December 5, 2005 4:00 AM PST

A la carte TV

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Cable TV prices are on the rise, but consumers complain there still isn't enough flexibility in the programming packages offered by cable providers.

That could change if the Federal Communications Commission and TV distributors Cablevision and AT&T have their way. Last week, FCC chairman Kevin Martin told a forum sponsored by the U.S. Senate Commerce Committee, which has been examining indecency on radio and television, that consumers could have more choice in what they view for cheaper prices if operators would sell content a la carte.

According to a new report from the FCC that has yet to be made public, a la carte pricing could actually reduce monthly cable bills for many consumers while also providing more control over what channels they watch at home.

News of the FCC report comes just as many large cable operators across the country announced that they are raising rates again for their service. Starting in January 2006, Comcast will bump up the price of its most popular cable package by 6 percent. Time Warner, the nation's second-largest cable operator, plans to raise its rates an average of 3 percent for its expanded package and 2 percent for its limited basic. And Cablevision will raise rates an average of 2 percent.

What's more, consumers--especially those with children--are becoming increasingly agitated by the amount of violence and sexual content that comes into their homes on channels they'd rather not receive as part of their subscription package.

"At the FCC, we used to receive indecency complaints by the hundreds," said Martin in front of the Senate committee. "Now they come in by the hundreds of thousands. Clearly, consumers--and particularly parents--are concerned and increasingly frustrated."

But content providers and most of the cable industry say that offering programming piecemeal will result in even higher prices and less choice for consumers. They argue that such a pricing structure would infuse enormous technical, marketing and transaction costs into the business. They claim that an a la carte model would require consumers to lease a separate set-top box for each TV.

They also claim that an a la carte pricing model would increase overall subscription rates and reduce diversity of programming, because many of the niche or special-interest channels today are bundled with more popular channels. If these less-popular channels are sold independently, they will become too expensive to offer. And if these channels go away, advertisers have fewer places to show their commercials. The losses in advertising would have to be offset by consumers paying more for their favorite channels.

"We can't comment on any new FCC a la carte report until it's released and we've had a chance to review it," said Kyle McSlarrow, president and CEO of the National Cable & Telecommunications Association (NCTA). "But previous and recent analyses were consistent in their findings that government pay-per-channel regulation would be likely to hurt consumers by increasing prices, decreasing choice and reducing diversity in programming, and it would do so in a way that violates the First Amendment."

The bundle quandary
The way the cable packages are set up today, families who may want basic cable for channels such as Nickelodeon and the Cartoon Network are also forced to subscribe to channels such as MTV or Fox's FX, which often show programs that may be inappropriate for children.

Martin, as well as several consumer groups, say it's time that consumers have more choice in which channels they subscribe to. They believe this will not only help control costs, but it also would allow consumers to subscribe only to content they want to watch.

"People are not satisfied with what cable companies are offering them today," Kenneth DeGraff, a policy advocate at Consumers Union, the publisher of Consumer Reports. "Families are being told they have to subsidize content they find offensive. And the cable companies keep raising rates. They may throw in a few more channels, but no one ever asks consumers which channels they want."

The idea of allowing consumers to pick and choose which channels they want to subscribe to is nothing new. Cablevision, a cable operator in the Northeast, has been advocating the change for years. And just this week, the firm reiterated its support of the a la carte option for customers.

"We do not believe in the long term that selling programming a la carte will be detrimental to either programmers or cable operators," Charles F. Dolan, chairman of Cablevision's board of directors, said in a statement. "On the contrary, our experience indicates a la carte will result in a more affordable service for all with more programming options."

AT&T, formerly SBC Communications, has also thrown its support behind the a la carte option. The company is currently upgrading its broadband network and deploying more fiber optics to be able to offer a paid TV service.

