# Talk Heats Up Concerning a la Carte



## Chris Blount (Jun 22, 2001)

It appears battle lines are being drawn concerning the issue of a la carte.

On Wednesday, the Consumers Union praised what it called bipartisan efforts to promote choice for cable/satellite programming and a request by lawmakers for regulators to study a la carte. The support from the consumer organization came after members of the House Energy and Commerce Committee requested a report from the Federal Communications Commission on cable and satellite "a la carte" channel selection for consumers.

"We are pleased that Congress has listened to the overwhelming public outcry against cable rate increases and requirements that consumers purchase channels they do not want or that they find objectionable," said Gene Kimmelman, senior director for advocacy and public policy at the Consumers Union. "We are confident that once the FCC looks past industry innuendo and unsubstantiated assertions to find the real facts about the benefits of allowing consumers to select and pay for their own channels, cable and satellite carriers will no longer be able to resist public pressure to offer such options."

Meanwhile, the Congressional Black Caucus has been circulating a letter on Capitol Hill addressing its concerns with a la carte, saying any move towards program choice will reduce programming diversity as well as increase program costs for the consumer.

The letter pointed to new network launches - African American-oriented TV One and ESPN Deportes - and suggested those channels and others would have difficultly obtaining carriage in an a la carte regime. "If an a la carte system were to become reality today these channels and many others that offer diversity to the viewing public would be in great jeopardy," the Caucus letter said.

In another development, Joe Barton, a Texas Republican and chair of the House Energy and Commerce Committee, sent a letter to FCC Chairman Michael Powell asking the commission to review a la carte issues. He asked the FCC to issue a report on program choice and send it to the committee by Nov. 18.

Rep. Nathan Deal, a Georgia Republican and member of the House Energy and Commerce Committee, has been at the center of the a la carte debate. Deal had proposed - then pulled - an amendment tied to key satellite TV legislation concerning program choice.

http://www.skyreport.com (Used with permission)


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## Nick (Apr 23, 2002)

I'm changing my mind on ala carte. 

I think it would eventually kill off the niche channels that some of us watch, but not in numbers sufficient to financially sustain them. What we would have then is a bunch of numbnuts watching rasslin', Springer-esque garbage and ET. The quality programming of the Discoverys, NGC, Bravo, etc. could eventually go away. Also, I anticipate that the same channels we now have in packages would be significantly higher in cost as ala cartes.

I say keep the tiers, watch what you want, and be content in the knowledge that, as such, you are supporting a greater variety of programming. 

It's the American way.


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## Mike123abc (Jul 19, 2002)

The only type of a' la carte that would probably work is if companies had small packs that you could buy. For example:

1. Viacom kids package
2. Disney kids package
3. Disney sports package
4. Discovery package
5. TLC, HGTV, DIY package

Kind of like what you can get on C-Band, but without actual individual channels


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## Cyclone (Jul 1, 2002)

I guess that this will be like the last Cable TV act which resulted in Higher prices right away. Thank's gov't!


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## RJS1111111 (Mar 23, 2002)

Mike123abc said:


> The only type of a' la carte that would probably work is if companies had small packs that you could buy. For example:
> 
> 1. Viacom kids package
> 2. Disney kids package
> ...


We don't want *any* sports channels (OLN being the only exception). We want *all* of the kids channels. We want *all* of the educational channels. We would like to get *all* of the locals.

We would like to have commercials blanked (or replaced with serene picture postcards and music) on *all* pay channels. Okay, maybe I dream too much...


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## DonLandis (Dec 17, 2003)

There are also channels in every community that are required by law, now. These are Leased Access, Public Access, and Local Origination channels. Public Access channel is a non-commercial channel while LA and LO are Commercial. IMO, we need access to all three in every community. Each serves a very important public interest purpose. On the other hand, I doubt the cable subscriber would volunteer to pay for either of these on an a la carte basis. 

What should be done is this-

The basic core package to set up an account should include all local broadcast channels, All x-access channels, CSPAN 1 and 2, and any other local , state, Federal information channel as well as Weather channel. Beyond that, let them package and allow a la carte all they want. 

Here's what I see dieing off-
Religious channels except in the Bible belt. (0% of the Home Shopping channels. While these are indeed profitable and popular, how many people will subscribe to each? My guess is they will sub a la carte to the bigger ones which will survive an a la carte. The only other way is to more tightly integrate the packages, such as a Home shopping channel bundle, a News channel bundle, etc.

There is no easy answer to this but I do think the cable industry can be a bit more creative if they want. 

When it comes to Satellite, I think there is no need for a huge basic package. The need to offer a much lower end package such as 20 channels of the core necessities and then do what cable does as well. PPV monitoring could be set up to activate a bundle and shut it down when done. Say you wanted to watch a program on E! but your low end basic didn't have that channel. You could select it and for say $3 turn it on for a day! I would like this! Last year I did this for Al Jezera TV during the War and then shut it off. I turned it on for just 2 months. DishNetwork allowed this and waived the $5 shutoff fee. 

Yes, A la carte would work well for DBS and it could work in part for Cable but I doubt with Cable you could ever shut off the basic package as I stated it above.


