Survey Says: 92% of Consumers Want A La Carte

4/18/2012 10:25 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 one-third the average monthly multichannel 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 affiliate revenues shrink is probably not something any programmer would want to participate in," RBC added.

Want to read more stories like this?
Get our Free Newsletter Here!