Cable Operators, Who Once Railed About A La Carte Programming, May Need To Go On A Diet
All roads are heading toward a very busy entertainment financial intersection of rising cable program costs meeting networks and content providers always searching for the next big thing.
The thing: distribution.
A big example is the almost 75% increase ESPN paid for "Monday Night Football," the best-rated program of any kind on cable. So up comes the discussion -- once again -- of a la carte programming. The difference this time is that the concept seems to be gaining some value from cable operators.
The discussion isn't totally about viewers picking and choosing from hundreds of networks, but more about putting networks on different pricing “tiers” -- especially sports programming. Operators don't want to foot the bill for big cable networks, with ESPN now commanding the highest fees of about $4 a month per subscriber. And that could go higher.
At the same time, a number of networks have been looking to run programming on digital sites like Hulu, or via mobile apps. Cable operators want a piece of this as well -- to protect what's left of a traditional television business that is at best "mature."
Operators have long argued that a la carte programming would mean higher costs for consumers. The operators themselves get cost benefits from big media groups that sell them many channels at the same time. But might this change.
Research shows that typical consumers watching an average core of five to nine channels. With hundreds of channels available – and the continued strength of Netflix and growing use of Hulu, where viewers get to pick and choose -- you can see where this is going.
Cable operators like Comcast, Time Warner and Cablevision have been looking to offer their own digital programming apps and services. Whether networks want this to happen long term is still undecided.
Right now, sports programming is a big issue. But what about scripted shows? News programming? Will they be the next genres subject of "tiering"?
And is full-scale "tiering" just a transitional move to a la carte programming? Some say it's only a matter of time before viewers will get exactly what they want – and that, if the technology exists for them to do that, media businesses need to adjust.
No wants wants to eat a full, perhaps gluttonous, meal anymore.