Perspective: The false choice of a-la-carte TV

Anyone who's taken even a brief glance at their video provider's channel offerings knows that the number of networks currently available is staggering.

We've come a long way from the days when a measly three networks were all you could get. These days, it seems like there's a channel for every possible niche and interest--sometimes two or three. Yet in the midst of this outpouring of content, a small but vocal faction is still complaining about a lack of choice.

At a recent communications forum in Aspen, Colo., Kevin Martin, chairman of the Federal Communications Commission, once again announced his support for imposing federal authority over how your video programming company packages its lineup. Martin would force providers to offer channels on an "a la carte" or per-channel basis, replacing the current system in which subscribers buy bundled packages. He claims that such a rule would aid parents in fighting objectionable content, and that it would allow consumers to pay only for the channels they want, ostensibly saving them money.

Sounds nice, right? Too bad enacting such a law would be counterproductive on all fronts. Never mind that it's simply absurd for the government to be puttering around in America's television sets, as if there's some enumerated right to a certain type of TV. Martin's line that it's a tool to fight indecency is just a pander to interest-group outrage. And far from being easy on consumer pocketbooks, a-la-carte would force consumers to pay more for less--all while barricading opportunities for the development of new channels.

Martin likes to pitch a-la-carte as a way for parents to fend off indecency. But where's the clamor for government help with controlling the clicker? Nowhere to be found. A survey of U.S. TV viewers by Russell Research revealed that only 9 percent believe the government should increase control of television programming.

For those who want to choose what they watch and when they watch it, there are numerous options already available.

What did the other 91 percent think about the optimal way to direct children's TV viewing? Quite sensibly, they answered "parental involvement." Turns out people overwhelmingly think parents--not government--should be in charge of what their kids watch.

The FCC might point to the piles of indecency complaints it receives, but they're almost exclusively the work of a small, highly overrepresented squad of committed complainers, the Parents Television Council. Out of the whopping 240,000 complaints the FCC received in 2003, 99.8 percent were generated by the PTC's online complaint form. In July of 2005, the FCC received more than 23,000 complaints. Only five came from other sources. Take the PTC's computer-generated protests out of the equation, and you're left with virtual silence.

On the issue of pricing, Martin's claims that a-la-carte mandates would make less expensive programming sound good, but fall apart under closer inspection. Much of the cost is in the infrastructure, meaning that you can't simply take the number of channels on your bill and divide by the total cost to see how much the per-channel rate would be. Any a-la-carte service would likely have to include a flat rate for connection in addition to the per-channel rate.

And updating the infrastructure and pricing would add costs too, meaning that even those customers who stuck with traditional bundles would likely see their prices rise. A study by research firm Booz Allen Hamilton figured that an a-la-carte requirement could raise even the cost of current bundles by as much as 15 percent. Cheaper? Not by a long shot.

As for channel variety, a-la-carte could decimate the mechanisms that allow the hundreds of niche-interest networks to flourish on the ever-expanding channel rolls. Specialty networks are often sold to providers as part of channel groups and then packaged into basic programming bundles. They pick up support based on their ability to find their way into packages, and thus into consumers' homes.

It's a crucial part of the development process that allows smaller channels--especially those devoted to religious and minority programming--to flourish. Today's spectacular array of channels is a direct result of this process, and a-la-carte could kill the prospects for any number of new networks.

And for those who want to choose what they watch and when they watch it, there are numerous options already available. DVD box sets of TV shows have proved surprisingly popular. On the Internet, iTunes users can download shows to their computers and iPods, and many networks now post popular shows like "Lost" and "Heroes" online right after they air. Consumers do indeed want more options--and in the form of more channels and more ways to watch, that's just what the market has delivered.

It hardly needs to be said, but if choice is what you want, don't look to the government.

Biography
Peter Suderman is a writer at FreedomWorks, a limited government advocacy group based in Washington, D.C.

More Perspectives

[george108]

False Choice of a la carte TV

I think your Peter Suderman needs to come down to earth. I'm not one of those who belongs to any perticular group. Just your average person. I'm sick of paying for all those so called channels when i watch only a select few. I receive 3 spanish channels (don't watch). Approx. 10 channels of QVC or something (don't watch) ESPN of which there are approx.8 (don't watch) and yet i'm stuck paying for these. I still want the choice of choosing and not paying no matter how you look at it.

[inachu]

When you get what you asked for.