See more CNET content tagged:
Cablevision Systems Corp., cable company, channel, TV company, programming

49 comments

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Cable ripoff
I am tired of paying exhorbitant rates for 100 channels when I may only watch 15 of them. For example, why should I pay for sports channels if I don't watch them ever? I pay $50 a month for watching perhaps 7 stations on a regular basis and now I am getting sick of those with them have future show advertisements pop up during the show you are watching: Sci-Fi, TNT, USA. You cannot even watch without having commercials in the program itself. Remember the early 1970's: Pay TV was to be commercial free. Now we pay for commercials in and out of the programs. What a racket.
Posted by mbabbitt (5 comments )
Reply Link Flag
This is the future
Much like the future of advertising becoming increasingly relative to a user's preference, the future of TV will fall under the same umbrella. Finally, some businesses are starting to realize that it's the 'people' that count most.

Ronald Lewis
Founder and CTA
Riverscape
www.riverscapecorp.com
Posted by ronaldl79 (12 comments )
Reply Link Flag
Prêt-à-Porter channels
Since when is having anything in the U.S. made to order (other than hamburgers) make it cheaper for the consumer. Thats like going to wally world for designer Air Force Ones, not cheap, not going to happen!!! If you want designer channels paid the cost, don't make others miss out on niche channels that will be over run by the bigger channels. treat cable like shirts, when I want cheap I pay for a three-pack, if I want perfect fit I pay for the tailor.
Posted by Luke_Cage (33 comments )
Link Flag
How about pay per program?
Now this may be a radical idea...but how about paying per program. If I want to watch a season of one show, or maybe just one episode, to see how I like it, why do I have to pay for the whole channel?
Posted by tylerswhite (2 comments )
Reply Link Flag
iTunes?
You can, for a few shows on NBC and ABC. You can buy
commercial free shows to watch on your computer or ipod and
hook either or both to your TV.
Posted by jwmoreland (48 comments )
Link Flag
Not a radical idea
I was saying 6-12 months ago, that we were moving towards microcharge PPV, with delivery split between Cable, IPTV & other delivery methods.

How many people on here only watch 10% of the channels they pay for & watch less than 25% of the programs on those channels. I don't even use my VCR anymore - there's nothing on which I care neough about to record.

When IPTV offers microcharge PPV - how many people will continue to pay cable, for expensive costume dramas, that they don't watch - if they can get the shows they DO watch, separately on IPTV ?

In the Neilsen top-50 shows, I regularly 2 - Monday night football & the Simpsons. I also watch top-50 movies & some other top-rated sports events. So maybe I watch 10% of te top-rated shows. I don't care about Survivor, Desparate Housewives, the OC, House and a bunch of other shows that cost a great deal to make - So if I can get what I want (and only what I want on IPTV, cheaper than cable - kiss cable goodbye.
Posted by (409 comments )
Link Flag
Arrgggg
The great hue and cry from the cable providers has mostly to do with the idea that they might have to change a comfortable and lucrative business model, something they are doing anyway with moves into Internet and IP telephony. To suggest that another model would adversely impact consumers is scare tactics. And if some fringe programming disappears when forced to exist on its own merit rather than package "subsidies," so what? Are free market forces now considered an evil tool of capitalism?
Posted by parich1776 (13 comments )
Reply Link Flag
Cable TV
This sounds more like the opening guns of a move to charge more and more for cable. The parents that have problems either haven't taken the time to learn how to block the channels they don't like, of don't know where the "off" switch is. The cable companies will bow to their demands and offer individual channels at twice what the bundled channels are now costing, but it will be good because Mom and Dad will not take the time to be parents. As usual it is too easy to blame others for their problems, and the problems will not go away!
Posted by barewd (2 comments )
Reply Link Flag
Irate parent
Hey, I don't want to subsidize ANYONE getting some of the channels on the tube. Lots of bad social examples of all kinds, some of which really worries me what monsters TV's programming that I will have to defend my kids from. I'm all for free speech, just don't make me pay for it. Let the channels stand on their own.
Posted by gcoryer (21 comments )
Link Flag
I hope it's a good idea
I really like the idea of ala carte. I don't watch sports. I don't watch home-shopping channels. I don't watch MTV. I don't watch the religious channels. I don't know Spanish, so can't watch that one. I don't even know what many of the channels I get are.

