The Clicker: Cable channels a la carte
Every Thursday Stephen Speicher contributes The Clicker, a weekly opinion column on entertainment and technology:
Break out those fingers because we're about to do some counting. What are we counting? It's simple: how many cable-television channels do you actually watch? Go ahead and tally them up. I'll wait… Well then – there's ESPN because you gotta have SportsCenter. There's Comedy Central for one's daily dose of the Daily Show. What's left? News channels surely make up a couple — CNN, MSNBC, etc. Or, for those among us with a more conservative bent, there's Fox News and stations of its ilk. Everyone has a guilty pleasure. Maybe yours is E!? SpikeTV? We hear the kids today like their MTV, whatever that is. Members of the fairer sex might stereotypically dial up Food TV. But at the end of the day you've probably got a few spare fingers and, no surprise here, you've also somehow been pushed into the "extended cable" package.
"Eight channels and I'm EXTENDED," you mutter to yourself. You quickly come to the conclusion that you're paying for 400 channels that you don't want. You, like so many before you, wistfully dream of a world in which you could buy only the channels you actually watch. Thus, the dream of a-la-carte programming is born. Is it a realistic dream? Well until recently you would have sooner seen airborne pigs circling high above the frozen tundra of hell, but could that be changing? Early reports are circulating that the FCC could be backing off The FCC is backing off its long-held stance that a-la-carte programming would be financially-prohibitive for cable companies. There's no doubt that it's a bold step. However, the question still remains: is it the right step?
Consider a couple of things. First, you?re not really paying that much for those unwatched channels. The majority of cable television programming costs are due to a few select channels such as ESPN. Most of the other channels are ?forced? onto the cable providers in the form of bundles. The cable companies then pass those bundles onto you in the form of their own bundles. These bundled channels can then boast bigger reaches to their advertisers. If you make a channel like say ?The History Channel? stand on its own, the number of people who watch the channel would plummet. This would cause the cost of the channel to rise which would, in turn, cause the number of viewers to decrease. It?s a standard supply and demand curve and with each decrease in viewership, the loss of potential advertising revenue exacerbates the issue.
Second, your costs could actually go up. It seems hard to imagine that purchasing a few select channels could increase your costs, but it?s true. Besides some of the classic supply and demand-type arguments addressed earlier, there are technical issues with a la carte programming. Currently, most cable systems lay out their networks as a mixture of digital and analog. ?Basic? cable takes up the first 30 or so analog channels. ?Extended? cable usually lives on analog channels 30 to 60. Premium stations and the rest generally require a digital cable box. Cable companies then use a combination of extremely low-cost analog filters and cable boxes to dictate which packages you receive. Imagine, on the other hand, a world in which users are able to pick and choose their channels. Every television would need a cable box.
Do you think that the cable companies would, out of the kindness of their hearts, give you four boxes so that you could see your twelve dollars worth of programming? That seems doubtful. More likely, they would charge an arm and leg for them. They would, of course, give discounts to those customers who purchase a certain amount of programming. The end result would likely be decreased channels, increased hassle, and no real savings.
With all the above said ? what?s most infuriating about this recommendation isn?t that it wouldn?t really benefit the consumer. It?s not the fact that it?s being backed under the guise of decency (conservative groups argue that they can?t buy ?Family Programming? without also subjecting their families to all the filth). It?s not even that the FCC is, once again, attempting to engage in a blatant power-grab. At this point in time, we?re used to that; just think back to the broadcast flag.
The real problem is that they?re attacking the wrong place in the chain. If the FCC and lawmakers are willing to disrupt business models and, quite possibly, the first amendment, they should attack the problem at the source. Instead of forcing cable providers to offer consumers stations a la carte, lawmakers should force media companies to offer channels a la carte to the ?cable? companies. It?s a small change in the plan with the potential for very big things.
Imagine, for instance, that a hypothetical IPTV company wanted to create its own sports package. Currently, the rights to these stations would be cost-prohibitive. However, if distribution companies were guaranteed the right to buy individual channels at competitive prices, we could see an explosion in different offerings to consumers. The possibilities are endless. Cell companies could get in on the act. Imagine phones branded with channels. Kids walking around with their ?Cartoon Network? phones. Men walking around with their ?ESPN? phones (yes, it?s true that ESPN has dipped its toes into these waters). However, these are done as partnerships with the cell companies and are often exclusive to one carrier. In the new a la carte world, any cell company could become a distributor. They must simply pay the media provider the competitive channel-rate for that station and presto ? they?re a ?cable? provider.
Small, agile companies would have access to content heretofore reserved for major cable/satellite players. This could spur technological advances and open different markets. Unlike the current a la carte to consumers proposal it?s a change that could bust open the markets.
Will any of this ever come into fruition? Probably not. However, if you?re going to dream, dream big and do it right.
If you have comments or suggestions for future columns, drop me a line at theclicker@theevilempire.com.