Monday, June 25, 2012

Forcing A la Carte Cable Programming Would Hurt The Cable Industry

Without the packaging of multiple cable networks at one monthly subscription price, most cable networks would fail to reach a large enough audience to succeed.  Not enough license fees, not enough advertising revenue, and not enough accessibility to build an audience and get a Nielsen rating.  "If the U.S. government mandated that TV channels be sold individually, only five to 10 traditional TV networks would survive -- destroying up to $300 billion of value, endangering some 1 million jobs and curtailing consumers' video choices, according to an analysis by Needham & Co."  So why can upstarts in the digital web space survive, less capital and fixed expenses, and small means more flexibility.  Their returns are smaller but such is the case of an upstart trying to change the system.

Consumers may desire paying less for cable, but it is the current system that pays for the content that ultimately finds its way from TV to the web.  Changes in programming are happening thanks to a free economy that  encourages competition and new forms of competition.  But this change must happen over time and not be forced by government intervention.  Letting natural market forces change the nature of how and  where people consume content will ultimately shift and move the content model to other technologies and pricing models.

1 comment:

  1. "natural market forces"... Yeah, because must-carry rules and the leverage that gives terrestrial broadcasters is a natural market force. And the local monopolies provided to the telcos and cable companies are so natural.