Well, FCC wants to try and experiment with cable a la carte..the cable industry doesn’t. And it paid Booz Allen Hamilton a bunch of money to deliver a report which shows that a la carte would hurt cable networks. (Links to BAH PDF report and presentation here).
“How rigorously have you tested the assumption that ad rates would go down?” asked FCC Media Bureau Chief Kenneth Ferree, at a symposium on Thursday. “It seems like a somewhat irrational result.”
this is what BAH gave them:
– Consumers would be worse off under each of the scenarios evaluated
– Would pay higher prices for cable even if keeping current tiers
– Would need to receive fewer channels than they regularly watch in order to reduce their monthly bill below current levels
– Would enjoy less programming diversity
– Emerging program networks would fail or would be sold to larger groups
– Emerging program networks would likely not be able to raise license fees enough to offset lost advertising and higher marketing expenses
50-75% of emerging networks would fail or be sold, and new network launches would become extremely rare
– Established networks would need to substantially reduce investments in original programming to remain viable
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