Commentary

Where Do TV Broadcast Networks Fit In A La Carte Programming?

by Wayne Friedman , Staff Writer, May 15, 2013

It may be no coincidence that Sen. John McCain's bill to revamp most of the modern TV business -- including a plan to give consumers the option to buying as many cable channels as they want --- comes at the same time major TV networks are offering their new fall programming.

The logic increasingly makes sense to many: Why should consumers pay for 130 channels when they only watch, at best, 14 networks? The response from the TV business executives: If we offered you want you wanted, you'd pay more per month.

Major TV broadcast networks might not figure in this argument much. That's because most of the focus revolves around cable networks, especially those high-priced speciality networks like ESPN.

Paul Lee, president of ABC Entertainment Group, reminded journalists at a pre-upfront press conference that networks like ABC aren't cable channels. Broadcast networks still look to appeal to the widest possible number of people: men, women, young, old, rich, poor, and all those in-between.

If you have an over-the-air digital antenna — or even one of those digital "Internet" antennas from the controversial Aereo — you can get one of these wide-reaching networks. Cheap.

Yes, networks like ABC have cooking shows ("The Taste"), sports programming (the NBA), dramas, comedy, news shows, daytime talk shows, and late night entertainment. What a concept! For many, a broadcast network is like a cable network highlight show.

So-called "a la carte" programming — if somehow allowed to happened — would not only hurt many cable networks, it could be a major boom to TV broadcast networks that have been losing audiences for decades.

The theory of a la carte programming has been around for some time. But what McCain and others really get wrong is that "a la carte" programming isn't only about choosing specific networks. Increasingly, consumer behavior is about picking specific TV shows, not just Bravo over ESPN, HGTV over Fox News, MSNBC over the Food Network. Digital video platforms like Netflix, Hulu and networks own video-on-demand efforts have seen to this.

You just like AMC's "Walking Dead," but not "Mad Men"? Many younger viewers would tell you: Why can't I have exactly what I want?

The same should go for the broadcast networks. I'll take one "Castle" from ABC, a "Community" from NBC; a "Beauty & The Beast" from the CW; and a little bit of "Late Show with David Letterman" from CBS. Wait, I can do this!

A la carte programming will probably take on a new definition in the future -- possibly where consumers won't even want to buy and watch a whole TV program. Maybe just the highlights. Just the main course, not the salad or the aperitif.

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8 comments about "Where Do TV Broadcast Networks Fit In A La Carte Programming?".

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neal fondren from intermark group, May 15, 2013 at 10:51 a.m.
A la Carte programming on cable/satellite is a big mistake. Here's why: everyone knows that sex and violence sells. Quality and cultural, not so much. If networks are going to have to fight for carriage, you can pretty much kiss networks that are heavy on quality and low on sex and violence goodbye.
I toyed with the notion back in the 90s. I created blocks of programming and people could subscribe to interest blocks (sports, e.g.). People were excited about it at first, but soon, most subscribers came back to the full service. That told me people watched more of the other channels than they thought they did.
At the same time, networks like CSPAN got pretty upset at the prospects of people being able to opt out. Brian Lamb even called the CEO of the company I worked for to complain!
So I predict that going to a la carte programming will be a change for the worse. Everything will be ratings driven and we'll continue to see more sex and more violence and less cultural programming. The networks that decide to stay with cultural programming will simply not be able to stay in business.
Despite the headache of going a la carte, the distributors like directv and comcast will love it. they will structure programming so they end up making more money. I can pretty much guarantee that.
Senator McCain would be creating a bureaucratic nightmare with many unintended consequences.
Reply

Douglas Ferguson from College of Charleston, May 15, 2013 at 10:57 a.m.

My argument against is simple: Taxes are not a la carte, so why should cable channels be a la carte? McCain should understand that. Wouldn't it be nice to choose which government rat-holes to fund? Taxpayers would enjoy deciding where the money goes.

Mark Walker from aka Media Mark, May 15, 2013 at 11:09 a.m.

A la carte is simple gong to drive up everyone's cost, to pay all the greedy programmers anyway!

This will certainly make the broadcasters think they are worth MORE then ever...

I propose that in this fully-addressable world, delivery companies should offer a 13-channel "pick your own" package. While you say most watch 14 or less channels (I can think of 7 we watch regularly at my house, INCLUDING broadcasters) the old days of the original 13-channel cable was perfect. Make 'em all HD and charge me $30 like DBS does and throw in the DVR for 2 sets.

Edmund Singleton from Winstion Communications, May 15, 2013 at 11:18 a.m.

Say one has to pay more for a la carte programing, the point being one would not mind since one would know what one is paying for and would have a better since of a programs worth...

Paula Lynn from Who Else Unlimited, May 15, 2013 at 3:06 p.m.

I used to think a la carte was the way to go with no exceptions until I looked further into such "deals". There are no deals to be had. It will cost almost everybody more with control of programming into fewer and fewer hands giving us fewer and fewer choices. Mr. McCain, even if he thinks he has the best interests of the population at hand, he doesn't. Unless he does and committed to condensing the economics-power of the few. However, a dedicated sports, including ESPN package may have merit psycho-graphically.

John Grono from GAP Research, May 15, 2013 at 7:34 p.m.

I'm with Paula on this one. While I don't know the US pricing levels, here in Australia (one primary cable operator) I get all 86 channels for $110 per month. That is around $1.27 per channel per month or around 4 cents per channel per day. I would watch content on around a quarter of them so maybe 20 cents per day per channel watched. They also offer 'on-demand' at $2 per TV show and $4 per movie (i.e. around iTunes prices). So my $110 buys 55 TV shows or 28 movies - a movie a day or 2 TV shows a day and I'm in front. No wonder I bundled. And yes I love my sport - you can get cheaper tiered bundles without sport etc.

Chris Kennedy from Charter, May 16, 2013 at 2:09 p.m.

A couple of thoughts about A-la-carte:
First off the network has to be paid for, (as does the legal department, finance, HR, etc) I don't know for sure bu my recollection is that you can expect about a $30 overhead before you pay for a single channel. This is already an issue with Video/Voice/Data packages. The Data only folk (in particular) don't understand why they can get all three for $90 but can't just get data for $30. A-la-carte will expose the overhead. There needs to be a good story to justify the overhead.
2) I think that the channel line up will change, I am not sure that it will change for the worse. I used to like AMC, then they stopped running old movies so I now watch TCM. I used to watch more A&E now they are all reality and I don't watch them. In an a-la-carte world there will be more specificity to channels.
3) A-la-carte channels will lead to a-la-carte shows and more OTT programming. This will eventually drive service/network providers to be bandwidth providers (this the justification of the overhead)
See it all works out in the end.

Cece Forrester from tbd, May 16, 2013 at 5:30 p.m.

I don't think I'd end up paying more. An awful lot of my monthly cable fee is apparently going to sports networks and teams and players that I have zero interest in. The kind of stuff I prefer to watch costs a lot less. In any case I'd prefer to take my chances.

I'd be more inclined to listen to the overhead story if some kind of "thank you for your business and we know you have your choice of airlines" would come through along with it. Consumers don't like the idea of rewarding the middlemen for barely concealed contempt.