Cable Subscribers Sue For 'A La Carte' TV Options

[Suhit Gupta]

<div class='os_post_top_link'><a href='http://www.news.com/8301-10784_3-9782645-7.html' target='_blank'>http://www.news.com/8301-10784_3-9782645-7.html</a><br /><br /></div><i>"To all you cable and satellite subscribers who gripe about writing checks each month for the privilege of receiving dozens of channels you never watch, take note. A new lawsuit filed Thursday in federal court in Los Angeles charges that every major cable and satellite provider--and the entertainment conglomerates that feed them content--form a cartel that deprives consumers of choice and forces them to pay "inflated" prices for services that don't correspond to their desires. The suit, brought on behalf of cable subscribers in several states, calls for unspecified damages and for a court to decree that consumers can buy channels individually, the Associated Press reported. The companies being targeted by the suit are NBC Universal, Viacom, Walt Disney, Fox Entertainment Group, Time Warner, Comcast, Cox Communications, DirecTV, Echostar Satellite, Charter Communications and Cablevision Systems, according to the AP."</i><br /><br /><img src="http://www.digitalmediathoughts.com/images/070611fd_sonyshopsaround.jpg" /><br /><br />I am often excited about the fact that I have almost 500 channels that I could tune to, all with one of my pretty basic cable package. Obviously, the number of channels you get grows rapidly as you opt for the more expensive gold and platinum packages. But honestly, I probably watch about a max of 20 channels. So I completely get why the a la carte option would be excellent. Having said this, suing cable companies? I already find my cable bill to be quite high. Going a la carte is only going to make it higher. And then suing cable companies is not going to give them any incentive to make things more convenient for their customers.

[hawkeye]

[i]"I already find my cable bill to be quite high. Going a la carte is only going to make it higher.

I agree with this point completely. Right now I get somewhere around 250 DirecTV and XM Radio channels for what works out to be $0.26 per channel. If I selected my channels A La Carte do you think ESPN would only be $0.26?

My family and I only need 3 dozen of these channels, and that's counting the channels we only tune in once or twice a month.

If the cable and satellite providers are forced to offer A La Carte rest assured they will do so in a way that makes them more money not less!!

[Tim Williamson]

But for people like me, who only watch 5 or 6 channels, this could possibly be a better plan. I would think ideally they would have two types of plans, the current pricing scheme where you get 200 channels for $50 (or whatever), then an ala carte option where each channel is $2/month (or something like that). This would allow flexibility for consumers, but the cable/satellite companies would still be able to make a profit.

[Damion Chaplin]

How about a plan where you pay a flat subscription rate for, say, 30 channels, but you get to pick which 30? I'd definitely go for that. My wife and I watch maybe 15 different channels. The others we like having access to, but are not ones that we tune into on a regular basis. Do we really need 3 MTVs, 2 BETs, 5 different shopping channels, 5 different sports channels and 5 different news channels? We sure don't. I'd gladly pay less (that's the key word there) to receive fewer channels, as long as they were the channels I didn't watch anyway...

To me, it doesn't matter whether I'm paying $.27 per channel or $2.70 per channel. What matters is if I have a $80 cable bill or a $40 one.

[Suhit Gupta]

This discussion got me thinking that if we did get an a la carte option, wouldn't that put a whole bunch of content provider companies, i.e. the companies that power the channels, out of business? There are a number of such channels that probably get money now only because of they get a tiny percentage of my cable bill; but with a la carte, I can see how that revenue stream of theirs may trickle down. No?

Suhit

[Felix Torres]

This discussion got me thinking that if we did get an a la carte option, wouldn't that put a whole bunch of content provider companies, i.e. the companies that power the channels, out of business? There are a number of such channels that probably get money now only because of they get a tiny percentage of my cable bill; but with a la carte, I can see how that revenue stream of theirs may trickle down. No?

Suhit

Correct.
That is one of the arguments that the cablecos use; that a lot of the specialty/narrowcasting channels would not draw enough subscribers to survive while the highly popular sites (ESPN) would be inclined to demand higher prices from the Cablecos.
Implied under the concept of ala carte channel subscriptions is variable channel pricing. You can't have one without the other. So, yes; you get to ditch the golf channel and home and garden channel if you want to, but be prepared to pay extra for ESPN, SciFi, and the other higher-audience channels. When the dust settles, the cablecos are going to get their money one way or another and so are the big content providers. The small ones that live off their "access to viewers" numbers, rather than actual proven viewers will be squeezed out.
The underling question is which scenario best serves the public interest? Subsidizing the narrowcasting channels or letting consumers choose the channels broadcast to their house? Cause the cost issue is most-likely a negative-sum game; any savings a consumer makes one place will be offset by bigger increases to other consumers.

Like all the hype over net neutrality this issue is more political than anything else. Cablecos let you block off any channels you don't want listed and you always have the option to not watch, after all.
Lots of smoke, little fire.

[Felix Torres]

How about a plan where you pay a flat subscription rate for, say, 30 channels, but you get to pick which 30?

Ah, but the thing is: all channels use the same bandwidth but not all chanels cost the cableco the same. Some channels are free to the cablecos, some they have to pay for.

So a system where you get any thirty channels would have to either have limitations (five from column A, five from column b, 20 from column C) or cost enough that if you load up only on expensive channels they still make money. Either way, it is doubtful you get any savings out of the deal.
Cablecos are monopolies; you don't win when fighting monopolies.
You want cheaper cable bills? Support IPTV. Just be careful; you'll be dealing with Telcos, then.