A belief shared by McCain's colleague across the aisle, Senator
Jay Rocefeller (D- VA)
"...rather
than being able to pick smaller packages or choose the channels they want,
consumers are still forced to purchase larger and larger packages of channels
no matter how few they actually watch. This says to me that the market isn't working."
The
Senate Commerce committee is scheduled to take up McCain's bill in a hearing on
Tuesday (5-14.)
McCain's assertion is based on a solid premise. Look at any cable or satellite TV provider
and you find that all their programming is bundled into packages or tiers. The only a la' carte options you have are for
the so-called premium stations like HBO or Showtime which by themselves can
cost an additional $10 a month or more and in some cases also come as part of a
bundle.
Gone are the days of $20/mo basic cable. A subscriber can easily find a bill of $50 or
more per month with no premium channels.
Add HBO and a few HD channels and that bill is closer to $125.
In the end you ultimately end up subsidizing channels you don't
watch. That's because providers
negotiate not with HBO or AMC but rather their parent companies like Viacom and
Time Warner. It's an all or nothing deal
that can cause a disagreement over licensing fees on one channel to affect a
dozen others. That's why a tiff
between a service like DirectTV and Viacom leaves subscribers with multiple blank
channels instead of content.
Cable industry lobbyists are against McCain's proposal
claiming it's a "lose-lose" for both customers and providers as evidenced
in an official statement from the National Cable and Telecommunications
Association.
"As countless
studies have demonstrated, subscription bundles offer a wider array of viewing
options, increased programming diversity and better value than per channel
options,"
Of
course that assumes that the "wider array" is something you actually
care to watch. Even if you don't, you're going to pay for it anyway and that's
the logic of their claimed "win-win."
This
is the rationale that's led to cord cutters who've turned primarily to online
media sources like NetFlix and Hulu.
Unfortunately, legitimate online sources still can only offer a fraction
of the content enjoyed by the traditional delivery model. Unless you've got an HBO subscription, for
example, you're not going to see "Game of Thrones" on the same day it
airs unless you turn to illegitimate sources.
That's
due to a reluctance of channel owners like Viacom to embrace online options
that would lead to greater consumer choice but a less predictable revenue
model. It's flawed logic, however.
If you're a cord cutter it's probably not of any great
consequence to you about what happens to
pay TV subscription rates but you're going to be affected all the same.
With online bellwethers like YouTube launching paid channels it may seem like online TV options are
poised to offer what traditional pay TV won't.
If the industry is forced into
the a la' carte model, however, online TV will soon end up looking like it's broadcast
predecessor.
You may be able to pick and choose from a few sources but likely
run headlong into the same bundling schemes as traditional pay TV. That's because the channels don't own the
content, their parent company does and it's up to them to decide how it gets
distributed.
Add in the more targeted paid online options and soon you'll
be paying as much if not more than if you'd never cut that cable. Lest we forget data caps imposed by most
Internet providers that could result in a nasty surprise in that bill if you
enjoy HD content.
In short, the old guard of broadcast television has nothing
to fear as one way or another we'll still end up paying more no matter how we
choose to view their content.
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