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Sen. McCain Wants ‘A La Carte’ Cable/Satellite Pricing



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Variety:

Sen. John McCain (R-Arizona) on Thursday unveiled legislation that would upend the cable and satellite business, forcing them to let customers pick-and-choose which channels they would like to get rather than take programming in bundles.

“The video industry, principally cable companies and satellite companies and the programmers that sell channels, like NBC and Disney-ABC, continue to give consumers two options when buying TV programming: First, to purchase a package of channels whether you watch them all or not; or second, not purchase any cable programming at all,” McCain said in remarks prepared to deliver on the floor of the Senate.

“This is unfair and wrong, especially when you consider how the regulatory deck is stacked in favor of industry and against the American consumer.”

The rest here.

To counter McCain’s argument, Variety’s Andrew Wallenstein thinks the idea of a-la-carte is pricing out-of-date and makes no sense in today’s “on-demand” world:

A la carte might seem too damned reasonable to criticize. After all, if the average U.S. home watches only about 16 channels per month out of the 135 channels a typical pay TV subscription provides, why can’t it just be given a menu from which to pick and choose channels?

But programmers and distributors have more than $30 billion worth of reasons to not break up the bundle of channels they’ve sold together since the pay TV biz began.

Still, let’s put aside for a moment the contention that content companies have long made, which is that individual channels would cost so much more in an a la carte scenario that unbundling won’t be worth it. Instead, think about your favorite channel: How many individual programs on it do you regularly watch?

There’s no available data on this, but consider there are maybe one or two channels out there at most that inspire the kind of devotion where you’re watching more than half of the content available on a particular channel. But beyond that, who really watches more than 10% of what’s available on any single channel?

In our long-suppressed zeal to free ourselves of the multichannel bundle, it’s easy to overlook that a network in and of itself is just another kind of bundle.

A la carte is a conceptual slippery slope: If a consumer is given the ability to cherrypick, say, Bravo, but forgo Disney Channel and Nickelodeon why would the same consumers be OK with paying for Bravo shows “Rachel Zoe Project” and “Watch What Happens Live” when all they want is “Top Chef?” If I just want one hour of a channel, why would I pay for 23 others I don’t want?

And if you enjoy “Top Chef,” it’s possible you’re likelier to watch Food Network’s “Chopped” or HGTV’s “Ace of Cakes” than non-foodie Bravo programming. A cross-channel purchase based on genre is more compelling than any one channel.

A la carte confuses the true brand currency of the TV kingdom: it’s the shows, not the channels. The programming-to-pricing ratio will be out of whack as long as the channel model holds sway.

To create a marketplace truly better off without the bundle, content companies would have to share their product in one massive trove for onestop shopping of tens of thousands of programs, where they can be re-aggregated by consumers free of traditional borders including channels, production companies and the conglomerates themselves. Then let great user experience and data-mining take care of the rest.

The whole thing here



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