Forrester Study Says a La Carte Is Uneconomical, Won't Shield kids
By John Eggerton -- Broadcasting & Cable, 6/4/2007 6:53:00 AM
Turns out that cable households where kids channels like Disney and Nickelodeon are regularly watched are also particular fans of channels with adult content, like HBO, Comedy Central, and Spike TV.That’s according to a survey from Forrester Research--being released June 4--that concludes that a la carte isn’t the answer to parental control or, for that matter, economically sustainable.While the study found that a little over half (53%) of 2,895 cable homes polled are interested in a la carte, they aren’t interested in paying more than $24 and change for a “simulated” bundle of 26 channels they picked themselves, or about half of what they pay for cable service now. Granted that works out to a lot more than they pay on average now for their 100-plus channels. But it also works out to paying only about a dime per hour for cable programming, a model that is not sustainable says James McQuivey, who prepared the report for Forrester.Asked why the study did not suggest a range of real-world prices for the channels, McQuivey said that the they didn’t know what price to suggest “for the same reason that the cable companies don’t know how to price channels a la carte – the demand curves for these channels (other than premium channels) are completely unknown.” The study actually was done last year when Senator John McCain was pushing hard for a la carte. It was put on the back burner when McCain backed off a bit, says McQuivey, then revived after the FCC released a TV violence report that included a call for a la carte.And even though FCC Chairman Kevin Martin has been pushing for a la carte as a way to give parents a tool for shielding kids from violent or sexual content, the report concluded that, for example, 42% of cable households that regularly watched Nickelodeon also watched Comedy Central and 39% also watched Spike TV. Rather than a la carte, which McQuivey says would do more harm than good, he suggests the industry could offer “smarter” bundling of family, sports, and news, to appease the FCC and Congress.
