A la carte attracts comments
Bear Stearns analyst Victor Miller says that the cable industry is not going to be very happy with FCC Chairman Kevin Martin's practical endorsement of a new a la carte channel selection system - - a safe observation since at the same session, NCTA's Kyle McSlarrow called any such mandatory regulation unconstitutional. Although Miller thinks establishment of such a thing is beyond the FCC's scope, he said it may provide cover to legislators who could make it a matter of law. Meanwhile, Consumer Union's Gene Kimmelman came out in favor of the concept, while BuzzMachine blogger Jeff Jarvis attacked it, kind of. Jarvis notes the argument made by NCTA and by new entrants to basic cable such as Radio One's Television One - - that channel bundling is necessary to preserve diversity and give new entrants a chance to get established - - but he seems to think that on-demand is the new wave and it'll change the whole ballgame regardless of how the current skirmishes turn out.
More reporting on their comments
Pro a la carte: Gene Kimmelman of the Consumers Union praised Martin for "...striking at the heart of the cable industry's flawed pricing model which forces people to buy packages of television channels they don't want and shouldn't have to pay for. His support for 'a la carte pricing' should help push it forward, giving consumers' wallets a break and allowing them more control over their television choices. Cable companies and broadcasters have fought a la carte pricing for years, hiding behind the fallacious argument that popular and unpopular programming had to be bundled together to keep all programming afloat. Last year, the FCC issued a staff report based on erroneous assumptions that kept this charade going. Today, Chairman Martin has blown a huge hole through this fortress of deceit."
Anti a la carte: Meanwhile, BuzzMachine blogger Jeff Jarvis said the whole thing represented Martin's choice of attacking indecency at the expense of the continued health of the broadcast and cable industries. He said he'd be glad to only pay for the 15 channels he watches - - no need for 100. "The funny thing is that Martin, a Republican, is using his indecency crusade to hurt big business big time. At FourSquare, I challenged him on this, saying that the FCC's and PTC's fringe minority jihad against Howard Stern and free speech forced Stern to satellite and immediately shrunk not only the businesses of Clear Channel and next Viacom but also the entire radio industry. I said he should be paying attention to modernizing our infrastructure instead of to Stern's farts. Now, by threatening regulation and censorship of cable in the form of trying to force a la carte pricing, he will be doing the same thing - - he will be shrinking the network TV business."
Jarvis's argument on the effect of a la carte: "For if a la carte pricing really comes into effect, it will kill off lots of channels that could not be supported in the open marketplace. That is, there aren't enough people willing to support channels on their own and they survive only because they are subsidized via bundled pricing and cozy deals among the holders of content and distribution in cable. If they had to make it on advertising alone, they'd fail. If they had to make it on consumer fees alone, they'd fail. They simply don't have the audience to support either. But cable companies make more by making us buy more TV and so they survive. That is the system Martin is threatening to break. And when it does break, this will drive people to finding different, better, cheaper, easier means of getting the programs they want. And it will drive program owners to find more and more efficient ways to distribute their shows to larger audiences. Just as today, we no longer know the difference between broadcast and cable, soon enough we won't know whether the shows we want to see come from a network or from the internet. And when we reach that world, we'll no longer be hostage to network programmers' schedules. And then we'll have to ask: What is a network, anyway, and why do we need them? The world of on-demand content is coming."
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