[telecom] The Smart TV Viewer's Bill Of Rights

Quoting the article:

This sounds like the latest iteration of the old cable TV "a-la-carte" discussion: pay for only the channels you watch. The market for television programming doesn't work that way. If you subscribe to cable or satellite TV, you're part of the audience for every channel on the dial even if you only watch five of them.

Advertising rates are based on "net paid circulation," and every subscriber is part of the circulation for every channel. The advertiser is paying for the right to reach you even if you never watch his advertisements. Not surprisingly, then, programmers all want their programs carried on the basic tier, and they contractually prohibit anything that smells like a-la-carte.

Parenthetically, there's been an ongoing discussion within the cable TV industry about moving all sports programming to a separate tier. This, of course, has raised vehement opposition from ESPN et al. Several cable TV companies support the idea, but so far, the programmers are winning the battle. It will take an Act of Congress (literally) to change the situation, and Congress seems to have little interest in getting involved in such a hot-button issue.

In any case, internet TV blows up the whole business model. There's no such thing as "basic" service; every program has to stand on its own as a separate retail product. So of course the programmer is going to charge more for each program.

Bottom line: you're not going to get internet TV programming at the same per-program price that you pay when it's part of a larger package.

Unless, of course, you're happy watching cats, babies and skateboard wipeouts.

For more on the a-la-carte issue, see my blog at:

Neal McLain

Part of the trouble with net based video is the insane copyright issues. Netflix Watch Instantly is a perfect example - videos now come with expiration dates. Or they'll have one of a series of videos but not the others because the copyright holder thinks they can extract more dollars our of DVD and Blu-Ray sales.

Under current law, no cable or satellite company can legally release any "personally identifiable information" to any third party without the subscriber's permission. According to the FCC:

| "Finally, your [cable TV] provider may not disclose any of this | information without your written permission. If you are damaged | by your cable provider's violation of any of these requirements, | you may sue your cable provider in federal court."

| Source: FCC Guide "Protecting Your Privacy." |

Whether or not disclosing the channel to which customer X is watching at a given moment constitutes of violation of this prohibition is not for me to say. But imagine the firestorm that would break out if cable TV operators actually tracked viewership at that level of detail. Every self-proclaimed consumer-protectionist outfit from the ACLU to Consumers Union to the FTC to state-level CUBs would oppose it. Rush Limbaugh would throw an apoplectic fit: "The government is spying on us!"

Many local franchise agreements contain similar language. This was hot-button issue during the Great Franchise Wars of the '70s and '80s: conspiracy theorists were spreading all sorts of nonsense about how this new thing called cable TV would allow big corporations to spy on you. One crackpot even claimed that a TV set hooked cable TV could be used to watch you.

I recognize that this may change in the future. It's certainly possible that changes in technology and federal law may permit the business model you suggest. It just hasn't happened yet.

You may be right, but I have a hard time believing that any advertiser would pay 1000 times more for an ad spot in an internet-delivered program than he'd pay for a spot in a non-broadcast program delivered by cable TV.

Well, sure. But I was comparing two methods of delivering and charging for video programming.

Neal