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Cable to Face Second 'Family' Act

Two legislators have proposed a bill that would require MSOs to offer family-friendly programming and looks to push Federal Communications Commission (FCC) Chairman Kevin Martin's desire to push an à la carte programming model on the cable industry.

The bill, introduced by Reps. Dan Lipinski (D-Ill.) and Jeff Fortenberry (R-Neb.), aims to give operators the choice to monitor programs using broadcast indecency standards, install a "real family tier" of programming, or use an à la carte approach that will allow customers to block out some programming and receive refunds for the programming they find undesirable.

Last year, Reps Lipinski and Tom Osborne (R-Neb.) introduced a similar set of legislation, but it did not gain any traction. The new legislation arrives in the wake of a decision by a U.S. appeals court earlier this month to toss out an FCC broadcast indecency ruling. (See Indecent Exposure.)

Martin, speaking at a press conference at the U.S. Capitol on Thursday, applauded cable and satellite TV providers for offering "high quality family friendly programming" from networks such as the Disney Channel, Discovery Channel, and ABC Family, "but parents should not have to buy channels with programs rated TV-MA to get these channels.

The cable industry, he added, "has not responded in a meaningful way. Our message today is very simple: no consumer should have to pay for content they do not wish to receive. Period."

Martin, meanwhile, continued to argue a position that à la carte would not only give consumers the choice they want but also drive down cable prices.

The cable industry, led by the National Cable & Telecommunications Association (NCTA) , was forced to go on the defensive again Thursday, reiterating a position that an à la carte model and forced mandates would turn the TV business upside down and be bad for consumers.

"Overwhelming evidence shows that a mandated a la carte regime would result in higher prices and less diversity in programming, overturning a video marketplace that provides U.S. consumers with the widest variety of programming found anywhere in the world," said NCTA VP of Communications Brian Dietz, in a statement.

He added that such a mandate is unnecessary, given that consumers already have access to parental controls through cable set-tops and the V-chip, which controls content by time, show, network, and rating.

A survey conducted by Forrester Research Inc. recently found that only 53 percent of consumers would be interested in getting cable programming on an à la carte basis, and that people who would find it appealing are somewhat confused about the potential value of such a programming model. (See Survey: à la Carte Value Vexes Consumers.)

— Jeff Baumgartner, Site Editor, Cable Digital News

optodoofus 12/5/2012 | 3:06:49 PM
re: Cable to Face Second 'Family' Act > survey conducted by Forrester Research Inc.
> recently found that only 53 percent of consumers
> would be interested in getting cable programming
> on an +á la carte basis, and that people who
> would find it appealing are somewhat confused
> about the potential value of such a programming
> model.

I am somewhat dubious of these survey results. The way you structure the question can manipulate how the results come out. Please tell us who funded the survey, and then I'll decide if the results are meaningful.

Also, I find it perplexing that anyone could be confused about the value of only paying for the channels they watch. I watch about 10 channels but have to buy about 300 to get the 10 I want. Seems pretty cut-and-dried to me.

optodoofus
Jeff Baumgartner 12/5/2012 | 3:06:47 PM
re: Cable to Face Second 'Family' Act I've sent a note to Forrester to see if they can shed some light on who commissioned it, so i'll keep you posted. Perhaps you're just smarter than the average bear, but I think one point the study tried to point out was the perception on the value of programming...and how much they'd be willing to pay.

Jeff Baumgartner 12/5/2012 | 3:06:46 PM
re: Cable to Face Second 'Family' Act Update: Direct word from Forrester is that the survey was not commissioned by anyone, but part of its own syndicated product. There you go.
fgoldstein 12/5/2012 | 3:06:45 PM
re: Cable to Face Second 'Family' Act A la carte is complete BS.

There's no marginal cost of letting a cable company carry a channel. Every channel has a fixed cost to cover. Right now, the norm is for obscure channels to be very cheap to carry, and they're bundled into tiers. So you get The Lacrosse Channel and Lithuanian Oom-Pah TV as part of your digital tier. This lets the cable company sell lots of channels cheaply. It lets new channels get carriage, hoping to get discovered.

A la carte would require users to pay for each channel, so they'd take far fewer. The channels would need the same money to produce programming, though, so they'd raise their per-subscriber prices. Voila -- get less for your money! Such a deal. This is BabyFace K-Mart's way of punishing cable for the sin of competing with ILECs, and a way for the religious right wing to namby-pambyize cable so that it ends up as bad as broadcast TV or their preachervision channels.
rjmcmahon 12/5/2012 | 3:06:44 PM
re: Cable to Face Second 'Family' Act I'd agree that a la carte could shift program funding from advertiser to subscriber though don't know if that's a bad thing or not. Maybe direct and differentiated price signals could lead to better products?

Also, here is a sample point for a la carte pricing

http://www.callnps.com/alacart...
rjmcmahon 12/5/2012 | 3:06:44 PM
re: Cable to Face Second 'Family' Act I'll pay more for each channel in order not to subsidize the crap.

I think this is a bit of a fallacy. The entity subsidizing the crap is the advertiser. Bundling allows national advertisers to reach their audiences no matter what channel we are watching. A la carte would mean that the *advertiser* wouldn't be as willing to subsidize the crap and hence we'd likely pay more for less as the commerce engine subsidy is weaned from us.
willieoshady 12/5/2012 | 3:06:44 PM
re: Cable to Face Second 'Family' Act Two points to this,

1) It would not be fair to enact this legislation on Cable w/o giving all consumers this option... ie, DBS... Good luck on that!

2) I think the Idea that ala carte won't work is naive at best. It will work ala carte or in the current method.

Ala carte would result in fewer channels, which would mean fewer bills and fewer junk on your tv. It would also make sports channels un-screw their costing (did you know ESPN is about 3x more expensive then the next nearest competitor?)

If I don't want ESPN, and just want 10 channels, my bill is much lower. Now, this results in fewer revenues for CableCos, but my bet is that when customers realize "they can save allot of money on TV", they'd drop the dish and subscribe to their 10 channels. My bet is that if DBS couldn't offer a similar Ala Carte type package they'll be out of business in 10 years. Cost dominates the TV Space, it is Dish' biggest selling point.

Then, you dont have all the trash channels, which have a low take rate but screw up things like switched digital if one person is watching each channel. Then, you pump these low cost channels to You Tube, where they'll probably get more Ad revenue since the Ad is guaranteed to be seen when it is streamed (vice tivo'd over). (I got your back, MG) :).

That way the .001% that watches the lacrosse channel still gets to, I get cheaper bill, not only because I don't want the junky cheap channels, but I actually dont want the junky expensive channels, either.

Whether this is best? I could care less, flesh it out and get back to me. I'm not watching the junk channels anyway.

Seems ala carte worked quite well for HBO, Showtime, etc. They continue to expand programming.

Cartoon Network, Noggin, Comedy Central, Nick, Whatever Channel my wifes shows are on, Showtime, Discovery. I'll pay more for each channel in order not to subsidize the crap.
mojorising 12/5/2012 | 3:06:42 PM
re: Cable to Face Second 'Family' Act Ala catre is a great idea. Let's expand it to software, another zero marginal cost industry.

I don't use all the code in my XP OS. Can I just pay for the percentage of code I am using, and not subsidizing the rest? Shouldn't the cost to all of us be much lower? Seems like the same logic.
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