A la carte’s back, and hard to swallow
TV industry balks at FCC cable pricing plan
February 9, 2006
The idea of a la carte keeps coming back as an unwelcome apparition for the television industry, but on the face of things, as public policy, the idea makes great sense.
Under a la carte, as being advanced by Federal Communications Commission chairman Kevin Martin, consumers, the viewing public, would be able to choose and pay for only those cable channels they wanted.
Whether it would actually make sense is a different matter.
There’s also some lingering questions about the true motives of supporters like Martin. Is this really about saving consumers money, or is it about finding a more effective way to pressure both broadcasters and the cable networks to rid their shows of sex and violence?
Martin is a strong proponent of cleaning up the airwaves, and the subject of a la carte most often arises during debates about sex and violence on TV.
Yesterday, the FCC issued a report on a la carte finding that consumers would actually save money, some 13 percent on their monthly cable bills when subscribing to 11 channels. The average cable household typically watches just 17 channels out of the many hundreds available.
Shortly after, Sen. John McCain, an on-and-off supporter of a la carte, came out in favor of the proposal. In turn, TV executives issued statement attacking it as a truly bad idea.
Geraldine Laybourne, chairman and CEO of Oxygen Media, issued this statement:
“Arguments over economic assumptions still don’t address one of the biggest problems I have with a la carte. And that is, TV viewers often don’t know what they want to watch until it’s there for them as an option.”
“Who would have known to subscribe to Bravo to watch ‘Queer Eye for the Straight Guy’ prior to it airing? Hits come from new channels all the time. Would consumers really want to switch networks every few weeks so they can watch the newest shows on cable?”
Paul FitzPatrick, executive vice president and COO of Hallmark Channel, had this to say:
The FCC’s self-described Further Report on a la carte does little to further the well being of consumer choice and of those hundreds of networks that bring that choice, diversity and value into America’s television homes.
“Moreover, it appears that this vital discussion is morphing into a new television series, ˜The Battle of Economists,’ a point-counterpoint production built around the abstract rather than the beliefs and real life experiences of programmers, distributors and advertisers.”
The Battle of the Economists FitzPatrick refers to is the ongoing debate over a la carte’s presumed economic impact.
The new FCC study contradicts other studies, including an earlier FCC study, finding that a la carte would do nothing to lower cable bills while reducing the number of channels available to consumers.
A study last month from Kagan Research concluded that cable subscribers now pay an average $45.40 per month for about 64 networks. Under a la carte, they’d pay about the same but for a far smaller number of channels, somewhere between six and nine, which is the number of channels Kagan thinks subscribers would choose. Their per-channel costs would rise from an average of 71 cents to between $5 and $10.
Derek Baine, a senior analyst at Kagan, told Media Life at the time:
“We think that all a la carte would do is push up the price per channel because people will migrate toward the big, ESPN-type brands. The big misconception right now is that, when asked if they want a la carte, people say ˜yes,’ but no one is explaining that they are getting a big discount on a channel in a package versus a la carte.”
The Kagan report echoes the conclusion of an FCC study in 2004 finding that cable bills would rise by as much as 30 percent.
Anxious to blunt a la carte, cable systems over recent months have been introducing so-called family-tier plans that would allow subscribers to permit into their homes only squeaky-clean channels. With such tiers in place, the burden of policing TV content, at least in theory, would fall to families.
But family tiers will not end the debate over sex and violence, nor will they reduce the rhetoric. The reality is that while the FCC has the power to enforce decency standards on broadcast TV and radio, it has no purview over cable. It also cannot force the cable companies to impose a la carte.
Only Congress could do that, and that is not likely to happen. As it is, it has yet to impose stiffer fines for decency violations two full years after Janet Jackson boobed America during the Super Bowl.
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