Most cable television companies currently require customers to subscribe to packages of channels, but consumer groups have recently proposed legislation that would force the companies to offer a la carte pricing. Subscribers would pay less, argue the consumer groups, because they could purchase only the desired channels. However, the cable industry argues that under the current package pricing, popular channels subsidize less-popular ones, providing more options for viewers. For this reason, the industry claims that it is always cheaper for the consumer to purchase many bundled channels than to buy them individually.
Which of the following would be most important for the government to determine before deciding whether to require cable television companies to offer a la carte pricing in order to reduce consumer costs?
A) Whether the total number of channels offered to consumers would decrease, along with programming diversity, as a result of the a la carte pricing structure
B) Whether advertising revenue for the cable television companies would decrease as a result of the a la carte pricing structure
C) Whether the vast majority of consumers would greatly reduce the number of channels purchased if given the option of purchasing them individually
D) Whether cable and satellite companies currently have the ability to buy channels individually from programmers and content providers
E) Whether a la carte subscribers would be required to have new television set-top boxes
This question has been discussed already , but I could not understand the explanations. If you guys can explain each option in short, it will really be helpful.
OA after some discussion.
Cable television companies
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- smackmartine
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smackmartine wrote:Most cable television companies currently require customers to subscribe to packages of channels, but consumer groups have recently proposed legislation that would force the companies to offer a la carte pricing. Subscribers would pay less, argue the consumer groups, because they could purchase only the desired channels. However, the cable industry argues that under the current package pricing, popular channels subsidize less-popular ones, providing more options for viewers. For this reason, the industry claims that it is always cheaper for the consumer to purchase many bundled channels than to buy them individually.
Which of the following would be most important for the government to determine before deciding whether to require cable television companies to offer a la carte pricing in order to reduce consumer costs?
A) Whether the total number of channels offered to consumers would decrease, along with programming diversity, as a result of the a la carte pricing structure
B) Whether advertising revenue for the cable television companies would decrease as a result of the a la carte pricing structure
C) Whether the vast majority of consumers would greatly reduce the number of channels purchased if given the option of purchasing them individually
D) Whether cable and satellite companies currently have the ability to buy channels individually from programmers and content providers [Out of scope]
E) Whether a la carte subscribers would be required to have new television set-top boxes [Out of scope]
.
First take: 640 (50M, 27V) - RC needs 300% improvement
Second take: coming soon..
Regards,
HSPA.
Second take: coming soon..
Regards,
HSPA.
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A) Whether the total number of channels offered to consumers would decrease, along with programming diversity, as a result of the a la carte pricing structure
A tells us that number of channels will be reduced. Industry claims that it is always cheaper to purchase packages. C clearly tells us that vast majority of consumers would greatly reduce no of channels -- implying that many consumers are overpaying.
A just tells about the number of channels and never mentions about the ala-carte pricing vs packaged pricing.
A tells us that number of channels will be reduced. Industry claims that it is always cheaper to purchase packages. C clearly tells us that vast majority of consumers would greatly reduce no of channels -- implying that many consumers are overpaying.
A just tells about the number of channels and never mentions about the ala-carte pricing vs packaged pricing.