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All or nothing

Business | The cable industry balks at calls for à la carte pricing

Issue: "Comfort and joy," Dec. 24, 2005

An inquisitive little girl and her monkey companion navigate the occupational world of grown-ups in a recent episode of Dora the Explorer on Nickelodeon. Dora and Boots try out various jobs, guiding young viewers through the work environment of a pilot, a chef, and an archaeologist. Such kid-friendly content on a number of cable television stations render basic cable subscriptions attractive for many parents.

But several remote clicks away, cable networks such as MTV and FX serve an entirely different market, regularly offering shows with suggestive sexual content, gritty violence, or profanity. Cable television is not subject to the Federal Communications Commission's (FCC) decency standards.

Family values organizations, including the Parents Television Council (PTC) and the American Family Association (AFA), hope to clip the strings bundling together such polar streams of programming. "Families should not be forced to subsidize cable stations that they do not want in their homes and do not watch," said Randy Sharp, the AFA's director of special projects. "If I go to Wal-Mart to buy the latest issue of American Woodworker, don't force me to buy Biker Babes and five other magazines, too."

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That push for consumer choice prompted action from FCC chairman Kevin Martin at an indecency forum last month: He urged cable executives to repackage their channel subscriptions, suggesting either content-directed tiers or an à la carte option in which consumers could select and pay for channels individually. Industry giants Comcast and Time Warner, along with several smaller companies, responded Dec. 12, announcing plans to offer "family choice" tiers as early as next spring.

The move represents a dramatic shift for cable companies, which had previously maintained an unwavering commitment to V-chip technology as the only viable option for consumer choice. V-chips allow subscribers to block whatever cable channels they find objectionable-though payment for those channels is still required.

Kyle McSlarrow, head of the National Cable and Telecommunications Association (NCTA), told the Senate Commerce Committee he hoped the concession would stave off government threats to begin regulating cable content-a potential federal invasion steeped in constitutional stickiness. Mr. Martin praised the proposed family-friendly tiers but reserved final judgment until more details are known. Mr. McSlarrow said specific packages and pricing will rest with individual companies.

Industry analysts lauded the strategy behind NCTA's concession. But whatever favor the proposal might curry with FCC executives, it has failed to appease the concerns of values-based advocacy groups. "The cable industry is throwing up family tiers as a red herring rather than having to face the real marketplace of fed-up consumers," said PTC president L. Brent Bozell.

Mr. Bozell joins a host of other pro-family advocates in pushing for unfettered consumer choice-namely à la carte pricing. He argues that a tier-based approach places cable operators, rather than parents, in control of what content is deemed appropriate for family viewing.

Cable executives say the à la carte option would drive up prices and kill channels that rely on "grazing"-casual stops from channel flippers-for much of their audience. Prior to Mr. Martin taking over, the FCC had opposed per-channel pricing for those very reasons, suggesting it might limit choice by driving down the number of stations available.

The survival-of-the-fittest approach also would hinder new unknown stations from slowly gathering viewers and likely hurt stations devoted to religious programming.

The Trinity Broadcasting Network (TBN), for example, takes advantage of bundled packaging to reach homes that would never select it from a list of choices. TBN supports "Multicast Must-Carry" legislation, which would force cable companies to carry all the digital signals from a particular network-the antithesis of per-channel pricing.

But AFA's Mr. Sharp told WORLD that free-market principles should trump any costs to religious stations: "Consumers should decide if they want TBN or they want MTV," he said. "Let the market correct itself."

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