Growing up I have noticed everything I have asked for will stay mine but as an adult I see what we ask for is never the same or does not last long at all. Good example I ask for minum cable tv service just as long as I get the SCI-FI channel.

I may get the choice but some new selling or offering changes that deal I made with the cable company then I always loose the aci fi channel then they reply back," Sorry that is only for Premium subscribers." either that or the cable company always get sbought out and they rip away all the custom choices I made and they force a new worthless plan that costs more and less choice. PAY MORE = GET LESS
I am really starting to hate all cable tv companies.

[hinroc]

Paradigm shift

This writer is stuck in the old way. Everything he states about a la cart is correct except one thing. Channels will die a slow death. It will become a la carte shows. You will pay for the Cable service just like you pay for broadband. Cable will become one big VOD set of channels. Action, Comedy, etc. Just like itunes some people will pay for individual shows others will pay for whole seasons. Sure there will be commercials to get you to see the free preview but it will all be a la carte.

[bjglav492]

so true

if you willingly pay $50 today for cable there is no way the bean counters at the cable company are going to sit back and let you slash that when they already know you can swallow $50 to get the channels you want. At a minimmum, they will transfer the lost revenue of high cost of stations like ESPN to those who choose to receive it. This would be fairer. In the end, its silly to think that the cable companies will just sit back and accept the tremendous revenue loss that a the a la carte system being sold would mean.

[SohailAhmed]

Why is a lobbyist writing on CNET News.com!?

A bit of the fox guarding the hen house. CNET is going to lose
credibility if they continue to put articles like this out without
someone from the opposing side. Instead, they should create a
feature containing two articles - one from each perspective.

I personally think a la carte would be great for consumers and it
is not a nightmare to implement. Cable companies already do
this with options like HBO. This is simply big business lobbying
to keep more dollars for themselves and making consumers pay
for what they don't want or need.

A la carte pricing is the wave of the future in a digital economy.
I'm all for less government, but key areas need good policy. This
is an easy one to both pass and implement.

Democracy in America is eroding people. It's more and more an
illusion as multinational lobbies control government lawmakers.
It's more about money than votes. Wake up people.

[Fraud Guy]

What happened to the free market

I have wanted a la carte for years; the only time I see most stations is when I edit the channel off of my TV. As a previous commenter said, that includes foreign language stations (except to catch a soccer game), home shopping, etc.

And if that family network thinks that pushing for this change will result in less "adult" programming, they may be in for a surprise--IIRC, by far the most popular movies (again, free choice) rented by businessmen and travellers are the X-rated ones. You don't see much pay per view religious programming these days.

[don356]

Freedom of Choice

Minimum packages on Satellite, contain 60 or so channels - of which, I will only watch 12 or 15. The rest of the channels I may want to watch are contained in the next package and or the package after that. That may consist of perhaps 6 more channels than the original. But I'd end up paying for 120 or more channels, when I only want to watch 18/21 channels. WHY should I have to pay for 102/99 channels I WONT watch.
GIVE ME ALA CARTE, PLEASE...I want my Freedom of Choice.
Don

[fgoldstein]

Good points

I'm happy to see this article here, even if I wonder if I should feel uncomfortable being on the same side as the author, whose opinions probably differ from mine in lots of other places.

A la carte is a fraud; mandating it is merely a way that the telephone companies, especially fauxATT, are trying to attack the cable companies via their sock puppet Kevin "K-Mart"[in]. The economics of cable channels make this clear. If a la carte were the rule, you'd be getting maybe 30 channels for the price of today's 200+.

The reason is that, like software, it costs a cable program producer exactly zero dollars per household that gets it. They aren't printing DVDs and mailing them to each house, after all. But the cost of producing a channel's program is basically fixed too. So if a special-interest channel (food, golf, Russian-language programming, animals, anime, old movies, history, science, whatever...) costs say $20M/year to run, it either makes that revenue bogie or shuts down.

With bundles, the programmer offers the show to cable companies for a very low carriage fee -- a few cents/month per home passed, for instance -- and hopes to sell to millions of homes. This creates a package for advertisers, who pay most of the bills. Channels win by getting into lots of homes, a few of whom will stumble across it while channel-surfing and start watching, maybe becoming regulars. So over time it may catch on, or it may fail. This gives viewers lots of channels, most of which they have never heard of before.

