Multichannel News today reported that the chief economist for the FCC spoke out in favor of a la carte programming, something the cable industry has resisted for years. A la carte programming would allow consumers to select and pay for only those channels they want, rather than the bundles now offered by cable companies.
The article states, “Why should you have to pay for channels that you are blocking?” FCC chief economist Leslie Marx said in remarks here at the Cato Institute, a libertarian think tank. "The FCC has looked into the issue of providing consumers with more choice and has found that a la carte and other means for increasing consumer choice could benefit consumers.”
For years, cable providers (like Comcast) have argued that without bundling channels, consumers would have fewer choices and actually pay more for fewer channels. The argument (and it does hold water) is that by charging thousands of households just a few pennies each month for most channels, the volume allows smaller, niche channels to operate. If you ask just a few households to bear the cost of a channel (something that a small number of people watch, like channels for specific sports or ethnic channels), consumers would pay more per channel, get fewer channel choices and perhaps even pay higher overall cable bills.
Enter high-speed Internet access, iTunes (and other) video and YouTube. Talking about which channels to get is almost old news -- it's down to which shows you wish to get.
With more than 65 percent of U.S. households enjoying high-speed Internet, a number of paradigms are shifting in the way we watch "TV." For example:
- Tivo and Video-on-Demand are enabling us to watch many shows when we want to, not when they're on.
- iTunes, Video iPods and other options are allowing us to watch our favorite shows on the bus, while waiting for the doctor or anywhere else. Rather than bringing the computer to the living room, we're bringing television to our pockets.
- Services like Vongo and CinemaNow allow you to watch movies legally online. In Vongo's case, it's much like having a premium cable channel, but you don't need cable.
It's looking more and more like fighting a la carte is a battle the cable companies can't win, not because it doesn't make sense, but because other options in the open marketplace will force them to change their model or lose share.
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