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Study: A La Carte Would Kill Jobs, Cost Industry Billions
by Karl Bode 12:15PM Tuesday Dec 10 2013
Calculating the impact of shifting an entire industry to an a la carte TV pricing model is probably impossible, but that doesn't stop investment analysts Needham and Co. from trying. "Our calculations conclude that $80 billion to $113 billion of U.S. consumer value would be destroyed by this shrinking channel choice," the firm tells the Los Angeles Times.

The firm previously claimed that more than 1 million jobs would be lost as a la carte kills off smaller niche channels -- a number they've since bumped to 1.4 million in this latest report. The firm also estimates that $45 billion in TV advertising would evaporate as 124 smaller channels died:
The Needham report estimates that it costs media companies an average of $280 million annually to run an entertainment cable channel. (The costs to program a sports channel -- with big-ticket sports -- are much higher). That means a channel requires at least 165,000 viewers over the course of a year to break even. "By implication, about 56 channels would survive, and 124 channels would disappear, based on 2012 viewing levels," Martin wrote.
The study is only available if you pay for it, and the Times doesn't seem too interested in asking other sources to fact check any of these numbers. Granted Needham and Co. doesn't estimate the job losses from the cable industry's efforts to keep innovative new video solutions from market, nor does it really analyze the consumer price impact of allowing a clearly broken TV pricing model to continue as is.

In fact, Needham doesn't appear to give much if any thought to the reality that entrenched legacy industries always suffer losses as the technological ground shifts beneath their feet -- especially if they're too slow to fully adapt to the new market and emerging competitors.

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East Amherst, NY

2 recommendations

reply to axiomatic

Re: 124 channels would disappear?

Well typical BS because the entire market is dominated by pea brains.

1. Prices will go down across the board, so jobs displaced is efficiency gained in MY pocket. I pay enough to taxes, I don't need to support inefficient outdated paleolithic-era models.
2. There is nothing stopping puff daddy's channel by going OTT or any other one and streaming on the internet and charging. In fact ad models would become better, not worse.
3. This model already works today. Blaze.tv (GB) charges $10 a month, and he is WAY more profitable than ever. He produces out of his own studios, meaning more $$$ to him. This is the wave of the future.
4. We will need the "man". With a dirth, will need curators. There will be markets for this.

Breaking up the cartels (as they are called), will make it better for everyone. That would force say A&E to improve the quality of Duck Dynasty or it goes away (not that I am a fan or should even pay for it).

Reruns, useless fillers, 40% commercials all go away. It's all on demand, when you want it.

Already our family is no 90% broadcast or OTT (Netflix, etc). Only 10% of the viewing comes from those 200 channels of fattening fillers. To me, they can't be "rightsized" soon enough.

That will free up bandwidth for valuable services, like the internet. Enough said.

Jason Levine

7 recommendations

Cognitive Dissonance

A La Carte would kill 1.4 million jobs. And this sack of kittens for some reason. Do you WANT these kittens to die? Look at how cute they are! Now send more money to the cable companies before these kittens are killed by your insistence on only paying for what you watch.

In unrelated news, the cable companies have declared that a "one price for all" model for Internet access is untenable and they need to charge based on what you use since that makes more sense.

In more unrelated news, cable executives had anti-cognitive dissonance chips installed in their brains to keep their heads from exploding.
-Jason Levine



15 recommendations

"Let them die!" -- Captain Kirk

If going à-la-carte will cause that much hardship in the television industry, then it never was a real industry at all. Instead, it's a monumental corporate welfare scam backed by poor programming, lack of choice and massive price rigging.

Don't be a victim of this scam. Demand à-la-carte, or cut the cord. Worthy channels will survive. Worthless channels must die!


Tuscaloosa, AL

9 recommendations

I don't care

No offense to the people working for these companies, but I really don't care. I don't want these channels, and I don't want to pay for them. If that cuts into the bottom line, causes job loss, etc., that's not my problem. Give me content I want, and I'll consider paying for it. Otherwise, find some other way to make money.