Cable to Offer Family Packages

Under pressure from federal lawmakers, Time Warner Inc., Comcast Corp. and four other cable operators are planning to soon offer subscribers a lineup of family-friendly channels as an alternative to ones featuring racy shows.

The conciliatory action to offer a family “tier” of channels is aimed at trying to take some of the steam out of a movement to regulate indecency on cable by providing subscribers an easier way to keep objectionable shows out of their homes.

Kyle McSlarrow, president of the National Cable & Telecommunications Assn., made the disclosure Monday before the Senate Commerce Committee, whose chairman, Sen. Ted Stevens (R-Alaska), has been pressuring cable operators to clean up their act.

McSlarrow told the committee that one or two cable companies could be offering family-friendly packages as early as the first quarter of next year.

In addition to Stevens, Federal Communications Commission Chairman Kevin J. Martin also is pressuring cable operators on indecency.

On Monday, Martin praised the industry’s move as being responsive to consumer demand. But Stevens said that offering family packages wouldn’t necessarily avert a push for federal anti-indecency legislation. He did suggest, however, that the industry could head off any action if the move was coupled with an improved ratings system.

But offering a family tier puts the cable industry at odds with big media companies, which are concerned that channel ratings would erode if enough cable subscribers shifted to family packages.

If just 5% of consumers took advantage of a family tier and eschewed racier channels, it could cost programmers tens of millions of dollars annually in lost revenue, said Laura Behrens, a research analyst for Gartner Industry Advisory Services in Cedar Rapids, Iowa. That’s because programmers are paid according to how many cable subscribers take their shows.

Programmers also are concerned about who will decide whether a channel is family-friendly. A Fox Cable Networks spokesman declined to comment. Spokesmen for Viacom Inc. and Walt Disney Co., two other big cable program suppliers, did not return calls seeking comment.

In addition to Time Warner and Comcast, the nation’s two largest operators, other cable companies planning to offer a family tier include Insight Communications, Advance/Newhouse Communications Inc., Bresnan Communications and Midcontinent Media Inc.

Cable operators now offer a basic package of 50 to 100 channels, including ones such as MTV and FX that are frequently criticized by industry watchdogs for offering shows featuring excessive sex and violence.

Under McSlarrow’s scenario, the six cable operators would allow subscribers to swap their channel lineup for one that would eliminate edgier channels and instead feature over-the-air stations combined with such family offerings as Disney’s ABC Family, the Disney Channel and Viacom’s Nickelodeon.

Still, the family-tier concession offered by McSlarrow seemed unlikely to completely appease cable’s critics.

The Rev. Jerry Falwell, president of the Moral Majority Coalition, reacted favorably, saying “a new family tier of programming responds to a deep and abiding concern among parents about a coarsening of the culture and growing indecent programming directed at children.”

But L. Brent Bozell, president of the Los Angeles-based Parents Television Council, which monitors indecency, predicted that offering family packages would do little to give consumers more control over programs entering their homes.

Bozell’s group wants to force cable operators to offer channels a la carte, which would allow customers to pick the lineup they want.

“There really is only one option and that is to offer people cable choice and stop making people pay for programming they don’t want,” Bozell said.

McSlarrow said at the hearing that the programming decision would be made by local cable operators, and that family-friendly fare would probably vary from market to market.

“I think it’s still to be determined at this point what exactly the offerings would look like, what networks would be on it, the pricing,” McSlarrow said.

He added that the tens of millions of traditional analog cable TV subscribers would have to upgrade to a digital cable box in order to take advantage of any family-tier offering. Although McSlarrow said he had not discussed family tier pricing with cable operators, the upgrade to digital service could add $7 to $8 to a subscriber’s monthly cable bill, industry experts estimate.

Time Warner and Comcast, which together serve about 35 million customers, have the leverage to force programmers to package programs in a family-friendly tier, but smaller cable operators don’t have that clout and are unlikely to follow the industry leaders, said Matthew M. Polka, president of the American Cable Assn. in Pittsburgh.