Monday, May 4, 2009

Help! I'm being held hostage by cable sports channels

I'm a movie fan. Decades ago, in college, I learned to run 35mm projectors (we also ran 70mm, and we had variable-speed controls for silent pictures...but that's another story). As a kid, I borrowed 8mm versions of classics from the library, and ran them on the home-movie projector. I'm not (too) embarrassed to admit that I still have a library of LaserDiscs at home (LaserDiscs were effectively the 8-track tapes of the video business, a format that never caught on).

This is all to explain why I had no choice but to "upgrade" my cable package, because that was the only way I could keep Turner Classic Movies (TCM), the best channel around.

I didn't want the extra half-dozen sports channels that came with this "upgrade". I never even wanted basic ESPN, let alone the various ESPN spin-offs that are part of the new package. But I'm now paying much more, mostly for channels I don't watch and didn't want, just so I can keep TCM.

Why can't we buy cable channels a la carte? (I know the standard argument, and I'll get to it shortly.) Why can't I drop ESPN, which charges cable operators roughly $3 per cable-subscriber whether we watch or not? If I could drop ESPN, I ought to be able to cut my monthly bill by at least $3, perhaps more. If I could drop all the other sports channels, maybe I could save another $10-15.

I would happily pay $10 per month for TCM, if I could simply add it on the cheapest basic cable package.

The arguments about why a la carte pricing will inevitably lead to ruin for everybody run along these lines : The practice of "bundling" allows cable operators to use the popular channels to subsidize the less popular channels. Without bundling, only the popular will survive, the niche will die, and there will be fewer choices for all.

Maybe. Maybe not.

I'm sure there are far more households that would want ESPN than would want TCM. But maybe the way to balance this out is to charge variable pricing. If I want just one channel in addition to the basic package, maybe I pay $10 for it. If I want 5 channels, maybe they're $4 each. If enough fans of a "niche" channel are willing to pay more for it, perhaps it can survive.

None of the analyses I've seen considers variable pricing. Ardent fans of a channel could pay more (note that some tests of "free" song downloads with a price of "pay what you want" have actually generated significant amounts of money). And the price per channel could vary based on number of channels, similarity (or difference) of channels, any number of variables.

Until we see some tests and hard data on this, I'm not convinced that a la carte is a bad thing.

And the ability to stopped getting fleeced for a dozen sports channels I never watch would be fabulous!

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