There’s a lot of moving and shaking in the entertainment industry concerning how consumers like you watch movies and TV.
Gone are the days when families gathered around the set to watch their favorite show on one of three networks. So are the days of trying to figure out how to set your VCR to record the game you’re going to miss.
Today we want to watch what we want, when we want to – and media companies are scrambling to provide you with the best (and most lucrative) way to do so.
This could mean that someday soon you’ll have more flexibility when it comes to choosing a cable TV package. But that’s only part of the future of television…
A la Carte Cable vs. Bundles
Have you ever wondered why you need to get all of those hundreds of cable TV channels? You really only watch about a dozen, and probably only a few on a daily basis. Most consumers want to know why their cable provider won’t let them simply choose the channels they want in their cable package.
The first thing you have to realize is those cable TV channels you love are connected to much bigger parent companies. For instance, Disney isn’t just the Disney Channel, it also owns ESPN and much more. Comcast owns E!, The Golf Channel and more. Time Warner owns HBO, CNN, The Cartoon Network – and the list goes on and on.
So that’s why you get what are called cable bundles. Media companies package smaller, less-popular channels with the bigger, more-popular networks. Right now – many of those big companies prohibit cable providers from offering stand-alone channels.
Here’s something interesting from the Parents Television Council. Check out the website How Cable Should Be and build your own hypothetical a la carte TV package. It certainly seems like you could significantly lower your cable or satellite TV bill by getting rid of what you don’t ever watch…but would it really work?
The Disappointing Truth
While the FCC generally supports a la carte cable, as do many consumer groups, there are also those who doubt it would actually pass on any savings to consumers.
Some industry analysts say forcing cable companies to offer build-your-own package options would only mean the providers would then raise prices on individual channels to maintain their revenue. It might be very similar to how soaring bank fees came about after the Federal Reserve introduced new rules that cut into the revenue of financial institutions.
Here’s how Joe Flint from the LA Times explains it:
“If 40 million homes were suddenly given the choice to decide for themselves if they wanted ESPN and all said no thanks, then the other 40 million would see their bills go up to pick up the slack. That would be true for any channel under an a la carte system.”
According to Reuters, some smaller cable providers are starting to consider the a la carte option. It certainly seems to be what customers want. But an article in The New Yorker points out that we also like things bundled together nicely in little packages.
Whether it’s our cell phone plan, gym membership, or a vacation at an all-inclusive resort – in some cases bundling can actually help keep costs down. It might also be why some people are so attracted to the concept of a flat tax. Bundling keeps it relatively simple. So maybe it’s not such a terrible thing.
The iTunes Idea
Apple revolutionized the way we listen to music when it started offering single songs instead of entire albums. Well okay, Napster had the idea first – but Apple turned it into a law-abiding, money-making, customer-pleasing machine.
Music geeks may love getting the full album from their favorite bands, but most people only want the couple of songs they like – and not all 15 tracks. That’s the beauty of the iTunes concept.
Now you can watch television the same way. You don’t watch every program on MTV or every game on the NFL Network. So if you use a service like Amazon Prime, Hulu-Plus or buy TV shows on iTunes, you can pick and choose. This is an even more diversified way of choosing what you watch. But is it cheaper?
In a 2006 interview with NPR, New York Times columnist Joe Nocera cited estimates from Stanford Bernstein that found most families would end up paying $500 a month if they watched television exclusively through that kind of an a la carte pricing model. The reason? We watch a lot more TV than we realize, and different family members watch different shows.
That’s why services like Amazon Prime are usually only add-ons to traditional TV viewing. It’s a way to see programs you don’t have access to, or catch shows you’ve missed.
But What If…
So it seems that even if you could convince the big boys of cable to offer a la carte, it wouldn’t really end up saving you that much money. And the idea of paying for every little show you watch could rack up a huge bill.
But what if you could compromise? What if you had a hybrid of la carte cable where you could choose smaller bundles and package them together to get closer to what you want?
Time Warner Cable has actually been testing out something like that. It’s TV Essentials Package is now available all over the East Coast after being introduced in New York City last year. It gets rid of the expensive ESPN package as well as other sports channels – so it’s not for sports fans. TV Essentials also eliminates all news networks other than CNN (sorry Fox News folks).
This price-tag for Time Warner’s TV Essentials is between $30 and $40, or about half of what the average Time Warner Cable customer pays.
This seems like the start of a good idea. But I don’t think it goes quite far enough to make most consumers happy. People with no kids may not want Nickelodeon, Nick Jr. and Boomerang. You may not be interested in any cooking/food channels, or if you’re a single guy you could do without Lifetime, Hallmark and Oxygen.
You can’t please all the people all the time, but I’m sure there are many ways to tailor other types of packages specific to certain lifestyles.
How would you prefer to watch TV? Leave a comment and let us hear your opinion!
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Next Time: We’re going to take a look at the different streaming options like Netflix and the many competitors now coming on the scene to trying and become the future of television.
Image: David Castillo Dominici / FreeDigitalPhotos.net
+Kasey Steinbrinck is a former TV news producer and newspaper reporter who is now the lead blogger for Check Advantage. The online printer of personal checks and business checks offers designs for all – from cool checks to cute checks! Contact Kasey if you’d like free content created for your website or blog.
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{ 3 comments… read them below or add one }
Great article. I think smaller bundles could work if programming company’s were willing to come up with a couple of options for different types of media consumers. For example, I thought the stripped down time warner plan sounded awesome. Perhaps single women like a different slate of channels? It makes sense that if there are different groups of consumers to try and make more of the market satisfied with their media products.
There are a lot of big changes happening in media right now, and the field of competitors is growing. Hopefully, that only means good things for consumers. We’ll just have to wait for the dust to settle.
Thanks for stopping by Shaun!
Hey besides the HD channels, Time Warner TV has a large collection of movies in the form of video on demand, pay-per -view channels and the list goes on and on. The features are quite innovative and at reasonable rate.