I get around 65 channels in my package, give or take a couple. I watch Fox (Simpsons), ABS (Alias), WB (Smallville), Cartoon Network (Fairly Oddparents, Danny Phantom), Nickelodeon, Comedy Central (Southpark) and Scifi (Stargates).

With the new price increase very recently announced, my cable bill will break $50/month. And I really don't think it's worth that much. Sorry Comcast, but as soon as I quit being lazy I'm going to install that satellite kit I've got laying around. They sound cheaper the way things are now.

Ala Carte has potential to make things fair. Let me pay a fair price for the few channels I actually use. Problem is, will the ala carte pricing per channel actually be fair? We'll find out if it ever happens.

And I don't understand the comment about requiring all TVs to have set tops. I don't need a box for the bare-bones basic service, and I don't need a box for the expanded service. How does my TV know the difference there which service I have or not? Do bare-bones basic subscribers without expanded service require cable boxes to prevent them from accidentally watching Cartoon Network or any other expanded service channel??
Posted by amigabill (93 comments )
Reply Link Flag
Be careful what you wish for...
I suspect that no matter how an individual decides to watch TV in the future, there will be ways for the Cable/IPTV vendors etc to 'rip you off'. Take for instance someone who watches 'only 15' of the channels of the hundreds they pay for...

Wait for the math:
15 channels/$90 of say, 200 channels is a waste since it's $6/channel of valuable content in your mind...

How much do you really think each channel will cost? It's not gonna be pennies, Compare it to call waiting, another scam... $6/month but they will 'bundle it' for $30 with a bunch of crap you barely need. I see the cable industry going this way. they will price the individual channels at a point where it will be slightly more expensive than buying a bundle so that its not mainstream to pick and choose...

15 channels at $7/mo each for $105... making the 90 bundle look like a good deal.

People who have philosophical issues with paying for stuff they don't need will pay more to prove a point, but the mainstream public will stick with what they know.

-C
Posted by cmbrady (8 comments )
Link Flag
Digital
If you want digital cable from Comcrap you must rent a digital set top box for $10 a month per set. Just get Dishnetwork. 60 channels cost $29, 120 channels cost $37 & 180 channels cost $47. Screw cable.
Posted by paulsecic (298 comments )
Link Flag
Yes!
Th cable companies appear finally to be feeling the heat. And yet they are still resistant. They will have to go A La Carte once IPTV becomes a legal option in enough big markets.

Big Cable is clutching desperately to a monopoly that does not serve its customers well at all.

<a class="jive-link-external" href="http://channelchanger.typepad.com/" target="_newWindow">http://channelchanger.typepad.com/</a>
Posted by Hynes (8 comments )
Reply Link Flag
First Amendment issue?
In the article, Kyle McSlarrow, president of the NCTA, is quoted as saying...
&gt;government pay-per-channel regulation would be
&gt;likely to hurt consumers by increasing prices,
&gt;decreasing choice and reducing diversity in
&gt;programming, and it would do so in a way that
&gt;violates the First Amendment.
Huh? What does free speech have to do with this? Forcing the consumer to pay for what they don't want in order to get what they *do* want ("bundling") is classic monopolistic bahavior. Correcting the longstanding abuse its role as a pseudo-utility is certainly outweighted by any tenuous application of First Amendment rights.

