More on A-La-Carte; DSL Falls; Young Men and Tech Glitches; The Prez and His BlackBerry

Professor Cory O'Connor, from Chapman University and formerly the Senior Vice President of Communications of The Disney Channel disagreed with my a-la-carte position in a comment he posted on this blog last week. 

I was SVP of Communications for The Disney Channel when it moved from a la carte to basic. I'm not without some loyalties to your industry, but you guys are overplaying your hand to protect your status quo, forcing us to pay for Sumner Redstone's excrement. ....  I am firmly in the camp of a la carte, Michael, and I intend to stay on your case about this. I hope David Lazarus from the Los Angeles Times does also.

To fully review his position I am linking to his entire post as I want to give everyone an opportunity to consider his position.  

Professor O'Conor did not, however, address the economic issue I raised in last week's post.  Instead, he responded to an earlier post of mine in which I argued that a-la-carte would dramatically "dumb down" television by reducing the number of choices people have.

Professor O'Connor argues that there is too much junk on television.  Frankly, on that I agree.  But instead of reducing junk, government-mandated a-la-carte would increase the dominance of programmed-for-the-masses junk.  Why?  Because it will put serious financial distress on the narrow appeal and often much higher quality niche networks.

Referring to me as the industry "pit bull" over at his blog, Leprechaun Lexicon (that's ok, I'm pretty thick-skinned), Professor O'Connor should not misinterpret my motivation for opposing government-mandated a-la-carte.  He suggests that I am protecting the status quo, I guess to protect the current business model. 

He doesn't know me very well.  I have a long and storied history of poking holes into current business models and habitual business practices.  Just ask my colleagues.

Contrary to his comment that I am simply, "telling consumers to go jump off a cliff," in fact, I am deeply concerned about the ongoing economic viability of cable's video product.  I understand that a-la-carte can sound very attractive when you ask, "Would you rather have the option to get only the channels you want and only pay for them?"  Heck, I'd answer "yes" too if I didn't have the potential impact explained. 

Why do I worry about the economic viability of today's video product?  Because network fees are skyrocketing and only a fraction of those higher license fees are being passed along to consumers. 

Something has to give.

I've heard the argument that a-la-carte could help solve that problem.  Unfortunately, I just don't believe it.  Instead, I believe it will dramatically limit the number of choices consumers will have which simply is bad for America.  And, as I said last week, it will make the fewer surviving channels both more similar to each other and much more expensive to consumers. 

I gather from his posts that Professor O'Connor was a Senior Vice President at the Disney Channel when, in 1995, they announced that they could no longer economically support a-la-carte distribution.  They told their distributors that, in order to stay in business, Disney Channel would have to move to basic cable.  Operators were required to agree to move it there or they would have to drop the channel at the expiration of their contract. 

That was a business discussion between a single network and its distributors.  It was not an industry-wide government mandate, applied to all networks and distributors.  How many networks would find themselves in Disney's position with no alternative to going dark if the law required a-la-carte?

More than you could imagine.

Will DSL Survive? [Multichannel News]

For nearly thirty years, telephone companies made the decision to keep DSL technology in the vault because they didn't want to introduce a product that would compete with their valuable T1 business. After cable companies unveiled the first generation of cable broadband in the 1990's, the phone companies finally decided to pull DSL out of the vault because they finally new they had to market the product - as a competitor to cable broadband.

But, after a decade DSL subscriber growth is falling fast, with cable subscribers outpacing DSL at a 3-1 rate. Cable broadband is quickly becoming the service of choice due to its superior speeds when compared to DSL. And cable operators aren't sitting on their laurels. DOCSIS 3.0 technology is in the process of being tested, which promises initial speeds of 50 Mbps and future speeds up to 200 Mbps.

According to this article, while telephone companies are wiring some areas of their choosing with direct fiber-to-the-home or -node, most areas will continue to be served by slower DSL for years to come. And those slow DSL speeds mean that someday soon, DSL will be heading the way of dial-up Internet.

Study: Young people, men more optimistic when tech fails [CNET News]  

The Pew Research Center's Internet & American Life Project has released a survey of over 2,000 Americans that indicates young people and men are marginally more confident when faced with technology problems. 

"Although young adults age 18 to 29 years old are no more likely to be able to fix devices on their own, they were significantly more likely to be confident that they were on the right path to fixing it, and they were significantly less likely than older adults to feel discouraged or confused about fixing devices," according to the report.  

There's no data about how successful the younger generation is in fixing their technology glitches, just that they're more confident when faced with them. Overall, 48 percent of the people in the survey said that they need help setting up and learning to use a new tech device.

Lose the BlackBerry?  Yes He Can!  Maybe [New York Times]

The burning question in the minds of political and tech junkies is whether President-elect Barack Obama, already known in political ciricles for an executive-style BlackBerry addiction, will take his BlackBerry to the White House. He will be the most tech-savvy president, after taking the oath. This weekend Obama introduced America to the first of many presidential addresses via YouTube. But the BlackBerry is another question due to the fact that many of his emails would be subject to public disclosure. So, Obama may decide to give up the 'Berry. Nevertheless, Obama plans to be the first president to keep a computer on his desk in the Oval Office.

Comments

[Chris Buechler]

DSL isn't going to die. It'll continue to shrink in market share without significant performance improvements, but there will be a significant market share for DSL for the foreseeable future. There are quite a few places where cable isn't an option and DSL is.

There are other places where cable could be an option, but install construction fees are prohibitive. I have tried to get Insight service at a few locations for one company, only to find install costs ranging from several thousand dollars to into 5 figures due to construction required to get cable into the building. There are undoubtedly numerous companies in similar situations. Those locations have DSL. Not that I blame Insight for needing that much money for install - no company can afford to spend $10K on construction costs to get a thousand bucks a year in revenue.

Unless LECs in the US find a way to implement ADSLv2 as many other parts of the world have, which offers similar speeds to what cable in the US currently offers, DSL will become the new dial up. But there will be a lot of people stuck on that "new dial up" until a better option is available. Heck, there are still a lot of folks stuck with "old" dial up!