Survey Says: 92% of Consumers Want A La Carte

[texasguy37 ACE - Champion]

Here is a very interesting article about a la carte TV services.  Based on the article, it seems that the majority of people have an unrealistic view of prices that would be charged under an a la carte model:

About 92% of consumers want some type of a la carte programming offering from their multichannel service providers, but they're not willing to pay much for it, according to a recent RBC Capital Markets survey.

RBC Capital conducted a proprietary survey of more than 1,000 consumers, asking them a variety of questions about their multichannel desires. About 92% of respondents said they would be at least "somewhat likely" to switch to a full a la carte option, with 82% saying they would subscribe to at least 11 channels and 40% claiming they would subscribe to more than 20 channels, with a weighted average of about 19 channels. Of those respondents, about 51% said they would pay at least $1 per month per channel in an a la carte world, with the weighted average being $1.47 per month.

That works out to about $28.50 per month, or about one-third the average monthly multichannel bill.

RBC Capital's conclusion? A la carte works for the consumer, but not so much for the programmer and the operator.

According to RBC, if all 100 million multichannel TV homes switched to an a la carte service at $28.50 per month, the industry would generate about $34 billion in total revenue, or about the same amount that pay TV operators paid programmers in affiliate fees alone in 2011. Estimating that about 50% of video revenue goes to pay affiliate fees, and programmers would be left with about $17 billion, or half what they received in 2011, according to RBC. 

While some channels could benefit from a la carte - especially those that are receiving substantially less than $1.50 per month per subscriber in affiliate fees - "a scenario in which total industry affiliate revenues shrink is probably not something any programmer would want to participate in," RBC added.

http://www.multichannel.com/article/483284-Survey_Says_92_of_Consumers_Want_A_La_Carte.php

[hpmsrm]

That is interesting.  Like the majority we would love the a la carte method.  We'd probably end up paying nearly the same but at least we would get the channels we want and be able to toss out the ones we don't.  BUT......we well know this ain't never goin' to happen.

[dhascall ACE - Professor]

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hpmsrm wrote:

That is interesting.  Like the majority we would love the a la carte method.  We'd probably end up paying nearly the same but at least we would get the channels we want and be able to toss out the ones we don't.  BUT......we well know this ain't never goin' to happen.

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I used to believe that "never" would apply to ala carte pricing but it may very well happen in my lifetime.  Especially since ESPN charges the highest per subscriber.  What if you don't watch sports?  There could be pressure to make this happen, sooner rather than later or never.

[oufanindallas]

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dhascall wrote:

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hpmsrm wrote:

That is interesting.  Like the majority we would love the a la carte method.  We'd probably end up paying nearly the same but at least we would get the channels we want and be able to toss out the ones we don't.  BUT......we well know this ain't never goin' to happen.

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I used to believe that "never" would apply to ala carte pricing but it may very well happen in my lifetime.  Especially since ESPN charges the highest per subscriber.  What if you don't watch sports?  There could be pressure to make this happen, sooner rather than later or never.

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If you don't watch sports then it may be ok, but I don't want to have to spend $20 or $30 to get just one ESPN channel or Fox Sports channel. I watch NCAA Football, MLB, NFL, NHL and NASCAR and for me that could get very expensive

[mibrnsurg ACE - Geek]

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oufanindallas wrote:

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dhascall wrote:

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hpmsrm wrote:

That is interesting.  Like the majority we would love the a la carte method.  We'd probably end up paying nearly the same but at least we would get the channels we want and be able to toss out the ones we don't.  BUT......we well know this ain't never goin' to happen.

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I used to believe that "never" would apply to ala carte pricing but it may very well happen in my lifetime.  Especially since ESPN charges the highest per subscriber.  What if you don't watch sports?  There could be pressure to make this happen, sooner rather than later or never.

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If you don't watch sports then it may be ok, but I don't want to have to spend $20 or $30 to get just one ESPN channel or Fox Sports channel. I watch NCAA Football, MLB, NFL, NHL and NASCAR and for me that could get very expensive

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Agree OU, could get expensive real quick.  Also 1 ESPN would not work as Nascar Sprint Cup/Nationwide is on 1&2 (and ABC local), personally I'd stay on this plan as there are too many channels I watch even if there was a la carte.

Think it would be smart for providers to come up w/a lower price package that does not have any sports, except on their locals, if they choose them.

