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FCC may approve cable a la carte

Or it may not.

Do you ever read anything other than blogs, especially this blog?
Just curious.
 
Surely you've heard of the WSJ.

> Do you ever read anything other than blogs, especially this
> blog?
> Just curious.
>

mwebster, the FR poster pasted an excerpt from the online edition of a venerable newspaper I'm sure you've heard of: the Wall Street Journal.

Unfortunately, you have to subscribe to the WSJ print edition in order to access this article. I don't. Do you?

ixnay
 
> ...policy shift?
>
> http://www.freerepublic.com/focus/f-news/1530249/posts
>
> ""This report will conclude that à la carte could be in the
> best interest of consumers," said an FCC official familiar
> with the revised report's contents. The report also finds
> that "themed tiers" of channels could be "economically
> feasible," the official said."

<a target="_blank" href=http://www.msnbc.msn.com/id/10249339/>Here's an MSNBC article</a> on the subject.

Trouble is, I don't belive the FCC has the authority to direct cable companies to offer ala-carte services. They can only say "We're OK with this but do what you want."

Also, is it practical? The increased costs to the cable companies to do this, both technically (an addressable converter box would be absolutely required) and administratively, I think would be too high. A flat fee would have to be assessed to cover these costs, as well as the cost of renting a converter box for each TV in the house.

Then you'd have to add up the cost for each channel you want. Let's see...I want all 6 channels ESPN provides, all the Fox Sports Net channels, CNN, FNC, MSNBC, the History Channel, the Discovery Channel, etc., etc., etc. It'd add up in a hurry.

And, what about local over-the-air stations, government- and public-access channels, educational channels (non-PBS), and the like? Would they be free as part of the flat fee or would they charge as well? I'd think they'd want to be available no matter what.

I'll take a wait-and-see attitude toward this, but it doesn't sound promising.
 
That would be great!
I would love not to pay for channels I do not watch like:
HGTV
DIY
Speedvision
OLN
ComcastSportsNet
Fox News Channel
CNN
MSNBC
TLC
Discovery
BET
E!
Lifetime
Disney Channel
Animal Planet
etc.
 
> ""This report will conclude that à la carte could be in the
> best interest of consumers," said an FCC official familiar
> with the revised report's contents. The report also finds
> that "themed tiers" of channels could be "economically
> feasible," the official said."

And the cable industry will promptly sue saying they are being deprived of their free speech (yes, channel packaging is considered free speech by them and they've sued over it before) as well as claims the last round of deregulation means that the FCC doesn't have the authority to impose a-la carte on the industry.

They also have multi-year contracts with programmers that specifically forbid tiering, and the courts will have to invalidate those contracts, many of which don't expire until after 2010.

This won't end with an FCC declaration by any means.
 
> ...policy shift?
>
> http://www.freerepublic.com/focus/f-news/1530249/posts
>
> ""This report will conclude that à la carte could be in the
> best interest of consumers," said an FCC official familiar
> with the revised report's contents. The report also finds
> that "themed tiers" of channels could be "economically
> feasible," the official said."
>

Rock! All I want are my locals (which I could theoretically just get w/ an antenna), TWC, CSN Chicago, CNN HLN, MSNBC, USA, TNT, Cartoon Network, Discovery, ESPN, ESPN2, ESPN U, WGN, History Ch, IFC, Sundance, Nick GAS, and VH1 Classic. (and throw in CMT, TLC, and Life for the GF)

-A<P ID="signature">______________

</P>
 
From CNN:Money -

Last year's FCC report on the subject found that most U.S. households would face higher television bills if they only paid for the channels they wanted to watch.

The commission said then that increased costs for marketing and equipment would force up monthly bills by 14 percent to 30 percent for most cable or satellite TV customers even if they only paid for a handful of stations.

---

Interestingly, the FCC has now done a 180 on this point? I'd love to read the methodology. This is going to be a substantial rate increase for any subscriber who does not use a converter box. The industry will probably digitize all of the existing analog channels to recapture capacity, as they will need to encode the signals anyway because hardware filters are not feasible for this kind of a-la carte.

That means every set hooked to cable will now need a converter box which will average around $5-7 per month per box. Have three sets? Your bill is now $15-21 JUST for the converter box before programming is even factored in. Oh, and throw in another 25c per month for each remote control too. HD set owners can use a cable card, but they will sacrifice the program guide and, often, PPV and on demand services.

