Martin Pitches À La Carte to Advertisers
By John Eggerton -- Broadcasting & Cable, 1/18/2007 6:19:00 AM
FCC Chairman Kevin Martin used a speech ata Association of National Advertisers conference in New York Thursday to continue his push for a la carte programming, this time offering an advertiser-centric argument that made him sound like a Madison Avenue exec pitching a new campaign.
While he touched on content issues--indecency and violence, a "family hour"--and a new Childhood Obesity task force that is teaming advertisers with industry and government to address that growing health crisis, those appeared to be set up for the bulk of his speech, which laid out his ad community-flavored case for a la carte cable programming.
Saying it would be technologically simple for cable or satellite to offer a la carte programming, Martin said that he was surprised some advertisers would balk at the prospect.
Martin argued that advertisers should be eager to understand who is willing to pay for a channel given that, in terms of ratings, "for second and third-tier cable channels, there really are no good approximations of actual audience. For some channels," he said, "it is uncertain whether viewership is in the hundreds of thousands, tens of thousands, thousands, or really whether anyone every watches the channel at all."
He argued that providing cable channels a la carte would "decrease the uncertaintly for dvertisers and their clients about the viewership of smaller cable networks not covered or not accurately covered by Nielsen."
Also, playing to the issue of "granularity" of data that makes advertisers salivate, Martin said that a la carte would give advertisers more information on the "characeristics of their potential audience." Martin sounded more and more like a Madison Avenue type as he apointed tout ath would mean advertisers could "target ads to the demographic composition o fhte audience more effectively."
Martin said he did not think TV viewership would decline under an a la carte regime, saying that "It goes against common sense to believe that if consumers were able to purchase only the channels they want, they will watch less TV. Are they going to read a book or mow the lawn instead," he asked, "because there is less clutter to sift through on their TV? I don’t think so."
Martin has argued that a la carte will give viewers more control over the channels they let into their homes, including ones with content they deem inappropriate. Cable argues that it is an untenable economic model that will hurt niche channels that benefit, even survive, via the sampling they get from being packaged with must-have networks like ESPN, much like a small store in a mall with Macy's and Nordstrom's to drive traffic past their storefronts.
Martin says bunding is more like forcing consumers to buy 200 magazines or none at all.
National Cable & Telecommunications Association VP, Communications, Brian Dietz responded: "Numerous economic analyses, including the FCC's own economists, have concluded that a la carte would harm consumers by driving up prices and eliminating channels that serve minority and niche audiences," he said. "The FCC has also reported that consumers enjoy more choice, more programming and more services than at any time in history. We agree with these findings that the marketplace is working."
Martin commissioned a second study as chairman that countered that first a la carte study--released under his predecessor, Michael Powell. Martin's study, by contrast, found a la carte to be economically feasible.
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