Exploding TV: Death on the a la carte menu
FCC Chairman Kevin Martin is again pushing a la carte cable.
Like every cable customer, I resent paying for channels I don’t want. I hate sports. I cannot abide religious nuts. I don’t speak Spanish. I miss various demographic targets. I have no use for tons of channels and would prefer not to pay for them.
At the same time, I think the marketplace will take care of this in the form of a la carte program downloading and purchasing on the internet. The fact that I can watch Desperate Housewives via iTunes — albeit at a high price — broke the lock that cable MSOs had on programming.
Martin is now speeding up the process.
For if a la carte pricing really comes into effect, it will kill off lots of channels that could not be supported in the open marketplace. That is, there aren’t enough people willing to support channels on their own and they survive only because they are subsidized via bundled pricing and cozy deals among the holders of content and distribution in cable. If they had to make it on advertising alone, they’d fail. If they had to make it on consumer fees alone, they’d fail. They simply don’t have the audience to support either. But cable companies make more by making us buy more TV and so they survive. That is the system Martin is threatening to break.
And when it does break, this will drive people to finding different, better, cheaper, easier means of getting the programs they want. And it will drive program owners to find more and more efficient ways to distribute their shows to larger audiences. Just as today, we no longer know the difference between broadcast and cable, soon enough we won’t know whether the shows we want to see come from a network or from the internet. And when we reach that world, we’ll no longer be hostage to network programmers’ schedules. And then we’ll have to ask: What is a network, anyway, and why do we need them?
The world of on-demand content is coming.
The funny thing is that Martin, a Republican, is using his indecency crusade to hurt big business big time. At FourSquare, I challenged him on this, saying that the FCC’s and PTC’s fringe minority jihad against Howard Stern and free speech forced Stern to satellite and immediately shrunk not only the businesses of Clear Channel and next Viacom but also the entire radio industry. I said he should be paying attention to modernizing our infrastructure instead of to Stern’s farts.
Now, by threatening regulation and censorship of cable in the form of trying to force a la carte pricing, he will be doing the same thing — he will be shrinking the network TV business.
For those who want to cheer Martin from the perspectives of fighting for consumers or fighting against big media, remember: You are dancing with the devil who wants to censor your speech. Danger, danger, Will.
This morning, Howard Stern had a good laugh about this for he said that the FCC will only kill tons of cable channels. I agree. I looked at the lineup I’m forcefed by Cablevision.
The channels I want: NBC, ABC, CBS, Fox, HBO (though I’d rather watch it on demand), PBS, HGTV (the wife), CNN, FoxNews, Disney (though the kids watch that on demand), Nick (for a bit longer), Comedy (thank you, Jon Stewart), VH1, Encore, maybe the Weather Channel (though I get weather online now). That’s pretty much it.
The channels I don’t want, a partial list: WB, UPN, Pax, any religious channels, any Spanish channels (don’nt speak it), News12 (cheesey local cable news), MSNBC, CNBC, Discovery, Discovery Times, Discovery Home, TLC, Toons, TVLand, all the ESPNs, USA, TNT, Fx, TBS, Spike, WE, Oxygen, AMC, Bravo, Lifetime, A&E, Sci-fi, History, ABC Family, MTV, E! (without Howard, what is there?), BET, Fuse, Animal Planet, Travel, Fit TV, Speed, YES, MSG, FSN, QVC, HSN, Game, TCM, Golf, Biography, Military, G4 (after they ruined TechTV), FMC, Hallmark (yech)…. And on and on….
OK, I might want to see an occasional A&E show — occasional as in twice a year. So they charge me $2 each. I’d pay the price.
Or they’d be desperate to keep viewers for their ad base and they’d end up distributing their channels and every show on them online. That’s where this is headed. And the FCC is speeding it along that path. Is that the FCC’s job? Is so-called indecency the reason to do it? No on both counts. But it’s fun to watch, for the end result may well be more control of media in our hands. And that is a good thing.
