Don’t hold your breath for a la carte cable
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Is the cable industry starting to change its mind about the idea of letting consumers decide what channels they want? A recent story from Reuters says cable operators are working on a such a plan and that it ‘represents a complete reversal from cable operators’ long-held opposition to what is known as ‘a la carte’ programming.’
Don’t get your hopes up. While there are a handful of small cable operators, including Mediacom, that have expressed interest in pursuing a different distribution system, the big boys -- including Time Warner Cable and Comcast Corp. -- are unlikely to advocate for an a la carte system.
That’s because both are in the programming business and want their channels in the homes of all their subscribers, not just the ones who want them. When Time Warner Cable launches its regional sports channel in Los Angeles next year, consumers will have to pay for both the English and Spanish language versions even if they only want one or -- gasp -- neither. It is a practice called bundling and all the big programmers engage in it.
The Reuters story tries to imply that the entire industry is willing to go down the a la carte road, but the only executives quoted are from Mediacom and Suddenlink, both of which only have a little more than a million subscribers and no substantial programming interests. For the distributors that own content, a la carte is a sticky issue they want to avoid like the plague.
One of the arguments against a la carte is that while it sounds good on paper, it would not actually lower cable bills. For example, if 40 million homes were suddenly given the choice to decide for themselves if they wanted ESPN and all said no thanks, than the other 40 million would see their bills go up to pick up the slack. That would be true for any channel under an a la carte system. There are also still technological issues as the 20 channels you want may not be the same as what your neighbor wants and figuring out how to deliver two extremely different packages of channels out of the same headend is no small task.
Of course, the networks, particularly the sports channels, could try to use a la carte as a way to drive down their programming costs. ESPN could go to the NFL and say that because it was now only in half of the homes it used to be in, it needs rights fees to come down. Then the NFL would have to tell the owners and the players that the TV gravy train is over. It’s a nice dream, but highly unlikely to ever happen.
Time Warner Cable has made some headlines with its plans to offer a low-cost cable package. While some see this as a sign as testing the waters for an a la carte package, given that several of the most popular networks including TNT, Comedy Central and Fox News are not expected to be offered, it probably will only have appeal to those truly looking to save some money.
-- Joe Flint