The following is a guest blog by Larry Kasanoff, CEO of Threshold Entertainment Group, whose programming units include Threshold Entertainment, Threshold Animation Studios and Blackbelt TV, the martial arts TV network.
Sen. John McCain, one of our country’s most respected war heroes and influential public servants, has gone Hollywood. He is orchestrating a potential piece of legislation called the “Television Consumer Freedom Act of 2013,” which he proudly outlined in a recent L.A. Times op-ed. On the surface, the Television Consumer Freedom Act sounds appealing because, in theory, it promises to save consumers money. (Anything with the word “freedom” in it has to be good, right?) Yet underneath this piece of legislation, Sen. McCain not only threatens businesses like mine, but more dangerously, limits entertainment options for American consumers, and actually forces them to pay more for less. Let me explain.
In Sen. McCain’s plan, you can “cherry pick” which cable networks you want, so you won’t be forced to watch ESPN if you don’t like sports, or Bravo, if you don’t like Housewives. But this “pick and choose” option isn’t all it’s cracked up to be. Currently, your cable, satellite, or phone company buys lots of networks and bundles them for you to keep costs lower. In essence, they follow the Sunday brunch model, offering lots of options to attract more customers. You may want the smoked salmon, your kids might want the waffles, your wife may want the egg white omelet and none of you may want the granola, but it’s all there. Their ability to buy in bulk means you eat more for less.
If this bill passes, the 500+ channels you have now will wind up being nothing but eggs and toast — and depending on your viewing habits, may cost you more money. I know you probably think cable costs are high now (I would agree), but if this bill passes, the cost per network, and your cable bill, will escalate. Sen. McCain’s plan will kill independent networks in the U.S., limit consumer choices and make programming way more expensive.
Not so long ago, MTV and ESPN were fledgling networks. It was only with time and innovative programming that the networks developed into two of the most iconic and powerful of their generation. How many of us have flipped through channels, stumbled upon a show and instantly become absorbed purely through the magic of channel surfing? Call me old-fashioned, but I like channel-surfing. It leads to discovery — and often to the Discovery Channel — which by the way, now, thanks to McCain, might cost you $97 a month to watch. I hope you like Shark Week.
This new plan means we’ll likely miss out on great shows because we may not be able to find them. And, without the chance to establish a substantial audience, many shows will never even make it on the air at all. I know this because I run an independent TV channel, Blackbelt TV, the World’s Martial Arts Television Network. We broadcast martial arts fights, movies, entertainment and original programming in 45 countries. Martial arts is the world’s fastest growing sport – and while we have been gaining distribution throughout the world, including Europe, Africa, Latin America, Asia and parts of North America, the toughest market has been, without a doubt, the United States.
U.S. distribution for independents is already next to impossible, largely due to the unfair and outdated imbalance provided to broadcasters with retransmission consent (this is a fancy way of saying your TV provider pays a fortune to local affiliates so you can watch the six o’clock local news — another example of a law making you pay more for TV). While Sen. McCain’s bill may seem to be intended to address some of those problems, it will likely backfire and instead, have a devastating impact on independent networks. A bill that incentivizes MVPDs (multichannel video programming distributors) to add channels on an à la carte basis will railroad independent networks. New networks need the benefit of being part of widely distributed cable tiers so they can build an audience. Aren’t we supposed to encourage entrepreneurs in an economic recovery?
If this law were to take effect, powerful conglomerates like Viacom, Disney and Fox will exert leverage and excessively price their highly-viewed channels like ESPN, MTV, FX, etc., forcing smaller, niche independents, who do not have such leverage, to either settle for the crappy à la carte model or close their doors entirely. This new law will cripple networks not yet widely distributed, or unable to generate sufficient viewer awareness, or revenue, to survive. The model simply does not work for independents, and it doesn’t work for consumers. (I’m sure many senators won’t like it either when C-SPAN is dropped, because not enough people watch it.)
Finally, is “TV cherry-picking” something our free speech, capitalist government should be legislating? Consumers already have lots of choices — cable, satellite, phone companies and now Hulu, Netflix and others to address various needs in the marketplace. Attacking Hollywood always makes a great story for politicians, but maybe they should leave the storytelling to us and focus on other things, you know, like war, poverty and pollution.
I like Sen. McCain, but I’m surprised he is spending his time on this. I urge Congress not to set up another unfair impediment that will adversely affect independent voices. Having fewer choices at higher prices is not my definition of “freedom.”