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## Jacob S (Apr 14, 2002)

Those companies could try to rely on advertisement as income more than from subscribers but with DVR's becoming ever popular the ad rates may drop off a good bit as a result. This could actually cause rates to go up in itself without ala carte. Ala carte could cause an additional increase in price or a decrease if they try to compete against the other channels, or actually try to provide even better content to keep their customers, and have those channels that have poor content to get some good content finally.

I bet that cable and satellite companies would charge an access fee to gain access to the channels such as $10 or more + the price of the ala carte channels (similar to how Dish Network charges $5 now if you do not buy AT60/120/180/AEP) but if you take their packages the access fee would not be charged. Public interest channels would probably be required to be broadcasted along with a channel (or locals) that would give you access to severe weather and alerts in which would be included for the access fee. This access fee would help the companies be able to make the same amount of profit as what they would make with their basic package without charging you for what those channels actually cost, just what they would have made on it.


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## sikma (Dec 11, 2003)

The idea of ala carte seemed great to me at first (I utilitzed this many years ago with by B.U.D.). But at that time there weren't dozens of shopping channels, news channels, university channels, etc.. I would bet that if the sat. companies are forced to offer ala carte the hidden fees, etc. will be high enough that most people won't opt for it. On the flip side, if it turned out to be a success maybe some of those shopping channels, etc. would have to 'fold' due to lack of subscribers. I am fed up with paying $$ a month for the top60 and only watching 10% of the channels


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## Chris Freeland (Mar 24, 2002)

sikma said:


> The idea of ala carte seemed great to me at first (I utilitzed this many years ago with by B.U.D.). But at that time there weren't dozens of shopping channels, news channels, university channels, etc.. I would bet that if the sat. companies are forced to offer ala carte the hidden fees, etc. will be high enough that most people won't opt for it. On the flip side, if it turned out to be a success maybe some of those shopping channels, etc. would have to 'fold' due to lack of subscribers. I am fed up with paying $$ a month for the top60 and only watching 10% of the channels


No, the shopping channels would not go away because they would be available at no charge and unfortunately enough people watch them that they make money. The channels that would go away would be the niche channels that are a gem to some and a junk channel to the majority and all of us I am sure have a niche channel or two that we love that would likely fold. I am afraid all "a la carte" would do would be to reduce choice for all at very little or no benefit to the majority.


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## Mark Holtz (Mar 23, 2002)

My guess is that we won't be able to purchase just the channels we want, just groups of channels. If this occurs, it would not surprise me if there was a package which had you purchasing ESPN simply because that's the only way to get Disney Channel. Want TCM? You gotta purchase it with TBS, TNT, Cartoon Network, and Boomerang. Want TLC? You get the entire series of discovery channels.


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## Mike Richardson (Jun 12, 2003)

DonLandis said:


> (0% of the Home Shopping channels. While these are indeed profitable and popular, how many people will subscribe to each? My guess is they will sub a la carte to the bigger ones which will survive an a la carte. The only other way is to more tightly integrate the packages, such as a Home shopping channel bundle


The Home Shopping channels pay to be carried, not the other away around. Most likely, they will all be included in that base package you described earlier, or they will be free to add.


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## Mike Richardson (Jun 12, 2003)

I'm sick of subsidizing other people's sports addictions.

Bring on a-la-carte.


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## FTA Michael (Jul 21, 2002)

We could see "opt out" a la carte. That is, after you buy your package, you may request that a particular channel be turned off, and the carrier would reduce your bill by the amount it pays for the channel.

This would satisfy folks who are offended by certain channels and folks who could see a couple of bucks a month extra by dropping sports channels. It would be less helpful for folks like me who would drop Lifetime Movies and Nick GAS for just a dime or two a month.

Since the consumer would have to do something to drop a channel, and since the savings on most channels would look very small, I'd expect a la carte opt out to have little affect on subscriber levels on most channels. The carriers would have a net loss of zero for each channel dropped, and might even pick up a few oddball subs attracted by the new rules. The programming providers would lose a bit of cash, but their advertisers might feel that their viewers are more committed to watching.

In a word, yaneverknow.


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## RichW (Mar 29, 2002)

carload said:


> We could see "opt out" a la carte. That is, after you buy your package, you may request that a particular channel be turned off, and the carrier would reduce your bill by the amount it pays for the channel.
> 
> In a word, yaneverknow.


Nice dream but "it ain't gonna happen" that way if ala carte is ever legislated. First, an "opt out" would be difficult to manage, even more so that a straight ala carte selection. Secondly, it just deosn't make sense from a marketing standpoint. It would be like going to a restaurant, ordering the blue-plate special without the parsley garnish and wanting a 3-cent credit.


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## FTA Michael (Jul 21, 2002)

Well, it ain't my dream, I first heard of it with a balloon McCain floated a few months ago. I don't prefer it, I just want to throw it out as a possibility. It illustrates how difficult it is to predict what would result from a la carte when we don't even know what a la carte plan would be required.

Difficult to manage? From a computer database perspective, it sounds about equal to any other channel-by-channel a la carte plan.

