I know it sounds like a great idea to offer all the cable networks individually and to allow consumers to pick and choose the ones they want.
But is it really?
I have no doubt that consumers will suffer if cable operators, by law, had to offer their channels a-la-carte. It sounds good at first but, when consumers face the reality of their new choices, they will discover that they are facing the prospect of having to choose far fewer channels than they have today or pay much, much more for them.
Because an important percentage of revenue for programming networks like CNN, ESPN A&E and Discovery comes from advertisers. Advertisers rely on ratings and ratings are enhanced increased by "accidental" viewing or the by-chance landing on a network by channel surfers. Take those viewers out of the mix, and, poof, viewership decreases and advertising revenue that supports program creation and development evaporates.
Bundling networks into packages has been great for consumers
When it comes to video product, cable and satellite distributors are indisputably successful. Together they serve over 90% of the nation's television households.
Think about it. Where else do you have seemingly endless entertainment and information options for $2 per day? Without the contribution of revenue from advertisers, the cost for those networks would have to be fully borne by consumers.
Life in an a-la-carte world
In an a-la-carte world, two bad things would happen.
- New networks would not get funded or launched
- Numerous existing networks would cease to exist
I oppose government-mandated a-la-carte, but not because it would be bad for my business. To be perfectly honest with you, unlike the networks, I don't believe cable operators would be negatively impacted in an a-la-carte world. In fact, some distributors think it would make their lives easier when it comes to dealing with the networks.
I oppose it because it would dumb-down television. It would force the networks to program for the masses. Is that all you want on television? In addition to mass-appeal programming, our current system encourages the existence of diverse, niche and narrowly focused networks.
Now I understand that there are times when we all feel like we have "500 channels and nothing to watch." But I have no doubt that a lot of really great services such as TV One, Hallmark, Biography, Discovery Green (one example of a future service), and dozens, if not hundreds, of other current and future networks would simply cease to exist or won't be created at all.
The cost of television today
I also understand that there are increasing costs that are putting serious price pressures on television. Sports programming, in particular, is spiraling out of control. But we must resist the temptation of blowing up a mostly successful system to deal with narrow problems within it. We have found other ways to offset increasing costs by creating new optional tiers of programming. And let's not forget that cable customers massively are finding opportunities to save money by purchasing our bundled voice, video and data offerings at attractively discounted prices.
Sure, a-la-carte absolutely sounds like a great idea, but sometimes something that sounds too good to be true is just that -- too good to be true.