TV a la Carte is Bad?
The Post makes it sound like experts are in disagreement with the fact that TV a la Carte will bring increased costs to consumers in the near term. The fact of the matter is, the companies that support a la Carte pricing are doing it so they can 1) Raise prices and 2) shut out competitors.
The raising prices is a layup. Few of the cable companies have had pricing power since the competition in the TV market has gotten so hot. Not only do companies compete with land-based cable companies, they also compete with at least two satellite companies that can offer (in many cases) better programming cheaper since they’ve cost structure is different.
A la Cart pricing allows for price discrimination in EVERY market because, like airline prices, no one knows what their neighbor paid.
The competition argument is weaker, since IPTV companies will soon be able to offer wider services, and they will be helped out big-time by an a la cart option. There are, however, still a lot of markets that would need major tech upgrades and capital spending to allow for this. Some companies have said that their customers would just have to use more cable boxes, but I think they’re trying to bluff the FCC into not implementing this ruling.
But no matter what, the near term outlook is not good with regard to pricing. It is important to remember that better profits for these companies does not guarantee better content or service, no matter what the providers say. The Bells have been making this argument for years, and whenever their monopoly is strengthened, the consumer is hurt.
The bad news is that I believe the a la Cart ruling is something the FCC must do. I suspect that the Internet will intervene in this market and do what it has done in other areas, mainly disrupt it. Without the a la cart ruling, IPTV will be slowed and I think that will, long term, hurt consumers more than the short term regressive effects of more expensive TV.
The only wild card in the whole dispute is in what happens to the smaller channels? Channels that have, in the past, survived because of bundling will no longer have that protection and will have to survive on their own. I don’t know how many of these will survive. The upside is that, with IPTV (again) many of these kinds of channels will be able to run much more cheaply than they can now. Perhaps this ruling will be like an asteroid: short term die-off leaving an ecosystem that is ripe for the rise of new species.
At least, that’s what I’m hoping.