A la carte means that the channel won't be on any sets that don't order it. So a new channel, a new idea, can only get started if it has huge money up front to publicize it and collect orders. That's next to impossible today, except for the very few mega-media-corporations who might be able to pull it off on occasion.

Worse, with fewer viewers ordering existing channels, their subscriberships will dry up. Since their cost bogies remain the same, their cost/subscriber/month will go way, way up. And thus the rate will go way up. So subscribers will pay, say, $2/month for a channel that's now one of 20 in a $5/month package. They may of course come out paying less, because maybe 19 of those 20 will simply shut down. This benefits GE, Disney, CBS and News Corp., whose Big Four commercial networks have been losing badly to cable. And it benefits ATT whose on-demand video system is more adapted to massive pay-per-view and less aimed at package delivery than cable. Hmmm, I wonder if they've been shopping at K-Mart lately.

[Tom_T]

a la carte tv -- Been there, done that & liked it

Back in '84 we purchased a big dish (you know, one of those 10-foot dishes that are now mostly obsolete) for watching satellite tv. We happily used it until the late '90's when most of the satellite tv programming switched over from the "C" Band to the small dish technology.

Bundled programming was an option, or, we could create our own bundle consisting of just one or more channels, for just one or more months.

Our 'customer satisfaction' with our a la carte tv programming was 10/10. Having the flexibility to add or drop whatever and whenever we wanted gave us the feeling of empowerment. Of course, we couldn't control the programming, but, if for example, HBO had a crappy lineup for a month while Showtime during the same period had movies we wanted to see, it was simply a matter of dropping HBO and adding Showtime.

Paying for only what you actually are interested in watching is a good thing.

[jsheaney]

vote with your wallet

If you don't like the way your cable company bundles the channels
then stop paying for it. I really dislike commercial TV, so I no
longer have cable. I buy the few TV episodes I like from iTunes.
That is truly a la carte. I save a ton of money, have no comercial
interruptions and I have whole lot more free time that I used to
spend as a couch potato flipping through a hundred channels.

[bobcode]

on deman IP TV

Where's my IPTV, or 720p on the iTunes Music Store.

Simply, if I don't think the offer is good, I don't buy. I didn't buy TV for a while because the advertized offering of DTV cost too much. Later, they offered a discount and basic analog for a good price.

[lyntone]

tv program choice

What we need is a choice of the amount of commercials and type of commercials.
There are too many drug commercials, erectile dysfunction commercials should stop.

[bennetts77833]

We have a False Choice already

The fact that porn, soft or hard exists on satellites developed in part by my tax dollars and put in orbit by Western culture makes me sick.

And I am insulted that I have to have to put an adult lock on my channel choices to avoid seeing the titles and be solicited to pay for porn every day.

Short of censoring the satellites, real choice would be to make packages that did not include that stuff by default and did not assume everyone wants sports and all children's programming too.

With digital and hd tv over the air signals bringing more choices over the air to me, I just may opt out of all the satellite and cable providers. But it would be nice if all those providers had a way to package quality tv in options that would allow real choice without me having to get my hands / tv programming guide / dirty.

Best Wishes,
Bernie

[raulmot]

Paying More for Less? I think not.

I primarily watch about 5 channels of cable TV (not including network stations). Sure right now I get some 300 channels for $60, but I really don't need 3 channels of CSPAN. I could do without all the home shopping channels. I don't need the music channels. If I can choose a la carte, sure I'd pay more per channel, but I wouldn't be paying for about 95% of the channels that I don't even watch. I can't imagine my bill being anything but less than what it is now.

[Professor Cornbread]

We are Tired of Paying for Crap

I have standard cable with 70-odd channels. I watch maybe 6 on a regular basis and a dozen or so sometimes, and probably another dozen rarely. That only adds up to about half of what I get, yet I am paying for half crap. I would LOVE to half my cable bill to not recieve the religious, shopping, family, and sport channels...but I have to pay for it all.

The only reason that this a la carte method 'costs more' is becuase cable TV providers are perfectly happy selling us a bunch of channels we will never watch and want to continue doing so, blaming 'logistical' problems. You can switch my HBO on and off easily, don't try to tell me you can't do the same with my ABC Family or Telemundo.

[giggitygoo]

The oligopoly of television

Frankly, this article is way off the mark. Mandated a-la-carte TV is no more government interference than allowing cable companies to have monopolies. Yes, there is satellite, but even with that most people only have 3 options - Cable, Dish Network, and DirecTV - that's it. Verizon's service is only available in an extremely small area for now, so I'll leave them out. There is simply not enough competition here to let the free market provide the best solution, especially for those who are not able to choose satellite. (People in apartment buildings, no clear LOS, etc.)

