Maybe next year, a-la-carte cable

June 29, 2006

Just to update readers on a low-profile story I’ve been following, the Senate Commerce Committee took up a proposal yesterday to allow cable customers to pay only for those channels they actually want. How’d it turn out? The vote wasn’t even close.

Cable networks’ advertising sales divisions may be breathing a sigh of relief now that the Senate Commerce Committee rejected a Sen. John McCain proposal that would have forced [tag]cable[/tag] operators to offer consumers [tag]a la carte[/tag] programming.

The 20-2 vote against the provision was part of a day-long effort in working on a video franchise/telecommunications-reform bill.

As I explained in March, clowns like Pat Robertson and Jerry Falwell were in a genuine panic over this. The FCC says that the average household watches only 17 channels — and apparently, evangelical right-wingers aren’t pulling in the viewers. To help lobby against the per-channel pricing, Robertson’s CBN, Falwell, Benny Hinn Ministries, Trinity Broadcasting Network, Robertson’s American Center for Law and Justice, and FamilyNet TV teamed up to save the cable system that helps keep them on the air.

So, in this sense, [tag]televangelists[/tag] won yesterday, but I wouldn’t give them too much credit for this one. The reality is, as Media Post explained, “a la carte could have affected billions of cable network advertising dollars by diminishing the number of subscribers for all networks — and thus potential viewership.”

It’s an interesting issue, though, which I suspect will be back again next year.

The corporations won and the consumers lost.

  • One thing I don’t understand is this: if these guys aren’t pulling in the viewers, why are they still part of the cable packages? I mean, cable earns its money from subscriptions plus advertising. If these guys aren’t getting viewers, presumably they can’t make money on advertising, so then they are losses for the cable companies to carry.

    Can someone explain what it is that I’m missing about the structure of the cable television industry? Do they pay to be part of the packages? And if so, how much? Because if they’re okay with losing money (as it appears they must), why should they care if they’re only broadcast to smaller numbers of people?

    And if my comment is scattered and doesn’t make sense, I apologize, but the whole thing just seems a bit off to me.

  • Consumer choice should drive the marketplace: another lie Republicans spout yet don’t approve of when it’s time for their vote.

    Plus this vote is anti-family since basic and expanded basic packages can include channels that families may not want in their households. I’d say the Republicans should put their money where their mouth is, but the money in their mouths is coming from the religious right.

  • Oh well. Maybe once we elect some people who can govern we will get a better result. Wouldn’t a la carte programming options improve the level of programming? For example, HBO has had a series of smash hit shows and has become the channel to watch. If I’m running OLN or some less successful network I better step up and improve my programming so people add my channel and I make more money. If I keep running hours upon hours of Turkey hunting I’ll go broke. There might be some interesting results in the syndication area as well.

    Too bad. I think I would have liked a la carte cable.

  • More than half the Democrats on the committee voted against it?

    Yep, no one cares about the lower middle class. Barely able to aford cable service and not given a chance to save on it.

    What a bunch of ………

  • Unless the legislation really gets into the details of pricing, I can’t imagine the cable companies making it cheaper to buy 17 individual channels than the basic package anyway. Is this really something Congress needs to get into, or if it is, shouldn’t it be doing more to increase competition rather than tinkering with packages?

  • KC,

    I’d rather give the money to the cable company, knowing that I’m paying for what I want, rather that know that 90-some cents out of every dollar is funding programming that I don’t watch.

  • Corporations and churches win; consumers lose. So much for the ideology of the marketplace. The “invisible hand” has been cut off.

  • Remember that many of the smaller cable channels are owned by large networks. For example, NBC owns Bravo, AMC, Court TV, Telemundo, etc. and thus has a stake in their success. I think all the major players own multiple small cable channels. If they were suddenly dropped by cable companies, these large guys would stand to lose gazillions. This is the reason why we won’t see channel-by-channel selection any time soon.

  • First off, I don’t think that a la carte cable would lead to a significant increase in the number of people who can afford cable. The cable companies are ultimately the ones who determine their business model… if there was a significant profit to be produced by offering a wider audience their choice of fewer channels for less money, presumably the cable companies would be jumping on board. If the cable companies are forced to do a la carte cable, then there’s a good chance that it would STILL be priced outside the same people’s range. A sizable percentage of the cost of the cable bill is likely due to infrastructure, maintenance, and administrative expenses. Then add in a profit figure, and the economic benefit of a la carte cable is not likely to be worthwhile. The “I’m paying for the 90% of the channels that I don’t watch” argument doesn’t hold that much water, since the cost of adding that 90% of the channels you don’t watch to the 10% of the channels that you do, plus all the expenses mentioned above, probably doesn’t increase the cost very much. Much of the less-watched channels don’t have very big budgets.

    Secondly, trying to make the issue one of “parental control” is really just co-opting a convenient argument to make your case. Parental controls already exist. True, brilliant kids may crack their parents’ password or dumb parents may never bother to set their parental controls in place, but forcing a la carte cable doesn’t solve the issue– kids can still easily go over to their friends’ house whose parents get channels that they may want to watch. Ultimately, the responsibility always falls on the parents.