Then you buy program packages. I guarantee you the industry will price them to discourage people from considering them and stick with the current tier. But they also win if they can now digitally compress their entire lineup because that's a lot of analog bandwidth they can take back and use for HDTV, etc. And the end consumer will pay for it.

The better idea is to compress the current enhanced basic package down to a smaller size and charge less for it. Those who want the niche channels we've seen thrown on the enhanced basic tier in the last 5-7 years could then pay for digital cable and receive them as an add-on bundle. This could be decided based on channel ratings, for instance. The lower the rating, the better the chance the channel ends up on digital cable.
 
A la carte would be great. I could pick and choose: local stations would probably be a must-carry, though. Sports channels; Cartoon Network; the news networks,
and so on. I would DROP any home shopping, foreign language, or channels I
don't tend to watch like Outdoor Life (sorry, NHL! :) )

> Rock! All I want are my locals (which I could theoretically
> just get w/ an antenna), TWC, CSN Chicago, CNN HLN, MSNBC,
> USA, TNT, Cartoon Network, Discovery, ESPN, ESPN2, ESPN U,
> WGN, History Ch, IFC, Sundance, Nick GAS, and VH1 Classic.
> (and throw in CMT, TLC, and Life for the GF)
>
> -A
>
<P ID="signature">______________
raccoonradio5ap.gif
</P>
 
They're afraid they'll lose many viewers who simply won't want certain channels.
I bet right now they have agreements which say "to be able to carry THIS channel,
you MUST carry THIS one..." Similar to what you see in baseball: Want to have this great young pitcher? Fine, but you'll have to also eat the contract of our
overpaid, aging hitter....THEN we'll do the trade...

> And the cable industry will promptly sue saying they are
> being deprived of their free speech (yes, channel packaging
> is considered free speech by them and they've sued over it
> before) as well as claims the last round of deregulation
> means that the FCC doesn't have the authority to impose a-la
> carte on the industry.
>
> They also have multi-year contracts with programmers that
> specifically forbid tiering, and the courts will have to
> invalidate those contracts, many of which don't expire until
> after 2010.
>
> This won't end with an FCC declaration by any means.
>
<P ID="signature">______________
raccoonradio5ap.gif
</P>
 
> don't tend to watch like Outdoor Life (sorry, NHL! :) )

I don't even know what channel OLN is on my cable. I think it's up on the digital teir.

-A<P ID="signature">______________

</P>
 
> They're afraid they'll lose many viewers who simply won't
> want certain channels.
> I bet right now they have agreements which say "to be able
> to carry THIS channel,
> you MUST carry THIS one..." Similar to what you see in
> baseball: Want to have this great young pitcher? Fine, but
> you'll have to also eat the contract of our
> overpaid, aging hitter....THEN we'll do the trade...

I could also see a decent-sized chunk of cable subscribers going away, but not from the reason you gave.

Other side of the coin:

They'll also lose some subscribers who will lose the marginal, special interest channels that they subscribed for (HGTV, Fit TV, etc.) because those channels would eventually fold up for lack of "a la carte" subscribers. The per subscriber charge is the bulk of their income, not advertising. (And there would be little advertising for channels that lose households as a result of this scheme.)

Just because YOU don't like DIY or BET doesn't mean there aren't people who do, and if you force the question of a channel's existence being based on how many people positively commit to receiving it, you will doom a great number of channels.

Hell, even MTV could be threatened, if mom and dad refuse to pay specifically for it.

This is one that I hope the cable industry wins. (And I happen to be a DirecTV subscriber, so it is rare for me to side with them.)<P ID="signature">______________


</P>
 
I bought a la carte programming with my C band dish for several years and saved a fortune. I had HBO and about a dozen basic channels for $200 a year. Looks like a la carte prices have gone up, too. This is what channels cost on the big dish:

http://www.callnps.com/alacarte.htm
 
Learn from the auto industry?

Comcast and the other cable outfits and both direct satellite program
suppliers are built on the model of the major American automobile
companies:

We'll offer the models we want to and then advertise them so the sheep
will flock to them.

It worked for most of a century.

Nobody ever figured Japan would learn to build things better. Remember
when "Made In Japan" was painted over the Budweiser labels on the
sheet metal from which their cars were made?

Nobody ever figured Japan would do a better job of market research to
find out what models The American Consumer really wanted.

Nobody evere figured Japan would get market-wise enough to quickly kill
off unpopular models and replace them with something very "trendy".