: LATER: Glenn Reynold says:
SORRY, BUT THIS IS INCREDIBLY STUPID:“You can always turn the television off and, of course, block the channels you don’t want,” Martin said, “but why should you have to?”
Um, so that other people can watch the shows they want to, maybe?
Tags: Exploding_TV, Howard_Stern
November 30th, 2005 at 1:00 pm
once TBN finds out that they will be out of business the Republicans will crumble on this bizarro stance.
(when will they go back to being about less/small government and pro-business?)
have no fear.
you’ll get to see A&E twice a year
(mysteries of the bible, bro!)
November 30th, 2005 at 1:11 pm
A la carte is a lot like a low tech V-Chip. Most TVs have them but parents still complain about the content. Strange. Now at least the censors have to own up to the fact that the parents are making a conscious decision to bring the content into their homes.
The Playstation 3 will also have parental controls built in but odds are most parents will ignore it and continue to complain about the blood and guts.
November 30th, 2005 at 1:19 pm
If this works like the food I choose from the salad bar, everything I choose will be bad for me.
November 30th, 2005 at 1:20 pm
Tony, I don’t think Pat Robertson is nearly so well beloved with the GOP as you believe.
Kirk, I see a-la-carte as a HIGH-tech v-chip. Why should I have to filter out something I don’t want on each of 5 TVs, rather than take care of it once in my subscription?
“Indecency” is the justification being used to push this, but of course that means different things to different people. For Jeff, TBN is indecent. Which is what makes a-la-carte the perfect solution.
Imagine if the cereal manufacturers wouldn’t let grocery stores sell Raisin Bran by itself, but only in those 10-packs where you also get a box of Captain Crunch and Sugar Pops. That’s the model Disney is fighting to maintain.
November 30th, 2005 at 1:33 pm
Does anyone really think that when cable is unbundled, we will pay less and get more?
November 30th, 2005 at 1:36 pm
Imagine if the cereal manufacturers wouldn’t let grocery stores sell Raisin Bran by itself, but only in those 10-packs where you also get a box of Captain Crunch and Sugar Pops. That’s the model Disney is fighting to maintain.
A more apt analogy would be, imagine if Newsweek wouldn’t sell you individual pages you wanted to read, but made you buy the whole magazine!
Of course, that basically is what’s happening with online versions of print magazines (we just look at the pages we want; we don’t pay anything though). But pretending it won’t have consequences and, indeed, kill many of the things we want to keep when they’re no longer supported by package deals.
I wonder what tune Jeff will be singing when a few of HIS choices are killed off by this brave new world he’s so pumped for.
November 30th, 2005 at 1:50 pm
As I wrote this morning, the real story here is the unbundling of media and the continuing collapse of the mass market. We’re going to have to figure out a whole new way of buying and selling, and that’s just fine with me.
November 30th, 2005 at 2:45 pm
A full switch to a la carte pricing, it seems to me, would lead to the death of a huge number of programming outlets and thus diminish choice for everyone. There are a lot of channels I don’t watch often, but I like the option of watching them if they have something on that’s appealing. There aren’t a lot of people who would pay for the international section of the newspaper, either, but isn’t it nice that it’s subsidized by the sports section and (for now) the classifieds? And while you (or I) might argue that the relative worth of BET or the Speed Channel pales by comparison with that of international news, I’m uncomfortable taking a step that would result in a diminution of voices in the marketplace.
November 30th, 2005 at 3:45 pm
Bundling is a refuge for those who are unable or unwilling to listen to customers and anticipate what the market wants, needs, and values. Bundling protects companies from making hard choices and dumping dogs, yesterday’s breadwinners, and investments in executive egos.
Unbundling forces discipline that (after the tears have dried in the boss’s washroom) will make their companies better.
And sure because of their cozy agreements with localities and politicians the first instinct will be to try and gouge a la carte buyers. But within time alternatives (and boycotts and political pressure from the other side) will force cable prices lower or the value of their offer higher.
