Two senior chief executives
of media companies defended the current pay TV distribution model -- believing that a la carte programming would not benefit consumers, nor that any legislation would come to pass.
you sit down to explain to regulators about what would happen in so-called a la carte world, it’s not good for consumers," said Philippe Dauman, president/chief executive officer of Viacom, at
the Goldman Sachs Annual Communacopia Conference. At the same conference, Robert Iger, chief executive officer/chairman of Walt Disney, agreed the current pay TV system is "a really good
bargain... I think the consumer is getting a good deal."
While it may seem like the right move for traditional media companies, Dauman says it always isn’t the case that media
companies get exactly what they should.
For example, he says, while Viacom channels make up 20% of viewership, programming fees paid Viacom are in the single-digit percentages, in terms of
the share of overall TV carriage fees. He said entertainment channels, in general, get less than sports networks.
A lot of the deal making for big media company’s array of networks
comes in “packaging," which can offer discounts to TV distributors. Dauman said: "We do have distributors who will pay higher rate for fewer channels, but most find it a better buy to have a
broader array and take the discount."
The "a la carte" issue is getting some high visibility. In recent weeks, a number of Congressmen, including one bill from Sen. John McCain (R-AZ), has
proposed legislation that would require cable distributors and other TV distributors to offer consumers the right to purchase only the channels they watch.
But Dauman believes the free
market would prevail. "I would expect that everything that would unfold would be done in a commercial marketplace, not in regulation."