When Microsoft used similar tricks with selling Windows to Dell and other OEM's, the Department of Justice came down on them like a ton of bricks. But when the FCC wants to apply the same principle of not having to pay for stuff you don't want, this guy invokes the First Amendment? Please! Give us some credit, Kyle. Maybe it wasn't until you read your own words in the article that you realized how lame that excuse sounded.
Posted by Kanly (2 comments )
Reply Link Flag
Cable ala carte
This is a good idea on paper but putting it into action is yet to be seen. The whole idea of cable tv in the beginning was to do away with commercials, hence it was called pay tv. The only commercial free channels are the HBO, Cinamax, and the like and these cost additionally on the monthly basis. So my question is why does cable service keep going up? For a person who has cable tv and internet service the monthly bill can be $100 or more. Now if I didn't have to watch commercials this might be worth it but to see all the commercials it ain't. That said the ala carte system depending on how it is priced may not be any cheaper. For someone who wants a lot of channels it may cost them more than if they were bundled. What this boils down to is how they would price the individual channels, time will tell. This will probably work better for IPTV than cable since you can send content according to IP address and not send it network wide.
Posted by Rocker452 (22 comments )
Reply Link Flag
Get Tivo, bypass commericials, gives viewers the power
Tivo or PVR is the only way to watch TV now.
Posted by bobby_brady (765 comments )
Link Flag
Artificially inflated number of complaints
One misleading thing in the article is the guy from the FCC saying they now get hundreds of thousands of complaints. In one recent barrage of complaints that got a lot of publicity, it was determined that the "hundreds of thousands of complaints" all came from the same 6 people.
Those 6 people think they're going to put channels like Comedy Central out of business by refusing to pay for them, but a more likely scenario is the channels with lower ratings that these people enjoy, like perhaps the Hallmark Channel, will have a lot of trouble staying in business.
And every set will need to have a cable box now, for those that don't already.
Posted by mikeschr (85 comments )
Reply Link Flag
Why require boxes?
&gt; And every set will need to have a cable box now,
&gt; for those that don't already.

Why? It'll probably take a while for this to happen if some law passes it as a required option. By then we may be into the digital TV age where no analog signals are allowed anymore. We'll all either have TVs with cablecards built into them, or we'll need boxes to convert digital signals to our old analog TVs anyway. Moot point.

But for now, they could always use the analog filter method of blocking unpaid channels to the subscribers' homes. I don't need a box if I were to downgrade from expanded service to basic service. How does my TV know not to display the expanded channels if I would do that?
Posted by amigabill (93 comments )
Link Flag
Big Dish Satellite Already Has a-la-carte TV
Attention owners of small dish and cable: Big Dish Satellite has always had a-la-cart TV at half the cost you are paying LITERALLY. We had a Big Dish and moved to a small dish provider to try it out. After they raised the rates again, we said to heck with it and went back to Big Dish. Hint: you need to shop around but there is an online provider starting with "Sky..." Guess what, we also discovered that the quality of the broadcasts is 10x better, because the small dish companies are re-compressing and degrading the signal. Guess what? Cable and small dish get their programming from... you quessed it... Big Dish! So why not go to the source? Vote with your feet.
Posted by furgle (10 comments )
Reply Link Flag
Bad News For You
C-band satellite is going away. Starz is leaving C-band, so are many others. I know, I work in the commercial uplink business.
Posted by b+ (1 comment )
Link Flag
tv has gone to the rich
with tv's now costing thousands of dollars,and programming costing hundreds,only the rich and famous can afford tv now.
Posted by superdave132 (19 comments )
Reply Link Flag
Re: TV Pricing.
Only on the high-end are prices extremely high.

A 20 inch TV costs about $120. These prices have never been lower.

Basic cable (20 channels) costs about $20/month.
Posted by open-mind (1027 comments )
Link Flag
a la carte cable
Sports channels are the most expensive content for the cable
operators. I never watch any sports.
Adelphia is my cable company.
I hope that when it is taken over by ATT &#38; Comcast that they will
enable subscribers to pay for the channels thet want.
Posted by margzim (4 comments )
Reply Link Flag
I Like A La Carte
For me, basic cable costs $15 for 20 channels. Only 7-8 of those channels give me value.

Likewise, extended cable costs $40 for about 60 channels. Only about 15-20 of those channels give me value.

I would like to subscribe to only the channels I want, yet have the option of PPV for shows on all the other channels.
Posted by open-mind (1027 comments )
Link Flag
180 channels
180 channels of programming. about 80 are music channels. Don't listen to them, don't wnat them, can't delete them. I am sure I pay for them. Foreign language, and home shopping channels, lots of them. I only watch about 20 channels. I pay $104 per month. Have lousy local channels by antenna and cannot get national feeds. Greedy local channels afraid of ad revenues. So I get lousy reception. Oh well.
Posted by tecknowone (3 comments )
Reply Link Flag
What about that one show?
I don't think there is anybody who gets value out of every cable/satellite channel that they have, but I like my bundled service as it is (the price could be lower, but then again, the price could be lower for everything). The reason I say this is that on at least 3/4 of the channels I get, at least once a month, there's something I really would like to watch on a channel that I don't want.

