In an ideal world, television viewers would only pay for those shows and channels that they actually care about. The concept, known as TV a la carte, has been a pipe dream of cord cutters and disgruntled cable subscribers for years. Thursday the movement received a significant boost from an unlikely political ally: John McCain.
The Arizona Senator introduced a new bill, the Television Consumer Freedom Act, that would present incentives to both cable operators and television networks to let consumers choose the channels in their subscription. Right now, all customers pay substantial “carriage fees” for the most popular channels—ESPN is pegged at about $5 per subscriber—whether they want them or not.
The biggest change would come in the way networks sell their channels to cable operators. Right now, media companies like Disney and Viacom sell their channels in bundles, forcing operators to pay for third-tier networks in order to get access to ESPN or Nickelodeon. Cablevision is currently suing Viacom for the practice.
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McCain’s bill would force the networks to unbundle their products, theoretically allowing cable operators to be more thoughtful in their channel selection and pass the savings on to consumers. In the past, though, television networks have argued that bundling channels allows niche programming to exist when it would otherwise be economically unfeasible.
The bill “is about giving the consumer more choices when watching television,” McCain said on the Senate floor. “It’s time for us to help shift the landscape to benefit television consumers.”
While the bill requires networks to unbundle their channels, it only encourages cable operators to offer consumers a similar luxury. Cable companies that refuse to offer channels individually would lose out on a special compulsory copyright license which allows them to air content from broadcast networks for a set fee without getting tangled up in individual channel negotiations, as they do with cable networks.
In another potential blow to the broadcast giants, the bill also gives them less leverage against controversial startup Aereo, a streaming service that digitizes the over-the-air signals of the broadcast networks without paying them. In April, a Fox executive threatened to pull the channel off the broadcast airwaves if Aereo was not shut down by the courts, but McCain’s bill would revoke a network’s broadcast license if it offered different content for cable subscribers and viewers receiving over-the-air signals.
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With clauses aimed at both television networks and cable and satellite operators, the bill isn’t likely to find many supporters in the traditional television industry. Despite very public spats between these entities when they negotiate carriage fees, the two sides have created a highly lucrative relationship based on the idea of selling consumers more content than they need. “I’d be surprised if this thing isn’t opposed by a lot of very strong forces,” says Harry Cole, a communications lawyer at Fletcher, Heald and Hildreth.
There’s also nothing in the bill that explicitly obligates cable companies to make their a la carte pricing affordable. In the same way that they make cable and Internet bundles more financially appealing than buying the two services separately, operators might choose to make individual channels so pricey that consumers stick to bundles anyway.
The TV a la carte movement might have more success in the online space. The niche programs that networks lament would be squeezed out in a cable shakeup are already staking out ground online, with everyone from Netflix to Amazon to Microsoft investing in original content. Aereo, which launched in New York last fall, is expanding to Boston next week. Meanwhile, Google’s YouTube announced Thursday the introduction of a pay service where people pay as little as $0.99 per month to subscribe to individual channels.
“This bill is being drafted against the backdrop of technology which is accelerating rapidly every day,” Cole says. “At no point is the development of video distribution technology going to stop long enough for John McCain or anybody else to come up with the ideal language that will best serve all interests.”