Chris

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Please NO SD stretch-o-vision or 480 SD HD Channels
Need Help? 1-800-288-2020, After he gets acct info, press # a bunch of times, get a menu from Mr. Voice recognition
Your Results May Vary, In My Humble Opinion
I Call It Like I See It, Simply a U-verse user, nothing more

[spd2demun ACE - Master]

I wish they'd make U450 cheaper with NO SPORTS--I could go for that.  U425?

They will have to come up with something if others are doing it (Comcrap?).  From what I've read on this forum, people don't care so much about price, they're just annoyed at having so many channels they don't watch.

The Guide is still VERY cumbersome for hiding channels!

[Uniblurb3 ACE - Guru]

Bet U425 would float just as good as U571!

I could go for A La Carte since bet I only watch 5%-10% of the channels I subscribe too. How about a discount for knocking all SD channels off a package??

[spd2demun ACE - Master]

Or call it Sub-U450, LOL!

There are a few SDs that still aren't in HD, so they'd probably charge extra to keep those on an all-HD package.

This is exactly why traditional TV content providers are losing business...and I know the younger set seems to watch everything from their smartphones!

[oz_1 ACE - Wizard]

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Uniblurb3 wrote:

Bet U425 would float just as good as U571!

I could go for A La Carte since bet I only watch 5%-10% of the channels I subscribe too. How about a discount for knocking all SD channels off a package??

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I like this idea and the same here only HD and maybe 10 of those so A La Carte would work out cheaper for me.

[oufanindallas]

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mibrnsurg wrote:

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oufanindallas wrote:

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dhascall wrote:

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hpmsrm wrote:

That is interesting.  Like the majority we would love the a la carte method.  We'd probably end up paying nearly the same but at least we would get the channels we want and be able to toss out the ones we don't.  BUT......we well know this ain't never goin' to happen.

---

I used to believe that "never" would apply to ala carte pricing but it may very well happen in my lifetime.  Especially since ESPN charges the highest per subscriber.  What if you don't watch sports?  There could be pressure to make this happen, sooner rather than later or never.

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If you don't watch sports then it may be ok, but I don't want to have to spend $20 or $30 to get just one ESPN channel or Fox Sports channel. I watch NCAA Football, MLB, NFL, NHL and NASCAR and for me that could get very expensive

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Agree OU, could get expensive real quick.  Also 1 ESPN would not work as Nascar Sprint Cup/Nationwide is on 1&2 (and ABC local), personally I'd stay on this plan as there are too many channels I watch even if there was a la carte.

Think it would be smart for providers to come up w/a lower price package that does not have any sports, except on their locals, if they choose them.

Chris

---

Please NO SD stretch-o-vision or 480 SD HD Channels
Need Help? 1-800-288-2020, After he gets acct info, press # a bunch of times, get a menu from Mr. Voice recognition
Your Results May Vary, In My Humble Opinion
I Call It Like I See It, Simply a U-verse user, nothing more

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Agreed.  Between the sports, the wife and I watch several channels, I'll stick with the U450 just in case.

[oz_1 ACE - Wizard]

I actually sat down with the wife last night and went over the channels we watch besides the locals the lineup consists of History, Science, Food nnetwork , SyFy, HGTV and HDNet all in HD. 

[hpmsrm]

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dhascall wrote:

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hpmsrm wrote:

That is interesting.  Like the majority we would love the a la carte method.  We'd probably end up paying nearly the same but at least we would get the channels we want and be able to toss out the ones we don't.  BUT......we well know this ain't never goin' to happen.

---

I used to believe that "never" would apply to ala carte pricing but it may very well happen in my lifetime.  Especially since ESPN charges the highest per subscriber.  What if you don't watch sports?  There could be pressure to make this happen, sooner rather than later or never.

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Trouble is, Dave.....when I say "in my lifetime"....at my age that is in the very foreseeable future.  My cardiologist says he's gonna keep me going to 90.  But I just mowed the lawn and my body says he's crazy.

[6Thialia6]

I am so ready to be able to choose my own package

I don't mind paying for it - but would save me from scrolling through crap that I don't watch and would just rather was not there

All the stupid children progaming.... OMG

I would not mind paying the same. I want to have the choice.

I want to get the channels I want and be able to toss out the ones we don't.

These companies need to come on board and do it already....