I usually side against government regulation, but in this case I am all for it. Cable companies (and satellites to a more limited extent) have been soaking customers for many years, well aware that most people are not content with just free network channels. Companies in a highly competitive industry simply could not get away with the almost nonexistent level of customer service and outrageous fee increases year after year that cable companies have been getting away with for far too long.

A-la-carte options would allow people to pay for only the channels they want. Arguments about niche programming are nonsense. If I'm not interested in a Russian-language channel, why should I be forced to pay for it and make it more affordable for people that actually have interest in it? Let people decide if a channel is worth a certain price - if there's not enough people willing to pay for a channel, then let it die. This will put pressure on both content and network providers to offer high-quality, reasonably priced channels and eliminate unworthy, little-watched channels that are forced into packages by large media companies.

Customization is the way of the future - get used to it. The popularity of individual track purchases on iTunes and the decline of CD sales show that people want more choice and are not interested in large media companies forcing unwanted services/products down our throats just to get what we want. This is in the cable companies' long term interest as well. As internet speeds increase, and as televisions and AV equipment become more integrated into home networks, a-la-carte TV over the net is only a matter of time anyway.

[SBR249]

Not quite

When taken to the extremes, any proposal can be made to sound absurd. The author assumes that consumers will go 100% a la carte or 100% bundled service. What about the consumer who are in between? What if you don't watch much beyond the basic $10 bundle of channels except for one "premium" channel like Scifi or History Channel?

In that case, you are already paying for the infrastructure and connection costs because you already have the basic local channel bundle. Why should a consumer who wants to watch a few hours of Stargate a week have to pay $40+ for a package of channels that he/she will watch maybe 1-2 times a month (if at all)?

I think, instead of going strictly a la carte or strictly bundled, there should be a tiered system. For example, if we take Comcast as the guinea pig. They can require the subscription of the $10 basic bundle for all cable subscribers which would take care of infrastructure maintenance and upgrades. Then, customers would get a choice of either upgrading to a bigger package or choosing channels a la carte.

Besides that, there are other schemes will could potentially work. For instance, a modified a la carte/bundle hybrid that functions on a tiered system. Where you can choose bundles of 5, 10, 20 channels whose lineup you select from a pool.

Even that would be preferably to a giant grab bag of a hundred channels that you pay hand over fist for and end up not even watching.

That's just my $0.02

[gwhitham]

Freedom of choice

In this world of monopolies, I do not have the freedom to reject objectional television programming. It disgusts me that I cannot prevent objectional content from appearing in my home without my consent. It's the case that in order for me to want only 1 or 2 channels, I must take the whole package and be subjected to programming that includes deviant late night sexual content that not only shocks me to see it in my home but at the same time insults my intelligence. When all I might want for channels are educational channels that do not have smut, channels that only have older tv shows from the 50's, 60's and 70's such as Bewitched etc, I am forced to also have the **** channels that really offer nothing. Do the providers think that I sit and watch cooking shows as though I am cooking along with the show? Give me a break. I fear that the same people that idolize Paris Hilton are the same people that make and air deviant sexual content. Why am I not suprised?

[gwhitham]

The cable company

I remember the cable guy coming to my house one day. "We're in your neighborhood and if you connect today, we will waiver the connection charge". I replied, "can I select the channels I want?". "No" he replied. To which I replied "Come back when I can subscribe to ONLY WHAT I WANT and not what you want to give me." As a result, I chose to not have cable because I was not allowed to choose what I will allow in my house. As far as I am concerned, the cable companies can go **** themselves. They suck. Oh and by the way, I have lived with rabbit ears for a long time now and do not miss cable at all. If you sit and think about it for a minute... you probably don't need cable either but it's all a matter of choice. My choice.

[nicmart]

Left and Right vs Freedom

The federal government has no more business interfering the
cable offerings than it does with cosmetic offerings. As Ron Paul
reminds us in his presidential campaign, the powers of the
federal government are limited by the constitution, and nowhere
does the constitution empower that government to regulate
cable programming.

The Left and Right both salivate over media control: the former
for economic reasons, the latter for moral reasons. But my
arrangement with my cable provider is between the company
and myself, and neither the ideologues nor the regulators have a
right to interfere. Butt out!