Cable Operators

Study: 92% Want A La Carte — for Cheap

4/23/2012 12:01 AM Eastern

About 92% of consumers want some type of a
la carte programming offering from their multichannel service
providers, but they’re not willing to pay much for it, according
to a recent RBC
Capital Markets survey.

RBC Capital conducted
a proprietary
survey of more than
1,000 consumers, asking
them a variety of
questions about their
multichannel desires.
About 92% of respondents
said they would
be at least “somewhat
likely” to switch to a
full a la carte option,
with 82% saying they
would subscribe to at
least 11 channels and
40% claiming they
would subscribe to
more than 20 channels,
with a weighted
average of about 19
channels. Of those respondents,
about 51%
said they would pay at
least $1 per month per channel in an a la carte world, with
the weighted average being $1.47 per month.

That works out to about $28.50 per month, or about a
third of the average monthly multichannel-TV bill.

RBC Capital’s conclusion? A la carte works for the
consumer, but not so much for the programmer and the
operator.

According to RBC, if all 100 million multichannel TV
homes switched to an a la carte service at $28.50 per month,
the industry would generate about $34 billion in total revenue,
or about the same amount that pay TV operators paid
programmers in affiliate fees alone in 2011. Estimating that
about 50% of video
revenue goes to
pay affiliate fees,
and programmers
would be left with
about $17 billion, or
half what they received
in 2011, according
to RBC.

While some channels
could benefit
from a la carte — especially
those that
are receiving substantially
less than
$1.50 per month per
subscriber in affiliate
fees — “a scenario
in which total industry
affi liate revenues
shrink is probably
not something any
programmer would
want to participate
in,” RBC added.

September
October