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Summary:

Being able to pick and choose which cable channels you want instead of having them all bundled into one package would bring “economic ruin,” according to recent research from Yankee Group. But as online video grows, the point may already be moot. “A la carte” pricing […]

Being able to pick and choose which cable channels you want instead of having them all bundled into one package would bring “economic ruin,” according to recent research from Yankee Group. But as online video grows, the point may already be moot.

“A la carte” pricing for cable has been a hotly-debated topic since… well, since people first looked at their cable bill and cursed their provider. Yankee says the average cable subscriber pays $60 a month for basic cable, and Nielsen Media Research said that the average cable subscriber pays for 85 channels and only watches 16.

While the siren song of sticking it to the cable company via a la carte is tempting, Yankee predicts switching to such pricing would have disastrous immediate effects including:

  • Fewer channels: the loss of carriage fees for programmers would translate into niche networks losing revenue and subscribers, while forcing surviving networks to charge individuals more to subscribe to their channels.
  • Less ad revenue: with just the channels you want, there are fewer casual viewers aimlessly flipping through the dial. Fewer viewers results in fewer ad dollars. Networks that survived the shakeout could charge more, though.
  • Economic impact: fewer networks and fewer TV ads means fewer jobs which would be felt throughout the economy.

(via Research Recap)

FCC Chairman Kevin Martin has come out in favor of a la carte cable pricing, saying it would assist minorities. But his fellow FCC member Robert McDowell has said that the commission would need to be “very, very careful” on that issue. McDowell points out that with the online video boom, consumers already have more choices than ever for watching content.

Of course, proping up cable companies and their dying business models isn’t a good reason to keep a la carte around. But go ahead, keep fighting; we’ll be over here watching Hulu.

  1. A TV channel is just a playlist of video that you can’t control. Non-live channels will be dead in 5-10 years. RIP appointment TV.

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  2. I doubt we’ll see a la carte from cable or satellite. However, with the rapid growth in internet television perhaps those fat package prices will come down to earth. The main problem is that the cable and satellite companies also own (and control) a lot of the content.

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  3. Yeah, the issue of a la carte carries great emotional resonance on a number of fronts (as I noted a few months ago). This Joe Nocera column from last November did a good job of breaking down the flaws in a mandatory a la carte system. I feel the pain for those paying cable bills, but the issue isn’t how many channels you don’t watch, it’s what’s the most efficient way to ensure you can see the channels you want to watch. You probably don’t watch the same group of channels as your spouse, your kids, your neighbors. The best bet is to deliver a diverse set of choices, so that you can pick what you want.

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  4. [...] A La Carte Cable is a Sucker’s Bet Chris Albrecht at NewTeeVee asks whether a la carte pricing for cable is a sucker’s bet: “A la carte” pricing for cable has been a hotly-debated topic since… well, since people [...]

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  5. [...] over-the-air-transmissions. And we’re on board with the Senator that à la carte cable is a sucker’s bet. But given revelations that Comcast blocked BitTorrent traffic and is now angling to throttle heavy [...]

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  6. So what your saying is, the more poular channels give money to the less popular ones in order to keep them afloat? I doubt that.. so what is the payoff for being a popular channel? There are lots of ways cable compaies can make money, like selling the info on what pepole actually have signed up for to advertisers. Your argument is full of holes. No other industry makes you buy more than what you want. Imagine going to the post office and sending a pakage to California and being told you also have to send one to Rhode Island and Wyoming just because thats how the system works?
    Or going to the grocery store and having to buy papayas with your apples because thats the way it is.

    Think about it.

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  7. As a taxpayer and consumer of cable television I am calling on the FCC to regulate cable television providers and remove the obstacles to ‘A La Carte’ cable television service. Subscribers should be able to choose individual networks that they would like to subscribe to without having to buy costly ‘packages.’ Subscribers should also be able to discontinue channels that are included with basic packages of channels they are not watching, or whose content they deem dangerous, offensive or otherwise dissatisfying.

    This change to the rules of cable television would be good for the industry:

    a) it would inspire more competitive programming, stations with the most informative or enjoyable content would remain on, stations whose content is uninformative would go away.

    b) Cable would become more family friendly, as parents could permanently unsubscribe from cable programming they deem unsuitable for their children, without sacrificing channels that are harmless.

    c) advertisers would have a better gauge of effective programming, the networks could charge more money for ad time on most watched networks, sponsorship becomes more effective, products could be targeted more effectively.

    d) consumers could make political statements through subscription, (for example, viewers who object to the propaganda they see on FOX or CNBC could switch that channel off- providing in effect a check and balance to ineffective or just plain ‘wrong’ media coverage, broadcasters of ‘news’ programming would be forced to adhere to high standards of broadcast journalism)

    e) consumers would have access to a broader range of entertainment, by spending money on only the media they wish to view. A consumer currently may not subscribe to an entire expensive cable package to view the content of a particular cable channel, so that consumer is cut off from it. Cable television would benefit because while the ‘packages’ would go away, subscribers would make up for it in the individual variety of a la carte subscriptions. A sports nut would be turning off food networks, but adding sports channels, a sci-fi nut would be turning off children’s programming, but subscribing to more movie channels, etc…

    The FCC needs to overcome, through regulation, the objections of cable television lobbying groups and large media providers and serve the best interests of the consumer of media. The best and most progressive way to do this is through a La Carte cable television.

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  8. [...] pay TV industry has fought numerous challenges over something called “a la carte,” which would allow consumers the opportunity to buy individual channels of programming outside [...]

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  9. [...] his argument, he used the example of paying for cable, rather than individual channels (even though folks are still agitating for à la carte pricing) and he discounts Apple’s impact on album sales as consumers buy only singles through iTunes. [...]

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