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.