In the end another sector of the economy will have to finally accept that the customers (the long tail) are wagging the dog.
November 30th, 2005 at 4:08 pm
“The funny thing is that Martin, a Republican, is using his indecency crusade to hurt big business big time. ”
“Big Business” and Big Media are not bedfellows in the Republican party.
True Republicans defend all business, Big and small while the NYT and its ilk trash all businesses.
Anyway we need a la carte pricing for health insurance. Please everyone tell your socialist state legislators.
The states tell insurers they have to cover a whole panoply of ridiculous services like acupuncture and aroma therapy, instead of letting consumers pick and choose.
Pardon my French but I love “a la carte”.
I am pretty sure that something called IPTV (Internet Protocol TV) is going to make the cable pricing issue dead on arrival soon anyway.
November 30th, 2005 at 4:17 pm
“Kirk, I see a-la-carte as a HIGH-tech v-chip. Why should I have to filter out something I don’t want on each of 5 TVs, rather than take care of it once in my subscription?”
Good point but you don’t have to do anything. But if you don’t you can’t complain about content because you don’t want to take the time to figure out your TVs. Also, the V-Chip is better because maybe you want to restrict content on your kid’s tv but not on the one in your bedroom? If you just don’t subscribe that’s not an option.
As far as the death of channels I don’t buy it. If you’re talented you can create an IPTV show http://www.iptvshows.org/ put it online, grow a fan base and eventually smart TV execs will throw cash at you for the broadcast rights. Or, like the guy who invented BitTorrent, you make a healthy living giving it away and taking 100% of the money from the tip jar or intelligently embedded ads that can’t be edited out.
November 30th, 2005 at 4:31 pm
What amazes me is that V-chiped TVs have been readily available in the marketplace for over ten years and most people still don’t know how they work or that the chip is even in their sets. This weekend I was watching some tube with my brother and his wife and one of those PSAs popped up explaining how the V-chip worked and my sister-in-law got all excited. “I didn’t know we could do that!” she exclaimed. I shrugged and said as long as they had gotten their set after they got married it shouldn’t be a problem at all. We need education on this, not legislation.
November 30th, 2005 at 5:00 pm
Mike, I still say my cereal analogy is closer to the mark than your magazine analogy. Articles in a magazine are like the programs on a channel; at that level you have to subscribe to the whole package. But if you want to subscribe to Newsweek, you aren’t forced to buy a package that include Highlights for Children, Popular Mechanics, and Maxim.
November 30th, 2005 at 5:43 pm
Is this true? I’d always understood that, with the possible exception of the premium and vertically-integrated channels, it was more often a case of the channel paying the cable operator rather than the reverse. Actually, once the infrastructure for a la carte billing is in place, the result might be more choices. (It’s only bandwidth, and more choices->more revenue for the operators.)
…but who keeps stumbling over his own feet as he acts to weaken his case. With a la carte, the busybodies can no longer argue that people are being “forced” to take programming that they don’t want, and that innocent third parties (e.g., The Children) are being harmed thereby. If the individual has the control, who needs a Federal Censorship Commissar?
November 30th, 2005 at 5:50 pm
OT administrivia: Jeff, I used no “strong” tags in the above post, and there was no bolding visible in PREVIEW. What happened?
November 30th, 2005 at 6:25 pm
CaptiousNut said: “True Republicans defend all business, Big and small while the NYT and its ilk trash all businesses.
Nonsense. They “defend” whomever can send sufficient money their way and will betray them as soon as someone else sends more money, whether it’s big business or a small business lobbying group. Howard conducts legitimate business, as does the NYT yet I feel that since the GOP considers them a threat, they will continue to be demonized.
November 30th, 2005 at 7:02 pm
A couple problems with “a la carte” cable
Bundled cable pays for the channels that are extremely valuable to a few people but would never rake in enough cash to survive an a la carte system. ex: animal planet.
