Why Your Cable Bill Is Just Ridiculous

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In a rare moment of candor, and departure from the usual languid "Try rebooting the box" communication expected from cable companies, Time Warner Cable CEO Glenn Britt apparently said at the National Cable & Telecommunications Association annual cable show: “There are too many networks.”  

“There are a lot of general-interest networks that have lower viewership, and the industry would take cost out of the system if they shut those networks down and offered lower prices to consumers,” he said. “The companies involved would make just as much money as they do now because of the costs.”

Most cable subscribers are forced to pay for hundreds of networks, but they routinely watch less than 20. So why not allow consumers to choose cable channels on a channel-by-channel basis (so-called a la carte offerings)? The blame is often laid at the doorstep of the content providers that bundle little-watched channels with more popular networks. Kind of like when the nets say you can only have ad inventory on hit prime-time shows if you also buy some in other, far less popular dayparts. 

Then there is that dumb-assed argument that bundling supports diversity of programming, providing comfort for the 12 people out of 3.5 million subscribers who want to watch something in Hindi or Urdu.

Most industry studies say that a la carte pricing would be a bad deal all around, but a study by some academics from Middle Tennessee State University and Drexel University found..."that consumer welfare goes up unambiguously under a la carte pricing. The expected monthly expenditure per household falls by approximately 15 to 20 percent and consumer welfare increases considerably." But then reality rears its ugly head: "On the other hand, cable operator profits will fall (and) some programming networks benefit from a la carte pricing, while others are harmed (due, at least partially, to increased competition among close substitutes)."

While the cable and media companies point fingers at each other, lots of folks are making a cable-cutting end run and catching "TV" on some combination of Internet-delivered options like NetFlix, Hulu or replays posted on the Web by the networks themselves.

So the way I see it, by not stepping up and allowing consumers to buy only what they want via cable or dish, the nets and cable companies are slowly painting themselves into a corner where the only must-see-in-real-time offerings are major breaking news and big sporting events (which exactly explains the fantastical ad rates for NFL games).

Interestingly, the TV landscape can change in a season or two. Time was that nobody much watched AMC or Starz until they cranked some cool original programming -- and suddenly what would not have been on your a la carte list last year is a must-see now. One could argue that you would never have had that exposure to the new offerings without the 500 channel lineup. But let me be the judge of that.

I could easily pick 30 or so channels from my cable system and dump all of the rest. I can even think of a couple of the Big 3 (sorry, Fox -- never was, never will be) networks I could live comfortably without if it would lower my cable bill, their programming is that pathetic.

Although cost is the primary driver for a la carte pricing, navigation and search is also a pain in the ass with hundreds of channels to plow through. Here's an idea. Now that every channel is its own "brand," put the lineup in alphabetical order instead of by number. And let me delete from the menu the channels I have never -- and will never -- watch. Those alone would be improvements.

That is, until you get around to a la carte pricing.

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2 comments on "Why Your Cable Bill Is Just Ridiculous ".

1. Don Curry from FetchBack
   

   commented on: May 25, 2012 at 10:46 a.m.
   At this point, the industry is a commodity, it's all going to come down to accessibility. Going forward cable companies will still play this game understanding that how they price these networks is based on ecomonies of scale.
2. Bryan Durr from Boomer Life Media
   

   commented on: May 29, 2012 at 8:05 a.m.
   Good points here but what really drives up the cost are the retransmission agreements and the reason why $4.00 of every cable bill goes to ESPN. An organization that reports record profits year after year gets subsidized? By me? I don't watch ESPN, or several other networks and should not pay for them. Time to go to a true free market system in television, like the days of old and let consumers pick and choose who lives and who dies. You would see a marked improvement in programming.

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