Most consumers like the idea of pay per channel cable TV, in which the customer would select a la carte the channels he actually watches, rather than pay for a bundled service with dozens, sometimes hundreds, of channels that are quickly skipped past with the clicker. Cable providers obviously prefer selling channels in bundles, ensuring a steady and sizeable amount is paid by each customer, each and every month. At some point, though, it looks like the cable companies will begrudgingly have to give consumers what they want.
Why pay for services you don’t want, and don’t use? In terms of cable or satellite TV, the answer is that there really has never been an option to pay strictly for the services—meaning channels—you do want, and do use.
The concept of a la carte or pay per channel cable is not new. The FCC and several prominent government officials were trying to push the cable companies to offer channels a la carte in the mid-’00s, and the topic has been regularly revisited by the likes of Wired.
What with record numbers of subscribers canceling cable and satellite TV service, surveys showing that 77% of young people would live without TV before they’d live without the Internet, and consumers who are increasingly accustomed to picking and choosing exactly what they want and nothing more—buying one MP3 rather than a whole album—the concept isn’t going away anytime soon. You don’t have to be the savviest of consumers to understand that when you only want a Big Mac, buying a “value” meal with fries and a drink isn’t much of a value.
David Lazarus’s column in the Los Angeles Times makes the case that pay per channel cable would not only be welcomed by consumers, but that it could be the only means for cable providers to save their business before the Internet takes over in entirety:
Before cable providers give themselves over to becoming little more than turbocharged Internet service providers, there’s an opportunity to remake themselves in the iTunes mold and give video subscribers exactly what they want.
That is, cable companies could charge people for only the channels they watch, rather than the hundreds that they don’t.
Not everyone agrees with this assessment, though. Surely, price-per-channel costs would rise under an a la carte system, just like at the restaurant where you’ll pay less per item at the buffet than you would by ordering off the menu a la carte. Some critics of the pay per channel concept say, however, that few, if any, customers would see any savings. The New Yorker’s James Surowiecki, for one, envisions the scenario playing out this way:
The prices for individual channels would soar, and the providers, who wouldn’t be facing any more competition than before, would tweak prices, perhaps on a customer-by-customer basis, to maintain their revenue. That doesn’t necessarily mean that Bravo would suddenly cost fifteen dollars a month, but there’s little evidence to suggest that à-la-carte packages would be generally cheaper than the current bundles.
Well, certainly it’d be cheaper for some customers. Even if the price per channel increases in an a la carte system, most consumers would still welcome having the power to decide just how much each channel is worth to them. There wouldn’t seem to be any reason why customers couldn’t still also have the option of going with any of the current bundled package of channels if they feel a la carte isn’t right for them. Or perhaps the cable providers could offer some sort of escalating discount for a la carte customers, with savings of 10% or 20% when more than 20 or 30 channels are selected.
Lazarus suggests this possibility:
How about offering a base plan of, say, 30 or 40 cable and local channels, and then allow subscribers to add additional channels on an a la carte basis?
In any event, cable TV would certainly seem like a better value if the customer actually had more genuine choices than the current options, which basically amount to selecting among bundles in small, medium, and large varieties. If cable companies seek to attract new customers and stop current ones from canceling, simply sticking with the status quo—throwing five Spanish-language channels, three home-shopping networks, and a couple of religious channels at customers who have no interest in any of this programming—doesn’t seem like a wise choice.