[skeeterintexas]

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6Thialia6 wrote:

I am so ready to be able to choose my own package

I don't mind paying for it - but would save me from scrolling through crap that I don't watch and would just rather was not there

All the stupid children progaming.... OMG

I would not mind paying the same. I want to have the choice.

I want to get the channels I want and be able to toss out the ones we don't.

These companies need to come on board and do it already....

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So hide all the channels you don't watch. 

I would go crazy if I had to scroll through all of the sports, religious, childrens and home shopping channels that are included but I don't watch.

[oz_1 ACE - Wizard]

I still find it amazing that HD is an extra cost in this day and time since all OTA went HD and the fact every new TV set sold in the last couple of years has been HD.

[oufanindallas]

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6Thialia6 wrote:

I am so ready to be able to choose my own package

I don't mind paying for it - but would save me from scrolling through crap that I don't watch and would just rather was not there

All the stupid children progaming.... OMG

I would not mind paying the same. I want to have the choice.

I want to get the channels I want and be able to toss out the ones we don't.

These companies need to come on board and do it already....

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The problem with this is, the networks would lose a ton of money in this deal and your per channel rate would be so high you'd end us spending more than you are now for just a few channels.  Take the big 4 networks, they are on everyone's basic package,  let's say that they make $.05 per subscriber now.  During negotiations, they also require the providers to carry their "lesser" packages at a nominal fee.  In the case of ABC, they also have one of the highest priced channels in ESPN, followed by they other 3 ESPN channels and Disney and it's channels as well as ABC family.  These contracts are typically done together. 

With ala carte, ESPN went from being $4.34 per subscriber to closer to $25/$30 if you want to watch that one channel.  Disney has now gone to $5 for that ONE channel.

While some channels may be as low as $1 per channel, don't count on it because they won't have near the subscriber base so that removes their possible revenue making their deals with advertisers even harder. Pretty soon you'd be paying $10 for AMC and $15 for Discovery and $20 per network channel just to keep the same number of shows on the air now.

[Escapee]

It would be interesting if all channels were sold like HBO and Showtime. The carrier should be just that the carrier not the seller. The content provider should buy their way on to the carrier. The carrier would collect the fees from the customer for packages from each content provider just like they do for HBO and Showtime. Then if a channel wants to go up on the price it is the content provider that gets the blame not the carrier for dropping the channel. It may also stop the channel blout where the content provider has one great channel but forces the carrier to carry several more that very few people watch.

Content providers with Ads can decide if they want to offer their channel for free but they still pay the carrier to travel over their lines.

The main reason I support this is it would weed out a lot of the junk programming unless that is what customers want to pay for. What is produced and offered may not change much but you would know what people were willing to pay for and really want to see.  I am not much of a sports fan and it is amazing how often I can go through all the channels and not find anything I really care to watch not because I don't like a show but they are showing a repeat.

[oz_1 ACE - Wizard]

I am not so sure they would lose money if more subcribers came on board because they could afford a cheaper package while getting what channels they wanted.

If you look around the web you will see where a lot of folks do to the economy have cut the cable so to speak and try and get what they want from the web and ota.

I have installed a lot of antennas in the last 2 years and the number one complaint is they are forced to take a package to get the channels they wanted.

[mibrnsurg ACE - Geek]

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oz_1 wrote:

I still find it amazing that HD is an extra cost in this day and time since all OTA went HD and the fact every new TV set sold in the last couple of years has been HD.

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OTA did not go HD, it went all digital.  Still plenty of SD programming being shown on a digital signal.

Chris

---

Please NO SD stretch-o-vision or 480 SD HD Channels
Need Help? 1-800-288-2020, After he gets acct info, press # a bunch of times, get a menu from Mr. Voice recognition
Your Results May Vary, In My Humble Opinion
I Call It Like I See It, Simply a U-verse user, nothing more

[oz_1 ACE - Wizard]

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mibrnsurg wrote:

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oz_1 wrote:

I still find it amazing that HD is an extra cost in this day and time since all OTA went HD and the fact every new TV set sold in the last couple of years has been HD.

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OTA did not go HD, it went all digital.  Still plenty of SD programming being shown on a digital signal.

Chris

---

Please NO SD stretch-o-vision or 480 SD HD Channels
Need Help? 1-800-288-2020, After he gets acct info, press # a bunch of times, get a menu from Mr. Voice recognition
Your Results May Vary, In My Humble Opinion
I Call It Like I See It, Simply a U-verse user, nothing more

---

OK I might should have said that every station here in Houston has a HD and SD channel and some have a third and fourth.

