Jeremy Lin, MSG, And Time-Warner

This story is interesting. The NY Knicks have a new star player, Jeremy Lin. The Knicks picked him up off waivers. Everyone else got injured, he got a chance to play, and he’s doing very well.

I saw a bunch of articles comparing Jeremy Lin to Tim Tebow. Some editor must have asked for stories on that subject. It’s really no comparison at all, in addition to the difference between football and basketball. The Broncos wasted a 1st round pick on Tim Tebow. The Knicks picked up Jeremy Lin for free off waivers, paying him the 2nd-year minimum salary. (According to this, the Knicks should be able to re-sign Lin for the mid-level exemption next year.) The Broncos had to totally change their offense for Tim Tebow; there’s a reason NFL teams don’t run an option offense. The Knicks are using a standard NBA offense, although it is a Lin-friendly offense.

There is a dispute between MSG and Time-Warner. MSG demanded a 53% fee increase. Time-Warner refused. Now, Time-Warner customers don’t get MSG.

One amusing conspiracy theory is “The Jeremy Lin hype was started to make Time-Warner look bad.” That’s just a coincidence. Also, you can still watch the Knicks when they’re on ESPN or TNT. Lin’s big game vs. the Lakers was on ESPN. The Knicks are on ABC on Sunday.  The Knicks were scheduled to be on ESPN tonight, but ESPN switched games!  (They had to decide a month ago.)  All the playoff games will be on EPSN/ABC/TNT/TBS. Many people don’t take the NBA seriously until the playoffs start.

I’ve mentioned this subject before. Once a year or more frequently, there’s a fee dispute between a cable corporation and a channel provider. This leads to the channel being blocked for some customers.

The real problem is that Time-Warner has a State-granted monopoly. It’s illegal for me to lay my own wires and compete with them.

One standard way to abuse a monopoly is “bundled pricing”. You bundle stuff people want with stuff people don’t want. That maximizes profit. People are forced to pay for stuff they don’t want to get stuff they do want.

The cable monopoly only offers bundled pricing. I have to pick a package of channels, to get the ones I want. I only watch fewer than 10 channels regularly, but I’m forced to pay for all of them. I’d rather pay $2-$5 each for the specific channels I want, than get price gouged.

For example, I hardly ever watch ESPN, but it’s a huge chunk of my cable bill. I pay Time-Warner for the over-the-air CBS/NBC/FOX/ABC signal. I’d rather not pay the cable fee for those channels, and just use a rabbit ears.

It’s a supreme ripoff, that you pay for cable *AND* are still force-fed commercials. It’s double-dipping, to charge me for the channel and also make money via commercials. Only the “premium” channels are commercial free. I was really disgusted, when I found out that you pay for cable TV *AND* still get commercials. (I like my Magnavox 515h HDD DVR, for convenient commercial-skipping.)

The cable monopoly has always resisted unbundled pricing or a-la-carte pricing. The excuse they give is “It’s hard for us to do it! We’re so incompetent that we can’t upgrade our network!” That is nonsense. They refuse to offer unbundled pricing, because bundled pricing maximizes the economic rent from their monopoly.

Maybe I should get an Internet-only package, and then “illegally download” the shows I want. If I do get an “Internet-only” package, my only options are Time-Warner or Verizon. (The other vendors subsist by reselling spare capacity on the big boys’ network. You still pay a tax to Time-Warner or Verizon if you use them.) They want to bundle the TV service with it, charging me only a little more for TV+Internet compared to Internet only.

Another trick that media corporations use is “Each channel has one good show, and then 23 hours of filler.” For example, Comedy Central has South Park, The Daily Show, and The Colbert Report, but almost everything else isn’t worth watching. For another example, on the Cartoon Network, I watch Robot Chicken, Bleach, and occasionally something else. For another example, MSG has the Knicks and Rangers during the winter, but complete garbage during the summer. If Time-Warner holds out until after the basketball regular season ends, then MSG has no leverage until the fall.

It’d be nice if I could just pay for the specific channels or specific shows that I want. In that respect, an “illegal download” is more convenient than buying something legally. (Also, an “illegal download” already has the commercials removed.) I could pay for Internet only, and then join a BitTorrent tracker that archives all TV shows. For shows that are available legally, it almost always comes DRM-crippled, making the “illegal download” superior in every way.

Also with an “illegal download”, I don’t have to set my DVR. If I forget or miss a show, I can catch up later.  Also, with an “illegal download”, I can cache the download in my queue.  For “legal” downloads, it’s usually DRM-crippled, forcing you to watch it in a tiny window and the player doesn’t support buffering.

Time-Warner couldn’t stand up to a “big player”, like NBC/Universal, or Fox. MSG only offers one channel. Time-Warner can afford to drop a small vendor that only offers one channel. The big boys have greater immunity. Also, there’s a quid pro quo among the conglomerates. Comcast/NBC/Universal and Time-Warner may mutually agree to carry each other’s channels for a reasonable fee. Any dispute between two “big boys” would be mutually-assured-destruction, waking up some slaves to corruption in the media cartel. Only small channels can be dropped, like MSG or the Food Network.

Suppose I start an independent TV/filmmaker business. Even if I found other people willing to supply enough content for a 24×7 channel, I’d be shut out. I wouldn’t be able to get the media cartel to carry my channel, even for free (much less for a monopoly-exploiting bundled fee). If Time-Warner wants to start a lousy new channel, they can easily do it, bundling it with the stuff they already sell (i.e. NY1). If I wanted to try and start my own cable TV channel, I’m effectively shut out.

For example, why did Conan O’Brien move to TBS? Why didn’t he start his own channel? He’s still an employee/cog, and not an owner.

The dispute between Time-Warner and MSG is another example of an abusive State monopoly. Time-Warner says “Those greedy MSG executives are demanding too much money!” The MSG executives say “Those greedy Time-Warner executives are refusing to pay us a fair price.” Neither side says “It’s wrong, for the State to give Time-Warner an exclusive territorial monopoly, for selling cable service. It should be legal for Comcast or Cablevision or anyone to lay cable in the same area, and compete for customers.” or “There should be unbundled pricing.  Let every customer pick which channels they want.”

State insiders like to parcel out the economy into monopolies. In a competitive market, there’s little room for corruption, because a corrupt business will be crushed by competition. In a monopolistic market, the graft and corruption opportunities are maximized. In NYC, the State gave Time-Warner, Cablevision, and Comcast exclusive territorial monopolies. You only have one choice, based on where you live. Most slaves will get angry at Time-Warner. The problem was 100% caused by the State, by giving Time-Warner a monopoly.

The correct solution to the MSG vs. Time-Warnet dispute is “Time-Warner should not get an exclusive territorial monopoly.” Another reasonable solution is unbundled pricing. Customers should be allowed to pick and choose the individual channels they want. However, Time-Warner has a monopoly. They will always use some of their stolen-via-monopoly loot to lobby against reform. In this manner, monopolies maximize the, opportunity for corruption.

2 Responses to Jeremy Lin, MSG, And Time-Warner

  1. You don’t need to download. Streaming is technically still legal (supposedly). Just find your favorite TV shows online to stream for free. Of course, you’ll need to be willing to sacrifice picture quality, and you’ll be at the mercy of the streaming site’s speed, which can be rather slow at times. I think HULU or Netflix have decent deals where you pay a monthly fee and get access to all of their material in hi def. Those companies have some good stuff, and you can hook the comp. up to the TV and watch it on there if you want.

    • Why would I pay for Hulu or Netflix for something DRM-crippled, when I get it free via BitTorrent?

      Hulu is unwatchable on my slow connection. It doesn’t buffer properly.

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