Marketing? A la carte is about government intervention on behalf of the consumer, not marketing. We agree that a lot of channels just wouldn't be worth the effort to drop, which is why carriers and programming providers would dislike it less than other plans. And since it would least offend the business interests in this discussion, that's why I think it has a chance of being preferred by Congress, IF they should actually decide they have to intervene.

My bet would be "ain't gonna happen" for any a la carte in the near future, but I've been wrong before. The word still applies. Yaneverknow.


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## RichW (Mar 29, 2002)

"Difficult to manage? From a computer database perspective, it sounds about equal to any other channel-by-channel a la carte plan."

Difficult to manage from a customer service standpoint. The databse has to be managed by people. Call center volumes would go up as people start micro-managing their subscriptions - even if it is only a small percentage of the customer base. There would be people trying to save 10 cents by opting out of, say TNT, but then wanting it back for just a day to get some special show. We already saw this haapen on the pay channels, which caused E* to assess a $5 downgrade fee.

The most likely scenario for effective legislation is:

1. Unbundling of broadcast retrans rights (LIL) from requirements to carry "cable" channels.

2. Disallowing "cable" channel providers from forcing a channel into a particular tier.

This would remedy two unfair (IMHO) sales practices that would be illegal in most other business segments (forced tie-in sales). It would also let market forces determine which channels survive.


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## bnaivar (May 11, 2004)

Many years ago as a cable TV employee I predicted that the average consumer would not be satisfied with the available programming unless they could have what I dubbed "ME TV" where each subscriber only received the channels that they wanted. Of course, I was laughed off. :nono2:


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## FTA Michael (Jul 21, 2002)

RichW said:


> We already saw this haapen on the pay channels, which caused E* to assess a $5 downgrade fee.


Exactly! E* charges that $5 for *any* downgrade or sidegrade. For example, if I wanted to drop most of my Supers (which I rarely watch) and just keep WPIX, I'd save $1.50/month (because of the locals/supers bundle price), but it would be four months before I came out ahead! Keep that same paradigm, and folks would either restrict their channels when they first sign up, or in big infrequent clumps.

And I agree with you 100% on both legislative ideas. I'd even take it a step further -- direct the FCC to create a formula, based mostly on viewership, for all retrans agreements. No more holdouts, no more bundling OTA stations with cable channels, just fair payments to broadcasters. Sounds way too sensible to pass.


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## ypsiguy (Jan 28, 2004)

I would not be surprised to see a tier system similar to Star Choice in Canada. A lifeline basic tier of locals and general public interest channels. Cable here already has a lifeline tier (Comcrap does at least). Then the extended basics will be broken up into genre tiers. The more of them you buy, the greater the discount on them as a whole.


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## Mike Richardson (Jun 12, 2003)

At least with tiers I would wind up having most of the tiers but I could drop sports. Even if it only saves a few dollars a month over AEP, at least I won't be subsidizing them anymore.


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## Jacob S (Apr 14, 2002)

Channels with poor ratings would either go down or improve their content. This would eliminate those channels that does not have good enough ratings. This may also cause the stations to lower their prices to compete and rely more upon advertisement to get their revenues (in which good ratings would do). This would be good for consumers if this is how it would pan out. The problem is with more consumers using DVR's less commercials are being watched in which would make that harder to do. 

What if loopholes would start becoming the norm such as the satellite companies being forced to purchase the programming themselves or having none of it offered which would force the providers to charge an access fee to gain access to any channels at all in which would include those channels that were forced to be purchased and cause programming prices to be just as high if not higher, but I doubt that would be allowed or even happen, but it makes you wonder what would actually happen.


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## JohnH (Apr 22, 2002)

FCC is getting in the game:

Released: 05/25/2004. COMMENT REQUESTED ON A LA CARTE AND THEMED TIER
PROGRAMMING AND PRICING OPTIONS FOR PROGRAMMING DISTRIBUTION ON CABLE
TELEVISION AND DIRECT BROADCAST SATELLITE SYSTEMS. (DA No. 04-1454).
(Dkt No 04-207). Comments Due: 07/08/2004. Reply Comments Due:
07/23/2004. MB. Contact: Ben Golant at (202) 418-7111

http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-04-1454A1.doc
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-04-1454A1.pdf
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-04-1454A1.txt


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## Guest (May 25, 2004)

Nick said:


> I'm changing my mind on ala carte.
> 
> I think it would eventually kill off the niche channels that some of us watch, but not in numbers sufficient to financially sustain them. What we would have then is a bunch of numbnuts watching rasslin', Springer-esque garbage and ET. The quality programming of the Discoverys, NGC, Bravo, etc. could eventually go away. Also, I anticipate that the same channels we now have in packages would be significantly higher in cost as ala cartes.
> 
> ...


The same government that desiged our tax code wants to create ala carte system for programming?

There will be so many excemptions, rules for that, situations for this blah blah blah.

And a nightmare to enforce and manage for program providers.

Ala Carte.... nope.


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## John Walsh III (Apr 27, 2002)

I don't see ala carte happening either. I did used to subscribe to some stuff ala carte on c-band but do not anymore.


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