Friday, September 21, 2007

Bundling vs a la carte

There have always been complaints from homeowners regarding purchasing a package of channels against the ability to only purchase the individual channels you want. And at first blush, it sounds like a good move for the customer, pay for only what you want. But in reality, that might not be the case. First, people really don't watch channels, they watch programs. So if they find themselves liking a new program, they will then start moving to a transaction type model to enjoy the individual show. The more you watch, the more you spend. In most cases, buying in bulk, whether at Costco or on your channel line-up, ultimately gives you more for less.

Yes, we get channels that we may not want to watch, but the reverse also holds true, others may not like the channels we watch. Ultimately, the aggregate purchase enables all to get access. Now some channels are placed higher up in tiers and force an additional purchase, and even others may not even be available on your particular cable company's line-up. It is not an all or nothing environment for channel viewing. But the system isn't broke, so does it need to be fixed?

So how does the issue get resolved. The answer I believe does lie in the world of broadband. Channels and shows can find distribution outside the linear cable line-up. VOD enables a subscription or transaction opportunity. That cable customer can get access to on-demand without purchasing any additional channels. And the opportunities with IP delivered programming and new platforms like Joost brings more choice to your fingertips. And isn't that what we really want, more choice. So this lawsuit shouldn't be about antitrust or program packaging; the effort of these litigious individuals should be about embracing competition from Direct TV, Dish, Verizon FIOS and AT&T U-Verse in the marketplace, the choice of programming on the web and on VOD, and fair and open access to the web. That will keep the pricing of programming reasonable.