Dauman: A La Carte Not the Answer

Viacom Chief Says People ‘Fundamentally Rational’ When Given Facts

Viacom CEO Philippe Dauman told an industry audience Tuesday that proposals to bring a la carte programming to consumers will not lower content costs.

“When you really sit down and explain to legislators or regulators what would happen in a so-called a la carte world, it’s not good for consumers,” Dauman said at the Goldman Sachs Communacopia conference in New York. “The system as it exists allows a lot of choice for a reasonable price. The price to pick networks that you think you want now would go up in an a la carte world. People are fundamentally rational once you talk to them. I expect that everything that will unfold will be done in the commercial marketplace, not regulated by Washington.”

 The cry for a la carte offerings has grown louder in the wake of several high-profile retransmission consent blackouts – the latest a month-long dispute between Time Warner Cable and CBS was resolved on Sept. 2. Earlier this year U.S. Sen. John McCain (R – Ariz.) reopened the debate by introducing a bill that would allow consumers to pay for the channels they want to watch.

Distributors have added their voices to the debate and have also called for regulators to stop the practice of bundling channels as part of carriage agreements. Earlier this year Cablevision sued Viacom for the practice, claiming the programmer forces consumers to pay for a growing number of channels they don’t watch to get access to the few they do.

Dauman didn’t want to comment specifically on the Cablevision suit, except to say that the believes it doesn’t have. He added that distributors do have the option of carrying fewer channels for a higher price.

“There is always room for negotiation,” he said. “We do have distributors out there who will pay a higher rate for fewer channels, but most of them find it a better buy for them and their customers to have a broader array at the discount you get when you take a broader offering.” 

Dauman was also unconcerned about fears that further consolidation on the cable front could lead to lower prices for programmers. One of the catalysts for consolidation is the idea that added scale would mean lower programming costs.

“We’ve had a lot of cable consolidation in the past – this is nothing new – and we’ve grown and we’ve thrived,” Dauman said. “What’s important for us is to create great content and build our brands and we’ll do just fine. “