Although I don’t want most channels most of the time… it’s great to surf sometimes. I never watch Spike TV except for the Bond marathons. Maybe you don’t like sports, but there happens to be a big game on while a relative is over and they’d really like to watch it. Maybe everything on USA sucks, but all of a sudden they come out with next season’s best show. A la carte puts too many limits on what you watch.
November 30th, 2005 at 7:07 pm
No one wants to censor speech. If I choose what I want–no Maher, no MTV, no garbage I don’t want, then that is a real exercise in free speech. Why should I pay to block crap I don’t want–it’s like deleting spam from my email. I’d be happy with a dozen chosen channels and I’d even pay more–just to remove the current crap I am forced to pay for. GREAT NEWS!!
November 30th, 2005 at 7:19 pm
Um, so that other people can watch the shows they want to, maybe
I say that if the 700 club channel can’t carry it’s own weight, good riddance. Find some other way to distribute that content then.
Seriously, does anyone honestly think that we owe everyone their every whim in what channels to watch, even if we don’t care to watch them? Bundling is an outmoded strategy to force content on people who don’t want it. Bring on the a la carte, and those people who end up losing distribution will find cheaper ways to distribute, if they really have enough demand to make money somehow.
November 30th, 2005 at 8:09 pm
This would be a great development. I don’t have a tv. Getting cable with just IFC, Sundance, PBS and Gol Tv (European Soccer) would be sweet. I don’t have a tv because I know it’s too tempting to waste time in front of it instead of going out or reading. With just the four aforementioned channels, then no other noise to inhibit your mindspace. How can we make this happen.
November 30th, 2005 at 8:41 pm
Just to point out that most MSOs likely still have a significant installed base of settops and other premises gear that can’t do ’selective availability’ at the channel granularity. OTOH, both DirectTV’s and Dish’s entire installed base could do ‘a la carte’ tomorrow, being entirely digital from day one. If one of them flips over, the game is done. The TV guys, however, would have problems with making the differences between IPTV and conventional video transparent, since there’s a serious bottleneck problem in orbit, once viewers go to timeshifted narrowcasting.
November 30th, 2005 at 8:44 pm
In the above ‘TV guys’ s/b ’satellite TV guys’. PIMF…
November 30th, 2005 at 8:46 pm
I like the History Channel, Fox News, Discovery, Sci-Fi, movies. I dont like religious, Spanish or Country TV.
November 30th, 2005 at 8:50 pm
This morning, I came across this in an article this Washington Post article by Robert Sameulson on GM:
To Grove, business is chaotic and unforgiving. It is full of what he calls “strategic inflection points” — transformational changes that, if grasped, can guarantee a firm’s growth and, if not, can cause its death. Grove warns that “strategic inflection points are not a phenomenon of (only) the high-tech industry.” Witness how Southwest Airlines and its imitators have bankrupted many traditional airlines. People who succeeded under one business model often can’t acknowledge its impending collapse.
Sloan shrewdly foresaw that too much success could be fatal. It might dull “the urge for competitive survival,” which is “the strongest of all economic incentives.” Companies might fail “to recognize advancing technology or altered consumer needs.’
(1) Radio, Television, Film, Periodicals and Telecommunication industries are simultaneously confronting strategic inflection points. Allowing consumers to create their own bundles in and of itself will not trigger television’s contraction.
(2) Cables companies are failing to recognize altered consumer needs.
(3) Cable companies that offer bundled packages to specific demographics and interests will do well. Cable companies need to adopt TIVO-like functionality. By monitoring viewing habits, they not only recommend alternative content but products.
PS - I haven’t owned a television since 1987. The $50-$60 for cable access is instead allocated to concerts/theatre/books. If I could get local dialtone, long distance, broadband and cable television for $75/month, I’d sign on. What’s driving unbundling is also the perception that cable television pricing is a racket.