Ford and GM still haven't figured it out. They believe the way to
success is downsizing to the point where there are zero expenditures.
Of course then there's no product and, therefore, no revenue. But it
seems to work because Wall Street soars when jobs are cut and factories
closed.

What's gonna reform TV is when some Asian company secures one or more
satellite positions with footprints over the U.S. and offers a la carte
programming. But with superior technical quality; cleaner pictures,
crisper audio, higher reliability. Yeah, their prices may be a little
higher but people would willing pay to get what they want. Check
the sticker prices on Toyotas and Hondas against the sticker price
on Ford and GM products and factor in the discounts being offered to
bribe customers to buy Ford or GM. But look how many un-discounted
Hondas and Toyotas are being sold these days and how they're building,
not closing, plants.

Trust me, there is NO American-owned cable or DBS operator who would
dare try it. Or, even who could try it since they've allowed themselves
to be locked into multi-year contracts.

And what's this I heard this morning on a business report about The
FCC figuring it CAN regulate "obscenity" on basic and second-tier
cable/satellite programming? Seems that in order to get the "good"
channels people are being forced to pay for stuff that offends them!
That could be the door to a la carte swinging wide.
<P ID="signature">______________
Misanthropy:

Not just a hobby...a WAY OF LIFE!</P>
 
> I bought a la carte programming with my C band dish for
> several years and saved a fortune. I had HBO and about a
> dozen basic channels for $200 a year. Looks like a la carte
> prices have gone up, too. This is what channels cost on the
> big dish:
>
> http://www.callnps.com/alacarte.htm

I wonder if that's also what a la carte pricing would look like with cable ...<P ID="signature">______________


</P>
 
> > I bought a la carte programming with my C band dish for
> > several years and saved a fortune. I had HBO and about a
> > dozen basic channels for $200 a year. Looks like a la
> carte
> > prices have gone up, too. This is what channels cost on
> the
> > big dish:
> >
> > http://www.callnps.com/alacarte.htm
>
> I wonder if that's also what a la carte pricing would look
> like with cable ...

If so, please, please, bring it on. Even assuming prices would be a little inflated with cable's monopoly power, I'd still be paying half what I am now.
 
Cable In The Near Future

> Then you buy program packages. I guarantee you the industry
> will price them to discourage people from considering them
> and stick with the current tier. But they also win if they
> can now digitally compress their entire lineup because
> that's a lot of analog bandwidth they can take back and use
> for HDTV, etc. And the end consumer will pay for it.
>
> The better idea is to compress the current enhanced basic
> package down to a smaller size and charge less for it.
> Those who want the niche channels we've seen thrown on the
> enhanced basic tier in the last 5-7 years could then pay for
> digital cable and receive them as an add-on bundle. This
> could be decided based on channel ratings, for instance.
> The lower the rating, the better the chance the channel ends
> up on digital cable.

That's probably going to happen regardless of whether a la carte takes off... oh, except for the "charge less" part.

There's no good reason for cable companies to have such a large analog lineup. Every analog channel is a place where they could be putting multiple digital channels, or offering some sort of interactive service. This is where the big profits are going to come from in the future.

In the next few years, I predict we'll see analog expanded basic rates continue to rise, even as channels move to the digital tier. At the same time, digital rates will fall as cable companies give customers an incentive to get the boxes in their homes.

At some point, the least costly digital package will be only a few dollars more than the analog expanded basic package. The extra box fees will go down or go away completely as cable companies recognize that each box is a potential revenue stream. Cable companies will take a loss on the box and make it up with on-demand programming and timeshifting features available for extra cost.
 
Out of Market Stations and Syndex?

Hopefully the whole out of market and syndex will get tossed out too.
I can think of one occassion where getting an out of market station would be good, since last month our local ABC station ditched their Sunday night line up for a football game that was on ESPN. I know I would have prefered Desperate Housewives to the crappy Eagles game!
 
Re: FCC And Cable

Even if "A La Carte" becomes the standard, there will still be one tier of service: a low-priced "Broadcast" tier with local over-the-air TV stations, public, educational and government access channels, and maybe a channel run by the cable operator (i.e. Comcast systems in the Northeast and Mid-Atlantic----and other regions as that channel's reach expands----would have the company's CN8 network as part of this lowest-priced tier).

Everything else would be available on an "A La Carte" basis.

But it will be at least five years, more likely ten years, and maybe even fifteen years before tiers are replaced by "A La Carte" pricing/selection. It will take that long for litigation to go through the courts.
 
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