If CBS and HBO are going to charge people for broadband access to their programs, why won’t CBS and HBO let their cable partners offer their subscribers the same option – to choose to pay for CBS or HBO separately?
Neither the American Cable Association nor its constituencies are ever going to help swing an election, which means the ACA doesn’t have as much political pull as it might desire. On the flip side, that gives ACA president Matt Polka and his colleagues the impunity to say things that aren’t politically expedient, such as, “ACA has a simple message for CBS: Why won’t you give cable subscribers the same rights you’re evidently giving broadband customers under the ‘CBS All Access’ plan?”
Yeah, why won’t you?
We know the answer, of course. Today, cable operators have to run local broadcast stations, and broadcasters are making them pay ever more dearly for the privilege with each successive retransmission consent contract. Everybody suspects that broadcasters will make much less money if viewers get to choose to pay for each of the major broadcast networks, because everyone expects that tens and tens of millions of viewers won’t.
Sens. Jay Rockefeller and John Thune were proposing giving viewers this choice just a few weeks ago with their Local Choice rider to the STAVRA (formerly STELA) bill. It was an idea so heinous and repugnant, so untenable, so perverse, that Rockefeller and Thune withdrew it rather than offend their Congressional brethren.
And here we have CBS doing it. (Let’s not forget that CBS is charging for something it otherwise gives away for free. What a gift broadband is, no?)
So CBS plans to charge $6 a month for broadband access. Add in Hulu+, in which ABC, NBC, Fox and CW participate, at $8 a month, and you get the broadcast networks for $14. Unless CBS is successful, which will doom Hulu+, as each of the participating networks pulls out of the partnership as soon as contractually possible, so that they too can get $6 a month, instead of just $2 or thereabouts.
So it’s not unreasonable to expect that the average viewer might eventually have to shell out $30 a month for the broadcast channels, and we haven’t even begun to consider the cable channels.
Add in HBO for $15 a month (that’s a guess), and now that HBO has gone first, expect everyone else who can get away with it to follow suit. CBS’s Showtime for another $6 or $8 a month? AMC for another $12 or $15 a month? FX for $10 a month? MTV, and VH1 and Nickelodeon for $12 each?
It’s easy to imagine viewers might end up paying more for 8 channels in the near future than they do now for 300. And what can ESPN get? $50 a month? $100?
Some people are going to love a la carte.
Now consider the hundreds of channels that don’t have quite the viewership numbers to sustain a business selling subscriptions. Some people expect a lot of the marginal channels will die.
As likely, however, is the possibility that cable operators will keep offering bundles of hundreds of these channels, supplemented by the most popular channels, which will carry a separate, a la carte subscription fee.
It’s easy to imagine a cable operator offering 250 or 300 of the lesser-watched channels, plus any two, five, or 10 a la carte channels for $15/month, $25/month, or $50 month, respectively, to help people keep their a la carte prices down.
It’s also easy to imagine a cable tier of broadcast channels, priced at a discount to the $6 per channel the broadcasters themselves would charge. The broadcasters would have to compromise, however, so there’s that to consider.
One other thing to keep in mind: when broadcasters have retrans arguments with cable operators, they are no longer just blacking out TV signals, they’re also getting away with blacking out broadband access.
However this plays out, it’s not going to be easy, or pretty.
Filed Under: Industry regulations