November 30th, 2005 at 10:35 pm
In the long run we’ll be dealing with content providers. No more networks, no more channels. We’ll download programs off the net, and view them when we wish on our monitors. Sometimes we’ll stream a show live. Most of the time we’ll watch a recording.
In the short run it’ll mean the end of programming with low demographics. But, depending on how producers handle costs and advertising, even low volume programming could find a niche. So long as producers find an audience willing to pay enough to cover the costs of production, even projects with limited viewerships could make it to the Internet.
If anyone is endangered by true ala cart tv, it is the cable companies. Once the technology is in place to allow the large scale distribution of video over the net, cable companies will either have to reinvent themselves, or go out of business.
Add the technology for cable lines to carry signals from multiple providers, and things will change even more.
Change is coming, adapt or die.
November 30th, 2005 at 11:15 pm
“Does anyone really think that when cable is unbundled, we will pay less and get more?”
So true. Remember when we were told that paying for a service that used to be free would usher in the new golden age of TV, commercial-free? Some new channels are good, sure, but mostly we have reruns and niche channels for non-English speakers and endless cheezy ads.
I recently wrote to my provider to give me a channel I want like TCM instead of the half dozen or so channels in other than English. Everyone seems to be waking up to the fact that this model is not working. For the show or two I could wait for on DVD, I am considering going back to pre-cable days. Is this service worth $600 per year?
December 1st, 2005 at 12:35 am
A few thoughts….
The existing business model is all about corporate welfare, and very little about a free-market. Tiers of service where you pay for something you don’t want in order to get something that you do want is very anti-consumer. Packages were tollerable when there were 30-40 cable channels, but not today.
Requiring cable companies to sell channels a la carte does not mean that they HAVE to stop selling packages.
Cable companies won’t go broke adjusting to this new business model. Most have already upgraded their infrastucture and have rolled out digital cable in most areas. If you have a digital cable box, they can unscramble a two-hour PPV movie and bill you for it automatically. Certainly, they can individually block and add channels without causing an billing nightmare. All they need is an FCC regulation or US law that allows them to break long-term bundled contracts that they have with vertically-integrated companies like Disney-ABC.
I hope the FCC has the brains to outline a price control. Not a dollar amount (that would be anti-free market), but rather a percentage. Words to the effect of: “the total cost of all channels in a package priced individually cannot exceed 250% of the package price”.
I think it’s extemely alarmist to think that Americans will all immediately pare down their cable subscriptions and bankrupt ‘niche’ channels. Most people like variety, and will be more likely to dump some channels in their current package and then ADD some channels from a higher tier that was previously too expensive.
So you may see some subscriber loss from people that currently subscribe to everything (can’t possibly add more channels if you get them all), but you’ll likely see an increase from ‘broadcast basic’ cable subscribers that want a few more channels but never wanted to pay the ‘ESPN tax’.
Let’s not forget what ad-supported television is all about–yup, advertisers. Advertising has to be aligned to reflect actual subscribers instead of ‘in available homes’. The former number may be much smaller than the latter, but those viewers are more likely to see a commercial. They paid for the channel, so they are more likely to watch it.
A la carte is the way to go.
December 1st, 2005 at 6:53 am
The FCC is truly doing wonders for the internet. You can watch most of your favorites onsite through videos and the news is much more palatable when you can choose to see/read what interests you. Hey, let’s read our own books, we don’t need to see them done poorly. Go, Ted Stevens. Why didn’t he retire? The bridge to nowhere was axed, and he promised. I’d be willing to pay to watch him retire, really.
December 1st, 2005 at 9:54 am
While I also like the idea of a la carte pricing, I believe it’s wishful thinking to say this will be cheaper for the consumer. Maybe if all you want, like Jeff, is four or five channels, then yes a la carte might be cheaper. However, cable and satellite providers will price individual channels at a level where the more channels you want, the cheaper it would be to purchase a package deal. Economy of scale will kick in and consumers will purchase a package. A better option for providers would be to provide niche packages, so if you want only religious and family programming, then you don’t get those risqué programs on F/X, USA or MTV if you don’t want them. Like any service company, cable and satellite providers will need to adapt in order to survive. The same can be said for niche cable channels. They need to embrace on demand programming or they’ll go the way of the dodo.