I do think that the argument against pay per show or pay per channel pricing is valid. If that becomes the case, every channel will only run 10 am - 1 am. Do you really not want to ever be able to have anything to watch in the middle of the night (as an insomniac, I sure appreciate it)
Posted by mwa423 (78 comments )
Reply Link Flag
A La Carte DOES cost more...
It is a simple rule of Economics...

Moving to a "Metered-Service" model almost always ends-up costing the consumer more then a "Flat-Rate" model.

This has been proven, both mathematically, and statistically (this really is just Basic-Economics).

Besides, why else do you think that this "marketing idea" is suddenly being promoted so heavily? The answer is simply that "business" DOES expect to make more profit, this way.

Unfortunately, for consumers, this method of generating higher-profits, MUST inevitably mean higher-charges, for less product, ...NOT, better service or more choice.
Posted by Had_to_be_said (384 comments )
Reply Link Flag
That's a point...
I'd imagine that this is why cable companies are doing public service announcements about how to set parental locks on their cable set-top boxes. They don't want to have to change their whole infrastructure, raise prices yet again, and end up with more consumer dissatisfaction (because instead of paying, say, $60/mo for 200 channels, they'll be paying $50/mo. for 35 channels...)

People are just incredibly lazy.
Posted by DraconumPB (229 comments )
Link Flag
ala carte good for consumers
Not so, Mr./Ms. Corporate Apologist (Do you work for Comcast maybe?). While purchasing goods or services ala carte may mean a slightly higher per unit cost it is true, if a TV viewer finds they only watch 14 out of a package of 50 channels, as most viewers do, purchasing only those channels that they watch ala carte will still mean a savings to the customer. Paying a flat rate for dozens of channels you never watch is idiocy.

Imagine if we had to buy food that we didn't want at the grocery store because it all came bundled in predetermined packages. We wouldn't stand for it. Ridiculous. But that is exactly what we do when we purchase cable TV. Most Americans hate their local cable monopoly and for good reason.

The cable monopolies don't like ala carte because they would prefer to sell more goods--even goods that the customer doesn't want--at a slightly lower per unit profit margin, because more goods sold ultimately means more profit. Don't try to use that false line that we should all be happy with the one-size-fits all garbage that the cable companies have been feeding us about their ridiculous programming offerings.

Cable monopolies will have to ultimately adapt or go extinct. Perhaps ATT and others will force the cable monopolies to adapt by offering consumers more choice. Then suddenly the cable companies will magically start offering ala carte programming. The satellite companies have already forced cable companies to offer a better array of programming.

In the end, businesses that give consumers what they want at a fair price will prevail. More choice in TV is coming.
Posted by jwbarney (1 comment )
Link Flag
I would like just smaller bundles
Seems that people go from one extreme to another. It would just be nice to choose from smaller modules that you can add together. We do that already with HBO, etc. And I hope we can get rid of those awful popup ads that are springing up in the programs. How greedy can you get? I guess, plenty.
Posted by mbabbitt (5 comments )
Reply Link Flag
rates of cable operaters
Intially before increasing the price for all the pakages,every viewer should have the right for knowing the details,and then he shouldhave the choice to select what he prefer to view
The second issue is that whether this particular product is going to reach small town in the country like india
Posted by swati_paranjape2003 (1 comment )
Reply Link Flag
A great sounding idea...
.... but it's a bit short in the practicality department. Not sure
about cable (too many different systems) but DirecTV should be
able to program your receiver with the shows you want. After all,
you can do that already from your end of the system.

But then, comes the pricing question. Each channel would have
to have a price, if you wanted individual channel selection. You
just add up the costs for what you watch, add in the overhead
costs, and there's your bill. Or you buy bundles of channels at a
discount, like you do now.

As in every other business, a la carte choices are more expensive
than the bundled costs. You pay more, but you get exactly what
you want. And it will work for cable and satellite TV.

