News

Time To Break Up the Buffet

2/13/2010 12:00 AM Eastern

What Kevin Martin couldn’t accomplish with his FCC gavel, programmers and cable operators might make happen with their fee fights.

Martin wanted cable to offer “a la carte” menus that let consumers pick and choose the channels they want to watch. He tried to make it happen via the approval power the Federal Communications Commission had over the Adelphia Communications sale to Comcast and Time Warner Cable.

It didn’t work, and it’s unclear that consumers really want a full a la carte menu. That would mean the networks they want to watch soar in price, and they’d lose the ability to watch some channels they don’t sample now but might in the future.

Signs are there, though, the “all you can eat” buffet served by cable and satellite operators is getting too big and too costly.

Every time a channel like HGTV or Food Network goes off a cable system amid lots of press, and the numbers start flying — are they worth 75 cents together or 25 cents? — consumers start wondering when they will have a say in this price equation.

When a distributor and a big broadcast network, like Time Warner Cable and Fox, talk about losing American Idol and several cable networks, too, in a fight over whether Fox is worth $1 a subscriber, consumers start wondering when they can vote with their pocketbooks.

Articles have started to appear, including in The Wall Street Journal, about whether these menus need to be broken down into groups. TWC CEO Glenn Britt got a lot of traction making that point, saying consumers want more choices.

Wall Street analysts like Craig Moffett point out that cable operators’ profitability would rise if they got out of the programming business altogether.

On our Web site (Multichannel.com), every time we post a story from a Scripps or a Disney or a Discovery talking about how they’re getting paid more — or want to get paid more or expect to get paid more — for their programming, the comments from readers pile up about how the model must change. One such comment, after a Scripps story last week, was from a reader who called for “some medium between the existing model and a la carte programmers which the industry fears.”

I agree and I think it’s inevitable — for cable and satellite: Check out the battle between DirecTV and Dish over a Dish ad that claims its smaller bundle is a better value than DirecTV’s bigger bundle.

Otherwise, as that reader said, Congress will act.

March