[spd2demun ACE - Master]

But *technically* the fee for HD is for *HD Technology*, LOL!  I guess it's either pay that or pay PER BOX for HD like Comcrap?

I still think À la carte SHOULD BE AN OPTION for those who want it.  If they don't mind paying more, and just want certain channels, so be it.

[SomeJoe7777 ACE - Geek]

If any form of a-la-carte actully becomes reality, I have a feeling that it will be on a per-broadcaster basis. e.g. You can pay $19.95 a month for all the Viacom channels, $29.95 a month for all the Discovery Communications channels, etc.

Each network needs you to subscribe to all of their channels in order to both be profitable and maintain all the choices they have. Otherwise, they either wouldn't get enough people to subscribe to their less-popular channels (so they'd either quit producing them or the price would have to be outrageous), or they'd have to raise the pricing for even the popular channels so that the less-popular channels could survive by being subsidized.

[texasguy37 ACE - Champion]

Here is another interesting article about the effects of an la carte model for channels:

If the U.S. government mandated that TV channels be sold individually, only five to 10 traditional TV networks would survive -- destroying up to $300 billion of value, endangering some 1 million jobs and curtailing consumers' video choices, according to an analysis by Needham & Co.

The Department of Justice has launched an investigation into a range of practices among pay-TV and telecommunications providers, including data-usage caps and programming bundling agreements.

An a la carte regime for pay-TV would present tremendous risk to every company in the TV business, Needham & Co. analysts Laura Martin and Dan Medina wrote in a June 22 report.

"The government is a bull in the proverbial china shop with unintended consequences likely to destabilize the delicate work of the invisible hand, which is working today in the TV ecosystem," Martin and Medina wrote.

Without the ability to sell TV channels in a bundle to consumers, just five to 10 "hit channels" would be profitable enough on a standalone basis to survive unbundling, implying that 125 channels would become uneconomic to produce, according to the analysts. Needham surveyed 500 TV viewers to gauge which channels they would pay for in an a la carte model.

"Minority and special-interest channels would be unlikely to survive," Martin and Medina wrote. "Since the average household watches 12-14 channels each month, every household would lose channels that they believe are important to them. In an a la carte world, consumer satisfaction would be destroyed."

While a la carte would lower consumer prices in the short term, "it bankrupts all niche channels within five years, destroying enormous value for the highly diverse U.S. population and especially the smallest minority groups," the Needham analysts said.

According to Needham's analysis, with unbundling, TV subscription revenue would decline 15% to 20% and ad revenue would plummet 75%. Meanwhile, if content companies delivered content directly to consumers, they would incur customer service costs estimated at $50 per customer per year, or $5 billion nationally.

Needham calculated that 1 million workers -- typically middle-class Americans, according to the analysts -- are potentially at risk of losing their jobs with a U.S.-mandated shift to a la carte. Those include employees at cable operators, video employees of telcos, and more than 500,000 employees at media companies that depend on TV profits. "We believe that every job in these companies is at risk if the TV ecosystem is disrupted by the government because TV is the most material contributor to revenue in every case," the analysts said.

By contrast, over-the-top video distributors have a comparatively "tiny number of employees, most of whom have graduate degrees and live in large cities," Martin and Medina said. "These types of employees do not need government protection: There are many job alternatives for them."

The "invisible hand" of market forces is working well today, according to Needham, arguing that such companies as YouTube, Netflix, AOL, Yahoo and Hulu and are creating a "parallel, high-quality video business on the Internet."

"If [Internet video providers] work together to solve several tactical issues, we are optimistic that they can unseat the TV ecosystem over time," Martin and Medina said.

http://www.multichannel.com/article/486361-Pay_TV_A_La_Carte_Could_Put_1_Million_Jobs_At_Risk_Analys...

[Escapee]

I agree with SomeJoe but I wonder if some of those extra channels would drop off if you paid for the package from each company. When that company goes up in price the customer would know who to blame. Now the content providers with one or two great channels can add a channel or two of junk channels and the cable companies has to carry them and pay for them or catch it for dropping all the channels from that content provider.

[spd2demun ACE - Master]

These big channel holders need a wakeup call...if people want obsure (special interest) channels, let them pay extra for them, or dump them.

