
Google has not said how much it will allow content makers to
charge. According to the
, the fees could range from $1 to $5 per month.
At first glance, this sounds like a positive venture. Who
could resist the lure of unlimited content that could prove to be
cheaper than an iTunes movie rental?
However, these "channels" are not the same ones consumers are
used to getting from cable providers. They are YouTube-specific
channels like the ones already available on the site. The new
paid channels may (or may not) offer better content, but users
will still ultimately wind up paying for something they could
have feasibly obtained for free.
Now suppose that one million people are okay with this
arrangement. They decide to cut the cord, cancel their cable
provider and watch videos exclusively on YouTube.
If the content suits their needs, those consumers should be
happy. If not, they could ultimately end up paying more for a lot
The a la carte payment system is only as good as the final
savings that are passed on to the consumer. With YouTube, there
may not be any.
If every channel costs $1, consumers will spend $40 a month
for 40 channels -- roughly the
Comcast charges, minus the added taxes and fees. The cable giant
charges $54.95 to $69.95 per month for a package that includes
more than 80 channels. At the YouTube rate, consumers would spend
$80 per month.
This assumes that YouTube charges as little as possible. If
content providers wish to charge more, consumers' monthly bills
Unlike traditional pay-TV formats, YouTube is not currently a
live network. While that could change in the future, the paid
channels initiative is expected to be designed for pre-made
content that is trickled out. Users would be free to watch it
whenever they wanted, but because the content may not be live,
there may not always be something to watch. Consumers would
eventually reach a limit after viewing every video available.
After that, everything video would become the equivalent of a
According to the
Los Angeles Times
, reruns declined in popularity last year.
The luxury of cable TV is that it still airs programs in
real-time. There is always something on the air -- a sitcom, a
drama, a live sporting event, etc.
YouTube may eventually provide the same option. Until then,
consumers may find that this experimental a la carte option is
good for individual channels they can't get anywhere else, but is
much less effective as a cord-cutting service.
Louis Bedigian is the Senior Tech Analyst and Features Writer
of Benzinga. You can reach him at 248-636-1322 or
firstname.lastname@example.org. Follow him
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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