Imagine going to the store for milk, butter and eggs, only to be told at the checkout counter that you can’t have these items unless you also buy rhubarb, cream of asparagus soup, hot sauce, parsley and a quarter-pound of head cheese. Even if you like rhubarb, cream of asparagus soup, hot sauce, parsley and head cheese, you would probably scream murder. You would be a fool not to protest.
However, cable TV subscribers routinely pay for dozens of channels they never watch in order to get the relative handful they enjoy. This is another example of cable’s “take it or leave it” attitude toward customers.
Times may be changing. In an effort to drive rates down, the Federal Communications Commission is floating a trial balloon that would mandate a la carte purchasing of cable networks.
You’re a fan of USA, Lifetime and TNT, but never watch Bravo, VH1 or sports? Fine, from now on all you have to buy is USA, Lifetime and TNT.
This proposal is not as radical as it sounds. Owners of back-yard satellite dishes have long enjoyed a la carte purchasing. Cable already has a version of it with tiered levels of basic service, as well as the options to choose from premium channels, such as HBO, Showtime and the adult services.
Nevertheless, a la carte cable is a long shot because of the forces that will be marshaled against it. Cable system operators don’t like it because they own many of the least popular networks, which otherwise wouldn’t be on. Niche networks — such as Home & Garden TV, The Food Network, The Nashville Network, even MTV — that have been piggybacking on the mass popularity of the likes of CNN, USA, TNT and ESPN will argue that a la carte pricing would put them out of business.
Interestingly, the most popular channels also are likely to oppose a la carte. CNN, ESPN and USA reap a monthly fee from virtually every cable home in America. Under a la carte, any household that opted not to buy them — ESPN would be especially vulnerable to omission by non-sports fans — would represent lost revenue.
One argument against a la carte is that losing a minority of viewers would entail higher prices for the majority. This would probably be true to an extent, but marketplace forces would exert pressure on rates. Most cable networks rely on dual revenue streams: subscriber fees and advertising. The fewer homes penetrated, the lower the ratings; the lower the ratings, the less that can be charged for advertising. So they’ll have to make their prices attractive to consumers to keep the ad revenues healthy.
The lobbying against a la carte by influential, deep-pocketed entities figures to be ferocious. This is all the more indication that the big winners would be consumers. It’s worth a stamp to let the FCC know how you feel.
The FCC is at 1919 M St. NW, Washington, DC 20554.
