[opendtv] Why Can't I Have Just the Cable Channels I Want?

http://www.nytimes.com/2006/04/16/business/yourmoney/16frenzy.html

Media Frenzy
Why Can't I Have Just the Cable Channels I Want?

By RICHARD SIKLOS
The New York Times
April 16, 2006

AT the National Cable and Telecommunications Association convention 
in Atlanta last week, the cable guys were at it again. They were 
kvetching that the Federal Communications Commission had gotten it 
terribly wrong in pushing to loosen the way that cable television 
channels were packaged and sold. Essentially, the cable contingent 
says that its current practice of selling a package of 75 or so 
broadcast and cable channels is better for consumers and the public 
good than letting people pick and choose the 10 or 20 stations they 
actually watch.

The average price of extended basic cable - the type of channel 
package to which most of the nation's 73 million cable-watching 
households subscribe - is $41 a month, according to Kagan Research. 
Plenty of other premium channels and services are available, but the 
only cheaper option is truly basic: a package of mostly local 
stations with none of the popular cable channels (ESPN, MTV and CNN, 
to name but a few). At my house in Connecticut, for instance, basic 
cable runs me $13 a month.

The cable operators say that forcing them to give people more 
latitude over the channels they buy would constitute rank government 
interference, the equivalent of forcing restaurants to sell burgers 
and buns separately. The =E0 la carte model favored by some regulators 
would lead to much higher rates for individual channels, executives 
argue. Whereas that same $41 might get you only 10 hand-picked 
channels, the bundle model both pays for the infrastructure - all 
those pipes and set-top boxes and servers and repair trucks - and 
preserves the smorgasbord of big and small channels to suit all 
demographics and tastes.

Without bundling, programmers like Disney and Viacom might no longer 
be able to afford shows with smaller but loyal followings. Under the 
current system, they can produce niche channels like ESPN Classic 
because they are bundled with ESPN and other channels, the 
programmers say.

=46or the most part, the F.C.C. rolls its watchdog eyes and notes that 
the price of expanded basic has increased well beyond other goods and 
services over the past few years. It and the cable association have 
drawers full of studies disputing the other's studies about their 
studies. Kevin J. Martin, the F.C.C. chairman, showed up briefly in 
Atlanta to reiterate that he was not giving up the fight, even after 
recently cajoling cable companies to agree to put together a new, 
smaller tier of family-oriented channels that was a few dollars less 
than extended basic. "Putting more control in the hands of consumers 
is always good," he said.

Alas, the legislative year is rapidly winding to a close in 
Washington, making it unlikely that Congress will pass any =E0 la carte 
legislation this time around. Still, even a few renegade television 
providers are finding it difficult not to side with Mr. Martin. 
Cablevision Systems in New York and the satellite service EchoStar 
have done so, though they remain a clear minority. Comcast, Time 
Warner, the News Corporation, Walt Disney and others are lined up to 
harrumph at Mr. Martin.

The great paradox of this debate is that it comes as the number of 
media options is exploding and the way they are being priced is all 
over the map. The much-maligned bundle will most probably prevail as 
the most popular business model for media, although it, too, is 
likely going to need an extreme makeover.

=2E..

http://www.nytimes.com/2006/04/16/business/yourmoney/16frenzy.html?ex=3D1302=
840000&en=3Da63c3b2dd60c8aad&ei=3D5090

 
 
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