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A la Carte Is Public 'Bad' - Broadcasting & Cable

A la Carte Is Public 'Bad'

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Turner Broadcasting System Inc. used a Mickey Mouse analogy to argue that a la carte cable pricing would be bad for business and for consumers.

Bundled cable services are a "public good" that would be done a disservice by forced or even voluntary a la carte, Turner argued in comments to the FCC.

In this instance, "public good" is not an accolade but the economic term for a product with heavy up-front costs that "far exceed" the cost of adding additional products and services.

A la Carte supporters have argued that since people only watch 17 cable channels on average, they are being "forced to buy a lot of programs they don't watch to get the ones they want," as Mark Cooper of Consumers Union/Consumer Federation of America put it.

Instead, says Turner, using an economic analysis to back up its argument, the better analogy would be Disney World.

"A visitor to Disney World," says the study, "pays a fixed fee to enter the entertainment park, and does not receive a rebate should she simply ride It's a Small World After All before exiting. The die-hard fans who show up at dawn and experience every ride, exhibit, and show they can take in before closing pay exactly the same fee."

Turner contrasted that with the grocery store analogy used by a la carte proponents, which it said was not germane, since with stores total coasts are largely for goods sold, while the cable business is primarily infrastructure costs.

"High quality video programming is extremely expensive to create," argues Turner, "and bundling is the most efficient way to price and distribute it. Undermining efficient distribution would not benefit consumers; instead, they would pay more for less."
If the FCC is looking for an out-of-whack business model, says Turner, it should look at must carry/retransmission consent, which it says has allowed stations to gain carriage without incentive to increase programming budgets or quality.

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