    Lastly, the main reason I’m not a fan of a la carte cable is simple… I would never watch the Christian broadcasting channels. But I do enjoy watching Discovery Channel or the History Channel, and I don’t know that these channels have a very big audience. If you are trying to force into place a system where all the cable channels have to compete with each other to stay afloat, then some channels that you may actually like to watch may wind up under the chopping block along with channels you don’t like. Look at the network channels– they compete hard for viewers, and some of the programming on these channels these days is just pathetic. Compare the viewership of PBS and Fox, and you’d realize that without all the public funding, PBS probably would lose out to “American Idol”. The majority of Americans may not watch Jerry Falwell, but the majority of Americans also don’t watch some of the informative shows that I do. Oh, and to hit closer to the heart, so to speak, if you had a la carte cable channels fighting it out, then MSNBC, a channel that actually showed the Democratic Convention without having an endless parade of commentators pronouncing their silly little verdicts instead of showing what was going on, would probably have died out in favor of Fox News. Of course, the trends would change, but that wouldn’t guarantee that MSNBC would have come back in some other form.

    Just saying, baby… bathwater… you know…

  • I understand why the networks are fighting a la carte, but I don’t understand why the advertisers aren’t fighting FOR a la carte. Right now they’re paying rates based on sketchy information regarding viewer totals of verious networks.

    In an a la carte world, advertisers would have much more accurate counts of who was watching what network and could negotiate much better rates.

    Why should a network with no viewers pull in advertising revenue just because it is bundled with a few networks that do? It shouldn’t. And advertisers should be lobbying heavy for a la carte…thekeez

  • God-damn it.. another reason for the moralizing jerks and the money lovers to team up in order to sabotage choice and common sense.

    I have never understood why some enterprising cable company did not just start offering a la carte services. I’d imagine that it would make them a popular choice for municipalities as they renew contracts. But then, American companies have not exactly shown great entrepreneurial spirit over the past couple of decades (outside of the high tech sector) and have decided that a strategy of regulation and lobbying is more conducive to their bottom line than competition.

    But where oh where are all the great GOP champions of the free market?

  • How does the cable thing work? Well, as someone who has his nose in the tent (usually equipped with a clothespin) as a writer who occasionally finds threats of employment made good and I end up doing things for companies that are providing material to cable networks, allow me to put forth some information.

    Very, very few of the cable stations you see are independent anymore. History Channel, Discovery Channel, Court TV and MTV for example (that last being why History and Discovery are now so bad, being that they’re run by the scumballs from MTV) are among the many owned by Viacom, which entity also owns Paramount Studios and CBS. Viacom also owns or has a significant interest in at least one or two of the cable operators. Another good example of that is Time-Warner Cable – look up who/what Time-Warner owns.

    Sooooooo…. to make a long story short….

    When Viacom does a deal with Time-Warner to carry some popular stations and series that Viacom owns, Time-Warner also agrees to carry all the other things Viacom owns. And it works the same way back when T-W is making their deal with Viacom, or when they’re doing a deal with General Electric (NBC, Universal Studios, HomeShopping Network, etc., etc.).

    Gee! Monopoly capitalism at work just like Marx said!! Who’d a thunkit?????

    There is one very subversive show now in its last season on HBO: “Deadwood,” which is not so much a western as it is a history of the accumulation of political and economic power by capital in 19th Century America. Watch it – David Milch isn’t talking about 1876-77, he’s talking about 2006. And all the stuff about the greatly-unknown George Hearst, the man who made William Randolph Hearst possible, is all fact.
    If you didn’t see the first two seasons, rent the DVDs.

  • I’m glad a la carte pricing didn’t go through. My fear was that a lot of the niche programming that I enjoy would go away due to not being big money makers.

    With all the news lately about the NSA doing domestic surveillance of all of us, another worry I have about a la carte pricing is that I don’t like the idea of yet another way to profile individuals, according to their choices of programming. That would be an incredibly juicy database that marketers, insurance companies, credit card companies, employers, etc, would be frothing to get their hands on. Maybe a health insurer would rather not sign up new subscribers who watched a lot of medical related programming. Or maybe employers would prefer to hire people whose viewing habits reflected a certain political leaning.

    The less they know about what I do and what I like, the happier I am, thank you.

  • Oh, yeah, and one more thing: you’re still gonna be paying for channels you don’t watch with or without a la carte pricing. Come on, think about it, do you think the cable company is going to give everyone a 70% discount because of all the channels they don’t watch? No way. I’m sure they’d be happy to hide the channels you don’t like from you in the channel lineup if they bother you so much, but think again if you think it’s going to save you money.

  • Katie misses something else with her fear of being “found out” through tracking: the GOP has refined this marketing data really, really well, to the point they can identify strong GOP, weak GOP, leaning GOP, questioning Dems, etc., etc., to target for get-out-the vote. They used it really well in 2004, and just used it really really well this past month in the 50th CD campaign to replace Cunningham, digging up an extra 10,000 voters to put Bilbray over the top.

  • I have cable because I like the History Channel, C-Span, and a couple of others. Sure, I’d like to only pay for those, but I have absolute confidence that the cable companies would find a way to skirt a new regulation. I fear I would wind up paying $70 per channel.

    I get 100 channels I don’t watch, including God knows how many annoying shopping channels (who pay cable companies to air them). But I don’t think I could part with the local Public Access channel. Where else can you find wall-to-wall coverage of eyes-glazing county commision meetings and lost pet alerts?

  • The most expensive channel(s): ESPN. Around $4.50/ subscriber, as I recall, rising annually. I never watch. While I haven’t seen the other channels prices, I’d guess one could save a bunch of money by careful selection. That means the cable/satellite companies can’t mark them up, and feel endangered. Surprise?

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