US cable TV may unbundle to stem tide of Internet video
updated 12:30 am EDT, Wed September 28, 2011
US cable TV wants channels unbundled
US cable and satellite providers signaled Tuesday that they wanted to unbundle their channel packages to stave off the incursion of Internet video and a tough economy. DirecTV, Mediacom, Suddenlink, and others are pushing the FCC and others to alter retransmission fee systems and let them sell access by the channel so that they can lower the actual cost of selling TV services. At costs as high as $4 per month just for ESPN and now with normally free-to-air networks charging for access, they argued to Reuters and others that they were forced to charge high prices.
Among the complaints was that requirements for local carriage meant broadcasters could lord this over TV providers to make them carry premium channels they didn't otherwise want.
The FCC hasn't formally responded to the calls.
Cable and satellite providers haven't been entirely innocent in the debate. Many of these firms often institute yearly or twice yearly rate hikes, even if their profit levels continue to expand. They have also frequently been the staunchest opponents to net neutrality. Some of the biggest firms, such as Comcast, are also now intertwined with TV studios whose corporate owners might object to a la carte channels as it would force them to cut niche channels or lose exposure.
Even incumbents, however, have acknowledged that they may need to lower the practical costs of TV subscriptions to keep users. While very rare declines in recent months were first explained away as those hit by the economy, Comcast and Time Warner Cable have eventually had to acknowledge that at least some of the 1.2 million customers they lost in the past year had decided that iTunes, Netflix, and the web were providing enough TV at a much lower price. Even multiple season passes on iTunes can typically cost less spread out over months of viewing than TV packages that can sometimes break the $100 mark each month.
Studios and close partners like Hulu have tried to prevent cord-cutting, or switching from legacy TV to online viewing, by blocking free access on TV-friendly devices or by preventing services like iTunes and Netflix from getting access either to every show or in a timely fashion. The tactic has so far had only muted success as they sometimes encourage piracy or hacks.
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It's ironic that a downturn in the economy might end up saving cable TV customers some money. I've always detested paying for channels I have absolutely no interest in.