TV A La Carte -- From The Start

Perhaps Intel has the right approach to revolutionizing the way we buy our traditional TV service – initially, anyway.

Intel aims to start an Internet-delivered video service that allows customers to choose the channels they want – unlike the current cable, satellite and telco TV distribution systems.

No one can expect the likes of Comcast, DirecTV, Time Warner, or Dish Network to radically changed their entrenched business structure – some 30 years old -- that pushes selling scores of channels (typically some 200 of them) at the same time to all their consumers.

Intel has a big war chest and is ready to spend some $2 billion on TV programming deals. But here's the catch, at least according to reports: Intel wants to pay the same price for all networks – CBS, NBC, ABC, Fox, and their associated cable/broadcast networks.  Or at least similar deal points.



The problem is that no two networks – broadcast or cable – are the same. Is CBS worth the exact same price as Fox? Harder still: Can ESPN be compared to Bravo, Discovery, Food Network, Spike or CNN?

ESPN gets just over $5 a month per subscriber from current TV distributors. TNT, USA, and TBS get around $1. Other cable networks get less, through a variety of different pricing configurations, pegged to whatever group deal has been reached by their TV network holding companies.

Confusing the matter further, some reports suggest broadcast stations that run network programming are getting anywhere from 50 cents to a dollar per subscriber per month.  The big broadcast networks say that, from a pure viewership model, they and their affiliate stations should get more than anyone – ESPN or otherwise – since they maintain the biggest audiences.

All this is at the root of the a la carte enigma. Somehow Intel does want to play fair. But fair in relation to what?

Then of course, what does the viewer want? An up-and-coming network might want to promote itself. But on the Intel system, where would it do that, especially if viewers don't have that network in their “a la carte” programming package? On the 'home” screen perhaps?

Currently, via local cable avails, competing cable networks can promote on each other's channels. But this is no-no with the broadcast-networks.

What can Intel do about that? Money, of course.

As part of an overall deal, Intel plans to pay 50-75% more to content providers then they currently get in TV distribution deals.

Well, for sure, that's an incentive – especially considering all networks will be working with a lower U.S. TV consumer footprint. Under an a la carte system, all networks would immediately take a hit from lower national advertiser revenues – 30-50% and more.

Keeping the same fattening TV consumption system, dieting on a la carte, or just better TV viewing fitness? Consumers will have it their way.

6 comments about "TV A La Carte -- From The Start ".
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  1. Brian Hayashi from ConnectMe 360, June 11, 2013 at 4:04 p.m.

    Perhaps it is a market signal that all broadcast affiliates should be treated, if not exactly the same, then at least as if they are in the same class.

  2. Paula Lynn from Who Else Unlimited, June 11, 2013 at 5:25 p.m.

    And all CEO's will be paid as much as their janitors except the janitors will be missed first and most.

  3. Edmund Singleton from Winstion Communications, June 12, 2013 at 5:39 a.m.

    Here is what I know; DirecTV charges me $2.00 a month for a sports package that I hate. Cord cutting will come easily for me...

  4. Robynne Wildman from Standing With Agnes Nixon, June 12, 2013 at 8:14 a.m.

    I look forward to choosing which channels I receive - wait, you can sort of do that now, with the internet.

  5. Michael Kaplan from Blue Sky Creative, June 12, 2013 at 3:22 p.m.

    So I'm forced to pay $5 for ESPN although I watch absolutely zero programming on ESPN. How does that make any sense at all? No one asked me if I wanted to subsidize overpaid athletes. Personally, I can't wait for a la carte programming...

  6. Marla Goldstein from Around The Bend Media, June 13, 2013 at 1:58 a.m.

    Ah yes. TWC is forming a RSN because they've agreed to pay the LA Dodgers and the LA Lakers a bazillion dollars for their broadcast rights. And how does TWC aim to make that money back? From its subscribers, of course. Of which I am one. I'm not a baseball fan, don't watch it on TV and I especially HAAAATE the Dodgers, seeing as how they deserted Brooklyn--where I'm from--and I've never forgiven them for it. I had to transfer my allegiance to the Yankees. I wouldn't pay to watch them, either. As for the Lakers, I have no words. Don't want to pay to watch them at all.

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