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Ala carte programming — who pays for what?

November 30, 2005

The FCC yesterday came out endorsing “Ala carte” programming from cable and satellite providers — as a way to give parents more control over the type of programming coming into their house.

The full statement of the FCC Chairman before the Senate yesterday is here (Acrobat document), but one section that caught my eye was this:

Last year, former Chairman Powell and previous staffer Ken Ferree submitted a report to Congress concluding that a la carte and tiered pricing models (such as a family tier) were not economically feasible and were not in consumers’ interest. I had many concerns with this report, including the logic and some of the assumptions used. I asked the Media Bureau as well as our Chief Economist to take a more thorough look at the issue. The staff is now finalizing a report that concludes that the earlier report relied on problematic assumptions and presented incorrect and incomplete analysis.

For example, the report relies on a study that assumes that a move to a la carte pricing will cause consumers to watch nearly 25% less television. It seems unrealistic that we would see this kind of decline in viewership simply because consumers could purchase only those channels they found most interesting.

Second, the report relies on a study that makes mistakes in its calculations. For example, the report fails to net out the cost of broadcast stations when calculating the average cost per cable channel under a la carte pricing. As a result of this mistake, the report understates the number of cable channels a consumer could purchase under a la carte pricing without seeing an increase in their bill

I agree with them that the idea that being able to get rid of channels we don’t want to watch doesn’t seem likely to cause us to watch 25% less television, but I find the idea that the price could go up rather intruiging.

I subscribe to a “180 channel” package from my satellite provider. A quick look at the list shows that even on a year including the coldest day in hell, I’m unlikely to ever watch more than 60 channels or so of it.

The remainder falls into about four categories — programming in languages I don’t speak, premium and/or public interest content I’m uninterested in (some of the more esoteric sports channels, for instance), “audio only” channels, and shopping.

Nevermind the first two — obviously other people are interested in some of these, and would probably pay for them. The audio stuff falls into the “just plain dumb” category for me, but again some folks are big on it.

What I’m wondering about is are the shopping channels.

I know that most of the rest of the programming falls into the category of the cable/satellite provider paying so much per household. Do the shopping channels? Or are they actually paying the cable/satellite providers for reach?

If it’s the latter, then are these actually subsidising some of the other programming? Does any other programming do this? If so, then that would explain how the cost might go up, I guess.

It seems to me that what this comes down to is, at the end of the day, what costs more?

I don’t have a problem with all of this bundled crap — channels that absolutely don’t interest me, I remove from the channel list on my DVR. No muss, no fuss, and no “favorite” guessing on the part of the DVR deciding I might have suddenly developed a taste for movies in Mandarin.

Do modern non-DVR satellite receivers and cable boxes have the ability to remove channels? I haven’t been around any in quite some time, so I don’t know. I know that for those who tune through a TV without a set-top box, it’s been a very long time since I’ve seen a TV that didn’t let you remove channels from the available channel list.

Because it seems like that’s the easiest answer for the “objectionable content” question that this is all addressing, as well.

If you don’t want little Johnny watching FX or Spike TV, and you can’t be bothered using the ever-growing number of parental control tools (V-Chips, etc.) then remove FX or Spike TV from your list of available channels.

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Comments

3 Responses to “Ala carte programming — who pays for what?”

  1. professional web design on December 2nd, 2005 6:46 am

    i think they just made a right move. at least they could easily rate the audience intersts and make an improvement about it.

  2. Chuck Lawson on December 2nd, 2005 4:20 pm

    I don’t think there’s anything wrong with it, as long as it doesn’t result in a net increase in user’s bills.

    I do think it’s a silly way of dealing with the issue they’re attempting to address, however.

  3. Marc Olson on December 8th, 2005 1:47 pm

    I fail to see the what the big deal here is. I’ve been able to select only the channels I actually watch using my C band dish receiver. It is less expensive than the packaged channels and I never get side tracked by some goofy, gotta’ see it, train wreck of a program!

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