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Last month, I met with Time Warner Cable’s local leadership, Deborah “Debi” Picciolo, president of residential services for the West Region, and Clarence Caldwell, president of network operations/engineering for the West Region. I’ve finally had time to compile the question and answer post to help readers understand their cable company just a bit better. Those answers are HERE.
Now let me get to one of the bigger questions: When will Time Warner offer a la carte so customers can pay only for the channels they want to watch?
Answer: Don’t hold your breath. Time Warner is taking the National Cable & Telecommunications Association position. The organization is the cable industry’s trade group,which earlier this year detailed this stand: A la carte forces prices up.
That statement is up for serious debate. And here are a few groups who say baloney to the notion that channel choice means higher prices. The Consumer’s Union, which publishes Consumer Reports, says choice will encourage consumers to try paid TV services (this FCC filing points out the cable industry’s flaws in the argument).
But here are some reasons why the cable industry believes cable TV prices will increase if consumers paid only for the channels they wanted. Now, bear with me since I can already hear readers’ snarky responses:
- Unpopular channels would go out of business, which not only decreases the variety of channels available to consumers but the potential revenue to cable companies. To make up for losses, cable companies would charge even more per channel.
- Since cable companies charge advertisers based on number of eyeballs, a decline in some channels means less advertising revenue. Again, prices would go up to make up the difference.
- Consumers pay more for less. NCTA’s example is that if two eggs cost the same as a dozen, wouldn’t you rather have a dozen?
- A la carte is inflexible. Consumers would have to lock in their TV channel choices in advance and there would be no ability to explore new shows on other networks.
In other words, cable companies will raise prices if they have to offer each channel piecemeal.
Beyond the usual suspects of paid-TV providers and TV channels, several non-TV groups support the NCTA’s position. These include the many ethnic minority groups like the NAACP, conservatives like Americans for Tax Reform, religious groups including The Christian Broadcasting Network, and others, such as National Organization for Women and Planned Parenthood. A complete list of supporters is HERE.
It’s not an answer most readers want, but it is an answer.
As cable companies fight the onslaught of new ways consumers are watching TV — from the free-for-now Hulu.com to paid alternatives of Verizon FiOS and AT&T U-verse — the interesting thing is that cable companies are already being forced to change.
Time Warner has been losing basic cable subscribers all year. And earlier this year, Time Warner announced “TV Everywhere,” an online service to offer paying cable customers TV shows online. Trials are already underway. And yesterday, cable provider Comcast announced it would buy NBC, which co-founded Hulu.
Times are changing and apparently, so must Time Warner.
More a la carte reports, documents: