Commentary

Trick Question: What Would You Pay For Access To CBS For A Month?

by Wayne Friedman , Staff Writer, August 6, 2013

Time Warner Cable has a new plan for CBS, in effect saying: Go a la carte and see if your loyal viewers will pay specifically for your network programming.

This strategy has been tried before -- in part -- when cable operators threaten (and actually) put sports cable network on regional tiers, a pseudo-a-la-carte formula.

A letter from Glenn Britt, chairman/chief executive officer of Time Warner Cable, to Les Moonves, president/chief executive officer of CBS Corp., offered up a more specific a la carte idea, saying Time Warner would be “willing to resume carriage by allowing CBS to make its stations available on an a la carte basis at a price and on terms of its choosing, with 100% of that price remitted to CBS.”

He added: “This way, rather than our debating the point, we would allow customers to decide for themselves how much value they ascribe to CBS programming.”

Nice. Time Warner Cable, in effect, says it doesn’t want make any money on the carriage of CBS stations -- which is a very positive public relations signal to any customer. But some might be suspicious.

It leads to other questions, like how much would consumers value CBS programming per month? Are consumers ready to do that consumer math? Of course not. Typically they have gotten CBS for free, or at least it feels free -- either over the air, or more recently, through multi-channel video program distributors -- cable, satellite, or telco companies.

Broadcast networks have long believed pure viewership data from Nielsen signifies value, that they still get higher ratings than the likes of ESPN, USA Network or AMC, meaning they are more valuable than cable networks -- in general. But while broadcast networks have long leveraged this value by asking for a higher wholesale price to TV distributors, the average consumer may not want to figure out what CBS is worth per month on a retail basis. Could it be $5 or $10 a month, say?

While Time Warner says it’s thinking about not profiting from CBS, another senior executive at a big cable operator, Cablevision Systems, is thinking about the day cable operators might not carry TV programmers/networks as part of their product/service line.

James Dolan, president/CEO of Cablevision, noticing how much time he and his children and are using the likes of Netflix -- via broaband -- for their TV consumption.

Perhaps future generations won’t need TV networks, he says. Not just broadcast, but perhaps cable networks as well. Good news for TV networks, then, in this regard: No more discussions and fears about a la carte programming.

10 comments about "Trick Question: What Would You Pay For Access To CBS For A Month?".

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Mark Walker from aka Media Mark, August 6, 2013 at 4:34 p.m.
Well for me, our home watches CBS about 62% of the week, NBC 15%, other b;cast 14% (ABC and FOX zero) and all cable about 9%. If I boil that down I'd say CBS is worth about $18 of my monthly DTV bill. But let's put that in perspective: I watch very little ESPN (except NFL games) and they grab about $5/month for me- so maybe CBS is worth about $5 bucks? The bigger value for my DTV is the DVR...
Reply

Rob Frydlewicz from DentsuAegis, August 6, 2013 at 4:44 p.m.

The only time I watch CBS is for the Tony Awards and during the year when it airs the Super Bowl. However, I still like having the choice of tuning in, especially as I get older and become part of CBS' core audience (hee-hee).

Michael Kaplan from Blue Sky Creative, August 6, 2013 at 5:23 p.m.

I'd much rather spend $5 on CBS programming than on ESPN. And frankly, I'd really like the choice to decide WHAT channels I get.

If Time-Warner wants to go a la carte, let's call their (obvious) bluff and GO a la carte. First to go: every shopping channel, every religious channel, every foreign language channel, every sports channel and every music channel. With the clutter removed, I can discuss what's worth paying for, and what isn't.

One thing's for certain: glad I'm not a Time-Warner customer.

Paula Lynn from Who Else Unlimited, August 6, 2013 at 7:29 p.m.

Pandora, Pandora. Open your box.

Edmund Singleton from Winstion Communications, August 7, 2013 at 4:55 a.m.

I think some people are like me, who watch a show because its available not because of any 'must see' desire. Any show that is paid out of pocket for, will be watched and be a 'must see' show...

Cheryl Nelson from The Food Channel, August 7, 2013 at 3:02 p.m.

Who needs TWC when you can get rabbit ears and watch over the air TV any time you want - and of course - you can always stream later - sometimes free - sometimes not! That's what my husband and I do and we are in the CBS demo - if you know what I mean! :)

Edmund Singleton from Winstion Communications, August 8, 2013 at 6:11 a.m.

Michael Kaplan, you stole my thoughts...

Doc Searls from Customer Commons, August 8, 2013 at 7:06 a.m.

This is interesting. We have always been consumers of TV channels more than customers of them. First they were free over the air. Then we paid cable for access to over-the-air channels. Then, once cable-only channels came along, we had bundles that masked actual costs. Then we had premium channels that cost an extra $12 or so per month. In the midst of all that the cable companies turned into retailers of bundled channels they bought wholesale. I gather from the news that CBS raising its wholesale price caused Time Warner Cable to opt out of carrying it. So if we look at TWC's NYC basic bundle channels (http://bit.ly/147w6bN), we see 61 channels, most of which are packing material. The price is $80. There are 8 channels, including CBS, in the first 13. These are your top channels. Of those, the leading brands are the original occupants of those over-the-air channels (2,4,5,7,9,11,13). Of those the ones that matter are 2 (CBS), 4 (NBC), 5 (FOX), 7 (ABC), 11 (CW) and 13 (PBS). This is also Aereo's main lineup (https://aereo.com/channels). Aereo is today's CATV (community antenna TV, the ancestor of cable). Here in NYC, its bottom price, including CBS, is $8/month. Let's say CBS, as #1, is worth somewhat more than the rest. We would come up with a price between, say, $2 per month and the full $8 just for customers who want CBS and can't get it from Time Warner Cable. That's what people would, and do, pay. (Note that here in NYC, the new digital signals work only if you can see the Empire State Building. If your apartment windows look elsewhere, good luck with the rabbit ears. Because of this fact, Aereo has a substantial market.)

Lisa Gansky from The Media Trust, August 8, 2013 at 11:44 a.m.

I'd much prefer a la carte, but I have to admit, I am worried they won't keep it truly a la carte. I would love an option to get just NHL Network and NBC Sports during hockey season, but these get bundled with other sports stations, and as of last year, NFL ticket was added, jacking up the price from 5.99 to 8.99 a month for the Sports package. So if it's truly a la carte, great. I'll pay for it. But if it gets bundled with stuff I don't want, I'd just as soon watch it free online.

Marla Goldstein from Around The Bend Media, August 8, 2013 at 8:40 p.m.

A la carte for one, a la carte for all. I am a TWC hostage and as such, will be forced to carry their freight for those multi-gazillion dollar contracts they signed for the LA Dodgers and the Lakers. I hate the Dodgers with the fire of a 1000 white hot suns and am no basketball fan, either. Do what Cablevision has done in NY with the Yankees and set up something like YES and let the people who want to watch those bums pay for the privilege. I ain't one of them. Over to you, Glen Britt. As far as the original question, I can (and currently do) watch CBS OTA. Wouldn't pay a dime more. Les, you greedy so and so.