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December 5, 2005

Buying TV by the Channel

Spurred by indecency on cable and radio, the FCC is considering proposals that would turn the market for cable and satellite television upside-down.  The idea is to let consumers by television by the channel rather than by the tier.  Cable and satellite prices tend to rise, often with the justification that the costs of adding new channels is responsible.  The question is whether the consumer absorbs the cost appreciating the new content.  Given the variety of content, from sports, news, shopping, entertainment, educational, religious and other programming, do consumers get the value from the variety of channels pushed by media companies?  While some households are offended by cutting edge programming from Comedy Central, surely religious programming is not prime viewing in others. 

FCC Chairman Kevin Martin recently embraced the concept of a la carte programming in statements made recently before the Senate Committee on Commerce, Science and Transportation.  He comes from the position that consumers seeking family friendly programming are forced to buy family unfriendly programming in order to get what they want.

A la carte programming in theory would let consumers purchase only those channels in which they are interested.  An FCC report not yet made public indicates that per channel pricing could bring the cost to consumers down while letting them control what comes into their homes.  Cable and satellite operators claim otherwise, stating that fewer channels means fewer advertising dollars, which means cost per channel will go up. 

Telephone companies such as AT&T (the former SBC Communications) are primed for a la carte programming as they are reading their fiber networks for programming on demand.  Their complaint is that media content providers do not sell individual shows or channels.  Essentially, while the technology is there, the economics are apparently not there. 

Another question mark is that there are no reports, however, that gauge which channels might gain the most or least subscriptions.  Cable show rankings are not necessarily a good guide as ratings are fragmented somewhat by which demographics score higher with advertisers, and at what times. 

One good story that goes into more detail on this subject is at CNET News.  Read it here.

December 5, 2005 | Permalink

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Comments

I just bought satalite service and the low end package did not include 2 channels my children watch Animal Planet and discovery kids. I had to go up to the highest package bringing my bill up more than $20. It is a crime, I don't watch tv, only movies and I rent them. I will be very happy if the law is changed.

Posted by: Jim Nagy | Dec 29, 2005 3:45:10 PM

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