I'm tired of having irrelevant programming shoved down my throat as I'm sure others are, too.

The whole system needs an overhaul, this is not the 1950's!  Comcrap, I'm talking to YOU!

[hpmsrm]

Here I go again.....the old guy in the bunch......thinking back toward the beginning of cable service.  I don't think it was ever anticipated that cable delivery of program material to our homes would become so extensive or so dominent.  In its original form it was conceived as a way to provide programming not readily available through OTA outlets.  For example......broadway dramas, music concerts - classical, pop, jazz & C & W alike.  It was sold to local governments as a program service that would have a monthly charge but would be free of commercials & other sales pitches.  Traditional networks would continue to serve OTA.  Then cable & low-power repeater service began to spring up in communities located outside of the coverage areas of any of the limited number of TV stations.   Remember......UHF allocations did not come along until the early 1950's.   The whole cable industry just kind of grew like Topsy and eventually morphed into today's monster......with the addition of satellite systems and, most recently, IPTV services like U-verse.    Voice and Internet services were obvious new additions which could make good use of the now-in-place infrastructure.  Now here we are.  OTA is nearly dead.....  Coverage areas drastically reduced by the exhorbitantly expensive shift to digital transmission.  In my opinion I believe the funeral for OTA is already scheduled.  There are still numerous OTA stations in the Kansas City market.  Most of the main channels are HD but those that do have sub-channels are devoting them mostly to SD signals.   Is it a curse or a wonderful blessing?  We are not even hooked up to an antenna to receive any of them.

We recently dropped HBO/Cinemax.  Rarely watched any of the movies and only one or two of the original productions.   We wanted extra Internet speed.  So it was a cost trade- off.

We do watch quite a bit of TV.....the wife has her detective & mystery programs.  I have my history, science and news programs.....with a smattering of public TV thrown in for access to what tiny bits of classical music or good jazz it carries.  BUT we agree that at least half of the channels included in our U300 package are simply a waste of money and bandwidth.

But when the grandchildren are here.......or great grandchildren.......those seldom watched kids shows are well enjoyed.   SO.......how 'bout a system that simply charges a reduced basic fee for basic services and then make everything else a version of PPV?  Ya pays for what ya watches.  Just throwing out an idea.    An idle mind is a dangerous thing indeed.

[oz_1 ACE - Wizard]

OTA has been good to me as an installer with friends and neighbors facing a bad economy which the news does not give accurate unemployment rates anyway for some having to return to OTA with their new flat panels works out ok since they all have ATSC

tuners and the important channels are in HD.

[Escapee]

My memory of the hopes of early cable was the same as Phil. There could be a ballet or other low interest channels because a $1 or some other amount from all the people interested would be enough to support that small group. That was crowed out by all the junk channels when there were a limit of 30 or 70 slots that brought in the most money. Now that they have gone to digital and there can be a thousand channels that dream world may become possible. Now you have a channel that shows repeats like NCIS all the time. I like NCIS but the PBS type channels fail.

Why does your bill have to go up with a la carte it may not go down but you are paying for all the channels now.  As the report stated the internet such as Hulu and Netflix is giving the a la carte option now. The players could end up like Kodak by holding on the to the save past. They developed the digital camera but was afraid it would destroy their film golden egg so they put it on the back shelf. Other companies are making money with digital camers and Kodak was right digital cameras did destroy their film market.

[oz_1 ACE - Wizard]

If you read a lot of computer mags it seems every other month there is an article of cut the cable, which they really don't do they along with everyone else need an ISP but it is gaining in popularity whether big business wants to aknowledge or not.

[justicede]

I too would really like to see TV "a la carte" -- even if I did pay almost as much.  Seems like my cable bill goes up every other month.  Mine has almost doubled in the last year and a half -- altho I did up my programming from U100 to U200 (with no "extras").  The only reason I changed programming is because one of the dozen channels that I do watch regularly was moved to the higher tier.  Sure every time it goes up they add a channel here and there -- mostly Latino channnels (which I don't watch).  BTW, thank you for the "favorites" channel ability.  I am so fed up with paying more and more for crap I don't watch. I call it the welfare cable systems.  I too will probably dump it at the end of my contract and go with another carrier (I still have a "disc" on my roof).  At least I can "start at the bottom" with a good deal then -- for a while.