December 1st, 2005 at 1:47 pm
[...] Update: Jeff Jarvis gives his take on the matter here. [...]
December 1st, 2005 at 2:09 pm
Jeff, You don’t mention C-SPAN as a channel you’d want — but I’m guessing that’s how you watched the Senate panel on indecency…C-SPAN and other independent voices would not fare well under an a-la-carte scheme.
December 1st, 2005 at 2:38 pm
You can watch C-SPAN online for free with RealPlayer too.
Imagine the Amazon recomendation and review system but applied to episodes. It would solve the niche exposure problem and would encourage quality over filler. Shows wouldn’t have to be strecthed or contracted to fit some arbitrary standard slot. Imagine if all movies were forced to be exactly 90 minutes. Lord of the Rings would have suffered and an extended version of Deuce Bigalo would have lead to untold suffering.
December 1st, 2005 at 5:30 pm
It really want comes down to this. I want the cable companies to be driven by what consumers want to buy, not by what the content companies want to sell.
December 1st, 2005 at 7:27 pm
this is actually a great idea that will revolutionize the way we receive content in many many ways. first off, let’s not confuse the a-la-carte scheme with the demise of cable tv packages. packages will still exist.
however, instead of offering some nonsensically named “rainbow” package (cablevision) the cable companies will offer you something like the 20 basic, or the 10 premium channels. so instead of paying for literally hundreds of channels which you will never ever watch (think all the spanish, italian, korean etc channels) you will be able to pick out your favorite 20 channels, or your favorite 10 premium channels for a set fee. if you’re a sports fan, pick up a sports 5 pack and get YES, MSG and three other sports network that may interest you.
if that’s where they’re going then yes, i like it.
December 1st, 2005 at 7:27 pm
First, I think that Jeff is overstating when he says that every cable customer resents paying for channels he doesn’t watch. Maybe I’m unusual in this, but I don’t mind being able to watch HGTV, say, even if I only choose to do so once a month. Or even if I never do so. You might as well resent the fact that you pay for cable when you’re not home, or reading a book. I like having plenty to choose from, and I don’t want to decide individually which of 300 stations I want to subscribe to.
Second, it’s quite possible that there really are reasons why bundling actually is more efficient, even if the market isn’t perfect. The reason that the grocery doesn’t make you buy asparagus with the milk or eight boxes of cereal is that it really does increase the price they would have to charge, since the extra milk/asparagus/cereal is an actual physical product that has to be produced and shipped to the store. TV programming, by contrast, is an intellectual property good. Once the cable company has wired up your home, put in the satelite dishes, and signed up the cable network, giving Jeff Jarvis ESPN adds very little to their costs. And, if nothing else, having everybody decide on an individualized basis whether they want each channel would add to the administrative and technical costs. With, say, four tiers of service, there are four different types of customers, but letting everybody subscribe ala carte would result in millions of combinations. Keeping track of all that would probably be more expensive than the current system. And, why bother? A couple of people here may be annoyed at being “forced” to get ESPN, but I assure you that most people don’t stew over the fact that they’re “forced” to purchase channels they don’t watch.
Do I know what a system would look like if we had a real market for cable TV services, one where people actually chose between four or five cable providers? No — and neither do you. But I think it’s within the realm of possibility that in a perfectly-competetive market content providers would end up selling access to TV in blocs, pretty much as they do now. I suspect that prices wold decline, and we’d have more on demand services and such, but I’m not convinced that a more freee market system would lead to ala carte pricing, or individualized purchases of shows.
