John Skipper of ESPN and Brian Roberts of Comcast made headlines some weeks ago saying, once again, that pay TV a la carte won’t work. Why continue talking about a la carte? My cable company, MCTV in Massillon, Ohio, surely isn’t. I learned my lesson long ago: Content companies simply won’t allow a la carte choice for consumers to happen.
Skipper’s and Roberts’s message to consumers is clear: Take the big bundle or take a hike. I find this attitude troubling because it assumes there is no middle ground between the channel-inflated expanded- basic tier and pure a la carte. A reasonable compromise must exist.
I say stop talking about a la carte and begin discussing other options for consumer choice that preserve programmers’ ability to control their brands and content. Comcast’s Roberts, perhaps unintentionally, may have floated an idea when he dismissed cable a la carte by saying, “You can’t just buy the sports section of The New York Times. You take the whole paper.” (PBS, Sept. 25)
In my view, Roberts’s newspaper analogy is really the kernel of another option : Treat content bundles like newspapers. The similarities are close. Newspapers are made of sections, and Roberts accurately states you can’t buy any section separately. Bundles from ESPN/Disney or Comcast/NBCU are very similar. Bundles are made of networks. And, as MVPDs know, you can’t really buy a sports or kids network individually. You have to buy the whole bundle, just like a newspaper.
Continuing the analogy, if content bundles are like newspapers, then MVPDs are like newsstands. A newsstand operator must sell newspapers at a price the newspaper sets, without breaking them apart. Here the similarity ends. An MVPD, unlike a newsstand operator, must require every customer to buy competing bundles or they can buy none.
That would be like The New York Times and The Washington Post each requiring every newsstand to stretch-wrap the papers together and sell them as a single product. The price of these “bundled” newspapers would be less than the cost of the two separately, arguably a value. Unless, of course, you want to read only one paper. Making consumers buy the whole paper to read one section makes sense, but forcing them to buy two newspapers when they want just one is preposterous. But, that’s standard business practice in today’s pay TV world.
Let’s try something different — consider “a la bundle.” Under this proposal, each content company would be able to keep its own bundle together and determine its cost (just like a newspaper). Popular networks in the bundle would subsidize their lesser-viewed brethren . MVPDs would be able to offer them with no requirement to combine them with competing bundles (just like a newsstand). Content owners would set a price for their content bundle and MVPDs would sell it at the price they set. Consumers would be able to judge the content, compare the costs and decide issues about value.
So, let’s stop talking about a la carte. Instead, let’s talk about a la bundle before consumers do take a hike.
Robert Gessner is CEO of MCTV in Massillon, Ohio.