Cable TV -- Cafeteria Style

Published on June 11, 2005 By Common Sensei In Misc

I haven't had cable television since the mid-90s. At the time, I was paying $40 or so a month and only watching 3-4 of the channels offered. I liked the Discovery Channel, I liked the History Channel, and I liked Comedy Central, but I'd rather be eaten by army ants than have to watch the Golf Channel, HGTV, or TBS. The way cable television works, it's like going to a cafeteria and having to pay for every single entree on the line when you're only going to eat a few things.

My dad has his digital satellite, and he's got the same story. $60 a month, and he'll never watch MTV or MTV2. He'll never watch VH1 or BET -- but he pays for them because he loves his ESPN channels. He's got 30 channels of music that he never touches.

I'd be happy to pay for television by the channel. Charge me a certain fee per month for the channels I want -- Animal Planet, Discovery, History, National Geographic Channel, Comedy Central -- hell, make me even HAVE to pay for my local network affiliates just to keep them happy, that would be fair if I didn't have to waste time with Spike TV or Fox News.

Ultimately, this will never happen, though. Small niche channels could never survive in a freedom of choice atmosphere -- but they can survive when thrown in with the big boys that everybody wants. Hmmm...the Social Darwinsim of cable TV? Might be an interesting process. Just don't make me watch E!

Comments

MasonM

on Jun 11, 2005

Actually ala carte programming choices are becoming more popular in larger markets, and will likely become the norm eventually. In the past the technology just wasn't there to make it practical or affordable. The improvements made in the areas of digital television processing is making it easier and cheaper all the time.

There are also local franchise agreements made between the cable operators and the local governments. these quite often dictate not only where service must be provided, but what programming must be made available. I worked in the cable industry for over 12 years and these franchise agreements are a royal pain for the cable operators and more often than not result in higher fees to the subscribers in order to meet the terms of the agreements. Quite often little towns and counties will demand franchise fees from the operators in order to provide service in their areas. These fees are, of course, passed on to the subscribers.

Another consideration is that most of the programming provided costs the cable operator money to carry it. The fees charged to the operator are based upon the number of subscribers in the area served. With past technology it was far more cost effective to have programming broken into blocks that subscribers could choose from that ala carte channels.

The provider often has to pay for the channels whether anyone is actually subscribing to them or not (exceptions being premiums like HBO) so they may as well just put them on.

Sorry for the long winded answer, but this is something I was asked a lot when I was a manager in the industry.

Common Sensei

on Jun 11, 2005

Sorry for the long winded answer

Don't be, you've taught me a thing or three!

bakerstreet

on Jun 11, 2005

I can see MasonM's point, but I wonder how many struggling cable channels fail because they are packaged with all the others people don't want to pay for. I hate the idea that "extras" channels suffer just because I don't want to pay for 90% dross.

Common Sensei

on Jun 11, 2005

Yeah, the whole thing seems a lot more complex than I had originally thought...

MasonM

on Jun 11, 2005

As most broadcasters receive the bulk of their revenue from advertisers, few fail due to how they are bundled on a particular cable system. Many in fact have some say in how they are delivered locally. They even have the option of reducing or waiving the cable operator's fees in order to be carried as part of the "basic" package.

In my experience with the industry, if there is a channel someone really wants to have they will pay for the extended block, or "tier" of programming in order to receive it if it isn't a part of their basic package.

More often than not a station will fail due to a simple lack of interest or lack of quality programming. But it is surprising that few actually do fail.

Cable service is a product just like any other. While some people view it as a necessity, it is really a luxury item. Cable operators know this and try to put together programming packages that are perceived to provide value in order to encourage people to buy it.

For this reason, I see the ala carte programming option to become the norm as systems are upgraded to newer technology. People like having choices. I see a basic programming package much like we have now, delivered digitally, with the consumer able to select additional channels ala carte to round out their programming tastes.

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