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NCTA Battles A La Carte During its Really Big Show

Just as the cable television community converged on New Orleans for its annual blow-out, citizens groups appeared on Capitol Hill calling on legislators push for cable's greatest nightmare -- a la carte channel selection.

The Concerned Women for America (CWA) and Citizens for Community Values (CCV) joined forces to commission an opinion poll on where Americans stood on the a la carte issue. In a finding that shocked few but probably cut into hurricane time down in the Big Easy, the majority of people surveyed preferred ordering and paying for only those channels they wanted, a/k/a, a la carte. Of 1,000 people surveyed in mid-April, around 80 percent indicated they would prefer a la carte pricing.

In a further breakdown of the results, about 62 percent of those surveyed were actually cable subscribers, and of those, 62 percent said they preferred a la carte. Of the non-cable subscribing 38 percent, 66 percent said they'd be more likely to subscribe under an a la carte option, and 39 percent said they'd be "much more likely to subscribe, (which can only mean that at least 5 percent of that group is both "more likely" and "much more likely" to subscribe, because 66 plus 39 is 105 and that's more than everything, although not much more.)

The citizen's groups laid out the findings of their survey on Wednesday, the last day of the NCTA's National Show, when the collective hangover on the bayou is generally the worst. And to make sure they were not ignored, the CWA and CCV held a press conference on the Hill that included some of television's thorniest critics, from Sen. John McCain, (R-Ariz.), to Gene Kimmelman of the Consumers Union and Brent Bozell of the Parents Television Council.

Having the preceding three individuals in agreement on anything at all suggests an issue with the potential to unify people who could typically not order a pizza together even if they were starving. Cable operators and their lobbyists have long worked very hard to keep even the concept of a la carte channel selection under wraps. As long as five years ago, an AT&T engineer said "cherry-picking" technology was widely available; "cherry-picking" being the slang for the technology necessary to provide a la carte channel line-ups. But technology is not the issue. Cable's business model is the issue.

Now that the idea of a la carte is infiltrating the mainstream, cable is coming out gunning in defense of its business model, which would, indeed, be heaved into chaos if a la carte were suddenly required. (Broadcasters, whose effort to protect their own business model have been characterized as greedy spectrum-grabbing, can certainly sympathize, but probably won't.) Cable networks have long relied on a dual-revenue stream; one from advertising, and one from the monthly, per-subscriber fees they get from the cable operators who carry the channels.

For the larger, more established networks like Lifetime, ESPN and TNT, which reach almost all cable and satellite subscribers, a la carte potentially could cut their distribution drastically, affecting both revenue streams. For smaller cable start-ups that have yet to develop a following, (although most, if not all, belong to an established network group), a la carte could erase them altogether.

In a move apparently intended to invoke female loyalty, the NCTA pulled together its women cable executives down in New Orleans to answer the CWA's call for a la carte. A letter signed by 20 of the cable industry's most powerful women, including Anne Sweeney, president of Disney-ABC Television and Judith McGrath, president of MTV Networks, laid out the scenario that a la carte will cost dearly. (Coincidentally, several of the women who signed the letter gathered in Washington, D.C. three years ago to remind the NCTA that it was supposed to be representing networks as well as cable operators.)

"As women television executives, who have strived to create quality programming, we take pride in the fact that our networks have vastly expanded programming choice and diversity for American consumers. Government efforts to dictate how our programming is packaged or marketed would be bad for consumers because it would give them less choice and less diversity in programming, and it would increase the price they would pay for this inferior set of offerings," the letter stated. "Under an a la carte system, consumers who now pay $40 per month for expanded basic cable service that provides 60 to 70 channels, may need to pay the same $40 for a fraction of the channels they currently receive."

The NCTA subsequently released a white paper entitled, "The Pitfalls of A La Carte: Fewer Choices, Less Diversity, Higher Prices."

"A government policy to require a la carte is not simply 'tinkering' with the cable and satellite industries' business model," the paper stated. "It forsakes a highly successful, market-driven business model, to substitute an entirely new model with no empirical evidence as to its long-term viability, and turns back the clock on the extraordinarily diverse programming business that has developed over the last 30 years."

Broadcasters, meanwhile, relaxed for a minute.