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New Less Bang for the Programming Buck - 18-April-2008, 15:40

Less Bang for the Programming Buck

It was a rather gutsy move by programmers earlier this week telling Federal Communications Commission Chairman Kevin Martin that his a la carte proposals would be disastrous for their business and for consumers.

It doesn't come as much of a shock that programmers would defend their long-established turf in the programming arena from any threat to dismantle their decades-old business plan for reaching consumers. Yet a letter blasting a la carte that was sent Tuesday to Martin - and signed by executives from ESPN and Disney-ABC, Fox, MTV Networks and others - hardly offered any substantive ideas that could sway a la carte's staunch defenders to their side of the debate.

An argument in the letter that stuck out like a sore thumb was the line that the "most successful and most watched programs and networks - typically those that invest the most in quality programming -would be penalized for their popularity to the detriment of consumers" under an a la carte regime.

Programmers compete for space on a basic tier of programming. And they do it by delivering compelling content that costs a lot of money to produce. Yet that argument - competing for eyeballs with content consumers want - could work just as well in an a la carte world. Let the consumer decide what channels are the winners or the losers.

There were other weak arguments in the letter to Martin. Still, the correspondence sent to the Portals leader did touch on the one item that demonstrates why a la carte would be a dead-end for the pay-TV business.

And it's an economic argument.

If a la carte programming came to fruition, consumers would have fewer channel options and probably pay just as much - if not more - for their selection of content. Think ESPN would sell for $2.80 a month on a standalone basis? Think again. Would MTV be available as a single channel for a buck a month? Not likely.

Programmers would have to make up the monetary difference from the audience they would lose under an a la carte regime. Yep, consumers today may be subsidizing the programming watched by other viewers. But it's better than paying more than $10 a month for access to a sports network.

The letter from the leading programmers stated that "consumers will be outraged" if a la carte becomes reality. The document should've put more emphasis on the key money point that consumers would be outraged if they were getting less bang for their programming buck with an a la carte mandate.
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