New Less Bang for the Programming Buck -
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.