And I suspect that, even in that universe, the folks who complain about how parents can’t stop their children from watching Bad Stuff would still be complaining. I mean, we were told that the V-chip and tv ratings system would help parents, but now we’re told that we need something else, because people have a god-given right to be too lazy to set up the parental controls on five TV sets. If we go to ala carte programming, they’ll find some reason why that’s not enough. Nor am I convinced, by the way, that parents are actually bothered by this. I think that most parents who want to control what their kids watch on TV already do so, and most parents who don’t care won’t care even if we introduce new technology to “help” them.
Kevin Martin may ask “why should they have to” use the v-chip or blocking system put in place by the cable company, but I’m wondering why, by governemnt fiat, we should restructure an entire industry just for the guy with five TV sets who is too lazy to get off his fat behind and program them so his kids can’t watch South Park on any of them. For that matter, why isn’t he complaining about all the single guys and chidless couples now being forced to buy a V-chip equipped TV sets, when nobody uses them? Granted, it’s a small additional cost, but it does cost something.
December 1st, 2005 at 8:12 pm
Getting A La Carte or “unbundling” to become a reality will take monumental politcal will on the part of the FCC. I have no doubt that consumers would appreciate the option of choosing precisely what channels they wish to pay for. The pushback from the program networks and cable operators on this issue will be enormous simply because the business model and underlying economics of the industry are almost entirely founded on a system of forced buy-through and they will fight like the dickens to preserve it. Here’s why:
All the major cable/satellite networks have baseline distribution provisions in their contracts with their affiliates that state that a their particular channel will be “part of the broadest (basic) tier of services offered to subscribers.” This very precious provision ensures that the networks have a guaranteed per-subscriber revenue stream for the term of the agreement that is calculated using the affiliate’s entire subscriber base.
For the programmers, this is a sweet deal by itself… but it gets even better because that contractually guaranteed, universal distribution of their channel gives them something even more profitable.
Most people outside the industry do not know that for the top 25 cable/satellite networks nearly 60% of their gross revenues are derived from national advertising. If the Gov’t were to force them to change the terms of these contracts; insisting they make allowances for individual channel purchase, this would be incredibly disruptive to what has been a phenomenally successful business model. The networks are greatly concerned that their total (actual) subscriber count would drop precipitously; followed by a corresponding drop in national ad revenues.
Of course, from a purely free market standpoint, such an un-bundling practice would represent the best of everything: consumers only pay for precisely what they want; the “true” value of a given network will be based solely upon how it performs in the “open” market, and advertisers will be able to judge the effectiveness of a network based not only on its program ratings calculation, but the actual number of people who like the network enough to pay for it.
I believe this change will eventually take place, but when considering the near term outlook, I have great doubts that it will happen within the next three years- there is simply too much money at stake in the existing way of doing business.
December 1st, 2005 at 11:06 pm
[...] Rafat reports that Cablevision has defected from the MSO ranks and is supporting a la carte pricing. Phone companies AT&T and likely Verizon would likely join. See yesterday’s post for what happens next. [...]
December 2nd, 2005 at 1:59 pm
A La Carte programming is something that I was pushing for long before tyrannical baby-faced moralists like FCC Commissar Kevin Martin even knew what it meant. The concept, in and of itself, is good because it provides true choice for the consumer.
Unfortunately how this concept is being used is what offends me. This is simply a wedge issue for the freedom-haters. Remember the V-chip? Remember how they pushed for this and how the networks eventually relented and came up with their own rating system?
And what did the moralists do? When the rating system was simple, the moralists complained that it wasn’t descriptive enough. And when a more descriptive rating system was set up, the moralists then said that it was too complex!
And even with the ratings system, even with the V-chip, even with the “established hours for indecent programmingâ€, moralist parasites like L Brent Bozell continue to push for GOVERNMENT control of the airwaves.
It is a SCAM!
