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The Therapy Sessions
Saturday, December 10, 2005
 

A big NO to a-la-carte channels on cable or satellite


There is an idea currently going around Congress that cable and satellite television offerings would be vastly better - cheaper and less offensive - if customers were given the right to buy only the channels they wish to watch.

Of course, I could be a curmudgeon and point out that Congress shouldn't have the right to interfere in the pricing of someone else's product.

But...I'll limit this to my own self interest.

Reflexively, my first response to enforced a-la-carte cable channels is HELL YEAH.

I wouldn't have to pay for the ghastly MTV, the useless ESPN, or the sleep inducing boredom of C-Span. I'd pay for the History Channel, the Food Network, Comedy Central...Hell, I might even throw in WPN for the wife.

And my bill would be cut down to size.

Or would it?

I actually don't think that it would go down very much. I have Direct TV, and I get about 300 channels. I only watch a dozen or so of these.

The smaller channels I watch pay their bills largely from advertising. The reason that people pay to advertise on the smaller networks is because of viewers like me. I might not be regular viewer, but I am a potential viewer.

The potential viewership of the Travel Channel is around ten million viewers. Only a small fraction of those people are acually watching the Travel Channel, but they could watch - and that is what attracts the ad dollars, particularly to a network's high draw shows. People could channel surf in and watch for a few minutes before departing. They might see your ad. And that sells ads. Late at night, the smaller networks can air only infomercials for advertisers eager to get a small slice of several million potential viwers.

If the Travel Channel was subscription only, those potential viewers go down dramatically. Are you going to spend $25,000 to put an ad on a channel that only has a potential viewership of 20,000 people, and a real viewership of a few hundred people?

No, that won't work. Smaller channels will try to pass on their costs to the cable viewer. How much would you pay to have the Travel Channel? Right now, I get it for about a nickle. In order to help it pay its costs, it will be likely to cost me several dollars a month.

I wouldn't pay that much for it, and I doubt many others would either.

This scenario played out large would dramitically thin the herd of cable channels Americans have grown used to. The smaller channels would die, and with them would perish the vitality of the cable television universe.

Part of the fun of cable is there is practically a channel for everything, and new ones are constantly coming out. Where there was once only a Food Network, now there is a DIY Network, HGTV, the Leisure Channel, and the Travel Channel.

A la carte would kill off these these fledgling networks, and it would effectively prevent new ones from coming out. How would you like to pony up $5 for the brand new Woodworking Channel? Odds are you wouldn't bother.

Had a la carte pricing existed in the mid-80's, you would only have a dozen networks to choose from: CNN, Turner Broadcasting, MTV...By today's standards, cable in 1985 blew chunks.

The History Channel, Comedy Central, Food Network...these all came later as add ons. They were all laughed at in their turn - (Who would watch people cooking all day?) - but each has been quite successful. History Channel has spawned several related networks: Wings, History International, the Military Channel...

None of that would have happened with a la carte.

We all know that cable is more expensive than it was in 1985. But we forget that now get several hundred channels and not just ten.

Go to a la carte, you will have your ten again. And chances are they aren't going to be the ten you want: they will only be the ten you can stand of the twenty five that are available. And they will be almost as expensive as the deal you currently get now. The popular channels will be cheap - maybe a dollar or so a month - but the smaller channels will be dear - $5 dollars a month. The even smaller niche channels will be too expensive to make them worth your while.

In the end, you don't have a right to your favorite dozen channels, because there will no one there to sell them to you.

20 a-la-carte channels for $30 a month with little diversity (You'll get your choice of the biggies: CNN, CNN Headline News, FOX NEWS, Turner Network, MTV, Comedy Central, ESPN, BRAVO, Food Network, History Channel, Oxygen, Lifetime, VH1 and Turner Classic Movies).

OR

300 diverse channels - with more coming - for $40 a month?

Face it, cable is giving you a pretty good deal.


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