Best implementation of al-a-carte is to use the fav channel feature of your set-top box now to hide all those channels you never watch. Then, they can keep running in the background (invisible to you) generating revenues from their commercials that you never have to see. That commercial revenue is subsidy money (other people paying money to run those commercials) that helps keep our overall cost of television service as low as it is now. I've shown the approx. average subsidy per household before in similar threads. I estimate it at about $54 per household. For those that dream of commercial free, that would be about $54 per household to make up out of pocket.
It would be naive to do the math like this: $100/month cable bill for 200 channels = .50 (cents) per channel. I only watch 10 channels. My bill in al-a-carte world should be $5 per month.
The reality of al-a-carte world is that all the players would still want to make at least what they make now. So if we all selected only about 10 channels, I would expect those favorite 10 to cost us each about $100 per month (or about $10 per channel). But, since al-a-carte world would likely kill off a lot of those filler channels "I" never watch, the commercial revenue subsidies generated by those channels would cease to flow to content creators which would likely mean that either we pay a bit more in total out-of-pocket or the quality and/or breadth of programming that we do like would probably go down.
In short, I think al-a-carte world yields higher costs for us consumers (making up for the lost revenues of commercials running on channels we never watch) for much less breadth of programming options. I also think quality of programming would go down unless we all agree on our favorite 10 or 20 channels (which will never happen). I also think this would significantly up the risk for those who fund pilots of new shows such that the abundance of new shows will cease.
Don't get me wrong. I love the concept of it myself. It's just the implementation where it gets really messy. If we bend the dream to our desires as a consumers, it seems like it's a complete win (for us). But for us to "win" by getting a 90% or more reduction in our collective television service bills, somebody else in the chain takes a 90%+ loss over the "as is" model now. Knowing the middlemen- be that a Comcast or an Apple- will not take such hits- it seems that much of that would hit the content creators. If so, the quality of their output would likely have to go down.
I know the comeback is that they could just focus their reduced compensation on a fewer number of "really good shows" but then who gets to decide what is a "really good show"? Kardashians has a huge following. Is that a good show? Soap Operas? Hoarders? Honey Boo Boo? Etc. In thinking beyond our own situation, imagine how it would really play out. Who takes the hit so that we can pay only $5 per month or so? Is Apple going to lose money to do this? Is the tollmaster of our broadband pipe going to lose money? Who's left? If it's not us, it has to be the content creators. We have no-cost/low-cost "programming" available in abundance on youtube & similar. If our collective bills are going to be cut by about 90% or more, that's probably a good proxy for the new programming we can expect.
Yep. TV (speaking solely about the US experience) is much more complicated than music or telco. Hence why it's not yet been
cracked. Everyone (namely
the consumer, more namely
people in these forums) is talking about the same two things here:
a la carte and
cheaper fees. For some consumers, these two can align. But for most mainstream consumers, they will get the former but not the latter. As many have stated, content providers have zero interest in making less money than they are now. So how can they maintain - and potentially even grow - their revenue stream(s) while giving the consumer the control they desire? It will mainly be a 2-step process (with hundreds of little steps within). 1) Channel apps and 2) phasing/cutting out the middlemen (aka: service providers).
Channel apps would come in 2 flavors: free and plus. Example, NBC app may offer the consumer a limited menu of NBC programming (local news and other non-prime time programming). NBC+ app will offer some of the more "desirable" primetime content (Parks & Rec, The Voice, CSI Des Moines, etc.) on a seasonally-based fee structure. Look no further than CBS'
March Madness app as an example of how these channel+ apps could function. Once any given channel's seasonal programming ends, that app will no longer function, requiring the consumer to purchase said channel app's next season - if they so choose. A more streamlined approach would be to offer a channel app with seasonally-based in-app pricing options. And with users now not tied to their home television sets for consumption, content provider's channel app become more valuable. In my mind, the sweet spot for consumers, per channel app, per season is around $4.99-9.99 - with the HBOs of the world likely to come in at the higher $9.99 price point. Prices will not be prorated should consumers jump in mid-season. Thus, content providers will position
early season adoption as the best
value. At these rates, and with the number of channel apps most consumers would purchase on a regular basis, the content providers stand to reap the similar revenue they've grown accustomed to - with the potential to gain more form those with more basic cable packages.
In the above scenario, content providers and consumers look to be pretty happy. Who is missing out on all the fun? The exact same people that are most scared of the changes on the horizon: The middlemen. The service providers. The Comcasts of the world. While formidable hurdles with deep pockets, the writing is on the wall: adapt or die. And while they have diversified with home security and other short-term offerings, it seems focus was needed more than diversification -
if longevity is/was a goal (and I can't imagine it wasn't). Wether stationary (home) or mobile, cable/satellite companies should have focused on owning every facet of broadband delivery and not spread themselves thin trying to fabricate value on top of what it is they really peddle: broadband. They're not unlike any other
utility company. But it may be too late. With the AT&Ts of the world better equipped to serve the mobile consumer, hitting a stationary consumer in their home (which they are already doing) should prove a no-brainer. Adding even more pressure on the Comcasts.
** Slightly off-topic: Why don't the major Hollywood studios forego the HBOs of the world and simply offer their own apps? Like a Paramount or Sony Pictures app? **
Clearly, all of the above is pretty broad strokes - undoubtedly chockfull of holes. So please, poke away. That's what makes this such a great community.