Commentary

Cable's A La Carte Programming: Just Trimming Fat Or Protecting Kids At A Higher Price?

A new push for cable a la carte packaging has cable networks and consumers up in arms--but they should put down their weapons and come to the peace table. That's because in an increasingly glutted world of entertainment, it's time to trim the fat.

Not only that, but Federal Communications Commission chairman Kevin Martin says a la carte cable packaging--which lets consumers pick and choose the exact channels they want--will have a better benefit of allowing parents to control indecent content that comes into the home.

Cable network executives are moaning that cutting distribution will send their business into chaos, and that parental control will have the opposite effect--putting marginal family-friendly channels out of business. Established cable networks that have 85 percent-plus distribution of U.S. homes right now--such as Nickelodeon, Discovery Channel, TNT, USA Network, and ESPN-- would see distribution sinking to a wide variety of levels. Perhaps some would have 75 percent of their current subscribers; others might see subscribers dipping as low as 25 percent of their current base. At those levels, cable operators might need to charge an extra $2 to $6 a month. But cable operators aren't scared of raising rates: next year Comcast Corp. will raise rates 6 percent while Time Warner goes for a 3 percent hike.

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This is not a bad thing--not when there are hundreds of channels available-- channels which probably shouldn't be on in the first place. Consumers won't go lacking for entertainment--not with the Internet and other ways to access content.

Cable networks naturally won't be able to sell national advertising the way they have over the last two-and-a-half decades. That's going to mean one of two things. Either there will be a change in the way national advertising is bought via cable--perhaps to a more spot-TV or Internet advertising approach. Or, there will an increase in the prices cable operators pay... and those operators, in turn, will raise prices for selected networks to consumers.

For years, the cable industry has proclaimed that selling hundreds of channels together has kept down the average cable TV bill.

Let us say a la carte packaging happens. My guess is that content providers will be more aggressive, more competitive. Perhaps at first the average $50 a month bill will rise--for cable (or satellite). But then it should fall. Then the average cable consumer who watches ESPN, CNN, ABC, and NBC won't be subsidizing his neighbor who watches only CBS, Hallmark Channel, Nickelodeon, and USA Network. The FCC now says things won't cost more--but if they do, that's OK. The whole indecency issue then comes down to this: Parents will pay anything to protect their kids from what they consider is indecent content.

The alternative? Having Janet Jackson's breast occasionally flash by your five-year-old child's eyes. You don't want that? That'll cost you another $20 a month. Save where you can.

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