So let’s follow through on this… a la carte programming gets imposed and what happens? All of those religious channels get written off. Oops! Can’t have THAT, can we? Jerry Falwell and Pat Robertson will scream CENSORSHIP. Bozell and his acolytes will scream about the absolute NEED for religious programming for “family stabilityâ€. Ted “Pork Crybaby†Stevens and F “-You†James Sensenbrenner will DEMAND that there be “necessary exceptions†to the a la carte programming. Commissar Martin will warn cable companies to come up with “exceptions†or else he’ll get Congress to do it for them.
And the only way that the cable companies would continue to exist would be to cave in yet again. They’ll provide those “required channelsâ€, and then get rid of the ones moralists like Bozell hate… lest people like Stevens and Sensenbrenner allow Commisar Martin to impose “indecency†fines on the cable companies as well as the networks and participants.
See how the SCAM is played?
December 3rd, 2005 at 11:46 am
I watched the hearings the other day when Congress heard testimony about controlling “indecency” on TV.
The best things heard in the hearings were focused around promotion of the V-chip and setting up a tier of programming (yes, a bundle) of family-friendly stuff. Getting people–both parents and cable service providers–to be a little less lazy and to use the very adequate tools already provided should be the most important thing, not more censorship or more broad definitions of subjective judgements like “indecency” or “obscenity”…
But, in reading the comments here, I’m surprisesd some of the folks, including you Jeff, don’t remember when most of cable *was* a la carte. Maybe I’m just dating myself, or my collective memory is much longer than most people’s, but I do indeed remember when “basic” cable was little more than better reception for local UHF and VHF stations with a few newbie networks like Turner and some of the others superstations. Anything beyond that was premium and many times a la carte–which drove cable bills up to levels over $100 a month for one HBO channel and a few others that were designated “premium” by whatever cable system a particular region happened to have.
That’s the other thing–what’s offered as “premium” is often, like “obscenity” and indecency,” subjective. What is a premium cable channel to one system is, still, not what it is to another.
Bundling is not a perfect system. There are still differences in bundling according to cable service provider, which varies from town to town. But bundling offers more choices because it is far cheaper than a la carte ever was.
And Jeff, why should I want to limit my television choices with a la carte? My internet surfing is a la carte. I pick and choose what I want to see/hear/read when I want it. Television is a different form of media. It is not interactive like the internet and therefore I happen to appreciate the different choices–even when those choices include weird nuttiness like the pink haired psycho-evangelist on the Trinity Broadcasting Network. If I am always having to choose what I want to watch, rather than just letting it be there for me to gawk at like when I rubberneck at a bad car wreck, there then becomes no need for me to have TV.
If you really want a la carte, get TiVo.
December 3rd, 2005 at 5:31 pm
My response to to posters:
Tish-
Sorry to contradict you, but your memory about the history of cable packaging and pricing does not at all square with reality. There’s a wealth of historical pricing data from the past 20 years (both industry internal, FCC and industry-analyst (like Kagen) and cable rates have risen on average of 2-3 times inflation since the end of regulation. The average price for cable service in the early 1980’s was $22. Back in the period you descibe, which I estimate to be around 1979-81, the only a’ la carte offerings were the pay TV movie channels like HBO and Showtime. These were typically priced at $10-12 each and cable operators typically gave multi-pay discounts for those people who took more than one. Basic cable rates - which you correctly pointed out were almost exclusively off-air retransmission- averaged $10-13/mo. In addition, given the limited number of services that were even available back then, it is extremely unlikely that anyone could have been paying close to $100/mo unless it was a commercial account like a motel.
Blooky:
Your quote: “…giving Jeff Jarvis ESPN adds very little to their costs.”
ESPN now charges their distributors between $2.00- 2.50 per month per subscriber. You picked the most expensive basic network as your example of how grouping channels together in a forced buy-through scheme doesn’t significantly impact overall pricing.
January 4th, 2006 at 7:28 am
[...] Some people have claimed that channels are dead. They wait paitently for the days when television is delivered a-la-carte, where watching TV is simply picking shows from a list of options. [...]