November 21, 2008

Posted by amanuse at 12:00 AM on May 10, 2006

A La Carte Programming Would Truly Deliver Consumer Options

Later today, when my beloved Buffalo Sabres play the Ottawa Senators in one of the National Hockey League's two Eastern Conference semifinal playoff games, I can't watch them at home, even though I pay $39 a month for cable television.

If RCN, my cable provider, even carried OLN on its regular cable lineup, the network that airs most Sabres hockey games, I wouldn't be able to watch the Sabres. Comcast, the other cable television provider in the Greater Boston area that charges roughly $45 a month for cable, is airing the Carolina Hurricanes at New Jersey Devils Eastern Conference semifinal game on OLN.

Maybe the Philadelphia-based company is bitter that the Sabres beat the Philadelphia Flyers in round one of the NHL playoffs, because it is otherwise hard to comprehend why the cable provider is airing the Jersey-Carolina game in Boston when the Boston Bruins are in the same division as both the Sabres and the Senators. Okay, so RCN's more expensive digital cable lineup shows the same game as Comcast, but why? Boston hockey fans would surely be more interested in what's going on with the teams their Bruins play the most during the regular season.

Still, I'm not convinced Boston fans are all that upset that they can't watch the Sabres and Senators duke it out while their team watches from the benches. I am sure, however, that there are Buffalo Sabres and Ottawa Senators fans in Boston, who, like myself, want to watch that game. I'm also sure there are New Jersey Devils and Carolina Hurricanes fans in Boston who are happy they can watch their teams play.

Why can't hockey fans choose which game they'd like to watch on cable TV? Wouldn't that be what cable providers mean by "consumer choice"?

Unfortunately, no -- that's not what they mean.

Cable television providers -- Comcast, RCN and others -- are lobbying against so-called "a la carte" cable television packages, claiming that the move would limit choice for consumers. They claim that less popular channels wouldn't be able to stay on the air if they aren't supported by all cable subscribers. The idea is that some subscribers like some unpopular channels and other subscribers like other unpopular channels, so all subscribers should pay for all of them. It gives choice to people with more particular interests, they say.

And sure, they offer On Demand programming, which is an excellent service that does give consumers more choice, but it really fails when it comes to live programming like sports events. And On Demand also doesn't allow artists to pitch new programming ideas to add to the list. It isn't a free market for programing content, because the cable providers select which producers of content have access to their networks.

What cable providers currently offer consumers is not choice at all, it's just more from a dictated list of channels than they previously offered. And cable providers are standing in the way of technology, like the Internet and even their own On Demand technology, which has the potential to offer consumers far more choice than traditional cable programing ever could.

Cable providers, however, among other major companies in other industries, don't want technology to be unleashed to benefit consumers. They want to slowly transition into new technologies while making as much money in the process as they can. And who can blame them?

Well, the government, which supports cable monopolies, duopolies or oligarchies in each geographic market, could remove franchising rules and other limits to new competition and barriers to trade. But that's another topic, covered partially by one of my recent articles in the MetroWest Daily News.

If cable providers had to compete with more providers or diverse types of content delivery systems, the market for content would surely change for the better. The cable providers would still be able to charge a fee for providing the conduit or marketplace for content producers, but their success would depend on how well their marketplace worked and how many content producers they were able to attract. This would give consumers choice.

The reason is, content producers would be forced to support themselves in a free-market system, and consumers would pay for the channels or programming they want to watch. They'd also get to watch it when they want. At the same time, they wouldn't have to support channels they find uninteresting or unethical. This would give a lot of religious groups and individuals recourse as parents with young children could eliminate content they just don't want in their homes.

Cable providers could learn a lot from Apple Computer's iTunes program, which has freed up content for the consumer and rewarded quality content producers. The program that started by offering only music gives consumers total choice over what music they want to listen to. At the same time, when consumers download a specific song, their dollar supports the creator of that content, reinforcing the free-market network Apple set up. Apple, for setting up the conduit or marketplace with its service, profits by perfecting the marketplace and making it comprehensive, intuitive and classy.

Cable providers may have to learn from Apple sooner than later. Apple recently launched its podcast, free-radio network, and now sells television programs and music videos for $1.99. Just this week, the company said it would sell Fox TV shows for the same price.

As a growing number of content producers get sick of the incumbent institutions that traditionally produce content, and consumers get sick of paying too much for that content, services like iTunes will become the norm for video content, and consumers will abandon cable.

In the meantime, in this current suppressed marketplace where cable providers aren't doing the trick for consumers, the only way I can watch the Sabres play and potentially win the Stanley Cup Championship for the first time ever is to pay DirecTV an exorbitantly large amount of money, $49, to get NHL Center Ice. The lack of competition for selling NHL games is what makes this program for watching the NHL postseason so expensive, and unaffordable for people with limited incomes like me.

And that leaves one other option for me, the consumer: Going to a bar, the Sports Depot in this case, which has purchased NHL Center Ice.

Perhaps the NHL is responsible for this, by only licensing certain games in certain places, and all the games only to DirecTV? But I can't believe this. It seems clear to me that cable providers haven't sought or enabled more content choice for consumers because they don't want to. They make more money by restricting choice and by maintaining their dominance.

Thankfully, when technology is unleashed and content producers wise up enough to use it, consumers will ultimately be able to entertain themselves at will.


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