Over the years the broadcast and cable industries have fought tooth and nail against not only offering a la carte (buying individual channels instead of bundles) pricing, but any
variation from the current tactic of bundling a massive number of channels. You might recall that the industry offered two primary excuses for why it was simply impossible
to offer a la carte pricing:1
: Smaller, more niche channels won't survive!2
: Offering consumer channel choice will raise everybody's TV rates!
Those justifications effectively stopped what at one point was a pretty deafening clamor for more channel pricing options. Several years later and both of those things are happening anyway
. Prices have soared relentlessly to insane new heights, and now we're starting to see niche channels like Ovation being dropped from cable lineups
(because, well, ESPN).
With a few people realizing (some six years later) some of those excuses against a la carte don't hold water, we seem to be seeing a renewed push toward some kind of channel pricing shift, be it a la carte or smaller channel bundles. Leading that shift in a minor way has been Verizon, who recently made a small concession in this direction by offering users a channel bundle without Sports
for a little less money. It's mind-numbingly absurd that it's 2013 and we're only just starting to see minor changes to the channel bundling model.
Verizon CEO Lowell McAdam spoke this week at the NAB trade show in Las Vegas, and one of the subjects touched upon was the fact that the cable industry really should be open to a la carte pricing
, especially as cord cutting gains momentum:
McAdam said a move to a-la-carte would answer market pressures and customer feedback. Through its FiOS TV service, he said, Verizon can monitor how many of its 5 million TV subscribers are watching any channel at a given moment. “It might be in the hundreds,” he said. “I think there’s a pressure now from customers about why do I have to have 300 channels?”
He called a-la-carte "a novel way that could help protect subscriptions in the long run.
This isn't a cause celebre for us but I think it’s an early warning that we should pay attention to."
McAdam deserves praise for not only being open to new pricing ideas, but for breaking the TV/broadcast executive trend of trying to ignore cord cutting in the hopes it will magically go away, and they can just keep legacy business models in place forever
in the face of broadband video. Still, by noting this "isn't a cause celebre," McAdam means he won't be pushing too
hard to make this happen since hey, everybody is making money hand over fist with the current expensive and dysfunctional status quo, and his hands are somewhat tied by broadcasters.
All of that said, it remains absurd that we're not really seeing any
creativity in pricing from most providers. Consumers are simply begging cable for lower rates, and even analysts that traditionally spend their days fluffing cable industry stock agree that the relentless rate hikes are not sustainable
. Make sports fans pay for their sports programming and let niche channels flee to services like YouTube's upcoming subscription service
(something that would certainly help push Internet video forward). Some kind of bundle flexibility is long, long overdue.
The biggest problem is right now, most people remain numbly content with paying an arm and a leg for hundreds of channels of crap reality programming, and until that changes on a larger scale -- nothing changes.