But, since I can select the channels I want now, and still get the
economy of bundling, I just can't get interested in the a la carte
concept. Someone is going to have to create a very credible cost
analysis proving the a la carte approach is noticeably cheaper
before it can become a real idea.
Posted by Earl Benser (4310 comments )
Reply Link Flag
It's still our choice.
Remember, no one is being compelled to subscribe to cable or satellite. We are electing to pay for services provided by a relatively unregulated industry (content, pricing, etc.).

The current model evolved the way it did in a more-or-less open and competitive system. (I know about must carry and local franchises, different topic.)

As usual, what we need is less regulation. Let providers fight for customers with the best model. If the current bundle system is so bad for consumers, don't look to the FCC for a solution. It will be iTunes, NetFlix or maybe Verizon that draws the customers and puts cable under.

Consider this, would you pay less for Internet access if you choose only this sites you visited?
Posted by boatseller (5 comments )
Reply Link Flag
What about selling bundles and a la carte?
I think the industry has misunderstood what consumers are asking for. No one is saying that bundles should go away entirely. I think what supporters of a la carte pricing want is the option to buy certain channels instead of an entire package. Some people may only watch 10 channels of programming. If they can get what they want to watch for less than what they pay to subscribe to a standard cable package with 100 additional channels they don't want, they'd probably do it. If the a la carte option costs the same or more as the cable package, they'd likely stick with the package. At the end of the day, this debate is really about cable operators and content providers giving viewers more choice. I don't understand how giving customers more options choices hurts their business models.
Posted by MaggieReardon (140 comments )
Reply Link Flag
It's an idea....
The cable and satellite people don't want to overly complicate
their business models - raises operating costs - but if there
really is a serious demand among the viewing audience for some
sort of a la carte selections, it will show up. So far, there seems
to be little serious interest.

As your article says, AT&#38;T (ex-SBC) and Verizon (ex-managers),
among others, are considering the idea. I'd suggest that you sit
back and see what the market creates. That's the only way it's
going to happen.
Posted by Earl Benser (4310 comments )
Link Flag
Remember the "long-tail"
These cable tv execs clearly have not heard about the "long tail", or they refuse to accept it because their business models will not work in the one-to-one media/distribution model of the future. With more video content showing up on iTunes and the coming of IPTV, the days of this type of content distribution are numbered.
Posted by Bong Dizon (17 comments )
Reply Link Flag
go TV!
<a class="jive-link-external" href="http://www.analogstereo.com/bmw_3_owners_manual.htm" target="_newWindow">http://www.analogstereo.com/bmw_3_owners_manual.htm</a>
Posted by 208774626618253979477959487856 (176 comments )
Reply Link Flag
This guy is a real Dweeb....
... can't say anything intelligent and keeps posting irrelevant links. I
wonder if his older brother knows that Andy is messing with the
computer again????
Posted by Earl Benser (4310 comments )
Link Flag
Follow the moola
The big majority of channels go mostly unwatched... the big
channels underwrite the smaller ones  and pay their way - and
it allows cable to offer "bundles" to the ad buyers as well: We'll
sell you this, and we'll throw-in this and that channel for "free."

It drives up costs to the viewer (cable bill) and to the sponsers
who then raises the price of the product. We (as consumers) get
hit twice. (and no one sees the ads)

In fact, all this probably supports many of the professional
sports teams. How else can they pay these people, since many of
the seats are empty at the pro games.

A LA CARTE TV will never happen. It robs too many people of the
moola at the trough.
Posted by TVToy (3 comments )
Reply Link Flag
I used to work in the cable industry and ala carte cable is conceivable to where costs can be contained. I recall the time soon after when ESPN was awarded the NFL broadcast rights for $$$ and the cost was passed on the consumer within a short period of time. We had approximately 50,000 subscribers in the local franchise and what was once Monday Night Football on on-air ABC became the driver of an increase to monthly cable rates for the entire year. Isn't the football season about 6-months long? I know it ends in late Jnauary to early February, August to February is only 7-months and we now pay for 12.
Posted by mw503mw (1 comment )
Reply Link Flag
 

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