TW Cable CEO: Programmers Oppose Smaller Channel Bundles [telecom]

In article , Neal McLain quotes a Dow Jones article reporting a statement by the CEO of Time Warner Cable:

I'm really curious about this (oft-repeated) claim, and where I can find some actual evidence to support it. Currently on my TiVo, I have about 170 of the 200-odd channels I receive programmed out. (Of course, if I had a Comcast box instead of a TiVo, I couldn't do that!) Yet, because of tiering, I still have to pay about $80 a month. How much would 30 channels actually cost? (My only previous reason for opposing mandatory a-la-carte has now been eliminated by cablecos encrypting all of the basic tier.) What if I were permitted to turn down broadcast-basic channels that I don't watch but which demand high retrans-consent fees?

Clearly the elimination of hidden cross-subsidies would drive some specialty channels with minuscule audiences and poor business models out of business entirely. Would this be a bad thing? Perhaps, if the half-dozen or so program providers[1] were actually forced to compete with each other, the result might actually lower consumers' costs -- and it might be the only way for the cable ecosystem to compete effectively with independent program producers bypassing their distribution channels entirely. (I know several people who subscribe to data but not video service, and get all of their video entertainment from Netflix.)

-GAWollman

Did you read the blog that I cited at the end of my post? I addressed this question indirectly by explaining the impact that mandatory a-la-carte would have on the production budgets of non-broadcast advertising-supported programmers. Whether or not such an impact would or would not "work in favor of consumers" is debatable, but it's nonetheless real.

Based solely on license fees, somewhere between zero and $30/month. But, as I noted in my blog post, the cost of delivering those 30 channels to your TiVo is substantial. Furthermore, delivery costs are largely independent of the number of channels. The incremental cost of delivering 200 channels is small compared to the cost of delivering the first 30 channels.

By "broadcast", do you really mean broadcast signals, as in secondary retransmission of the signals of licensed broadcast stations? Or are using the word as generic term for all programming you receive from your CATV company?

If the former, note that, under federal law, CATVs must carry most local broadcast stations on the basic tier (the "must-carry" rule). Under certain conditions, federal law also allows broadcast stations to demand cash payments, or other forms of compensation (the "retransmission consent" rules). Either way, the CATV company is required by law to deliver most broadcast signals to your TiVo, and station licensees are authorized to charge whatever the market will bear. (I use "most" because some LPTV stations do not have mandatory carriage rights.)

That said, I sometimes ask the same question. I'd love to find out how many subscribers would pay $1.00/month for, say, Univision.

"Minuscule audience" doesn't necessarily equate to "poor business model." Three of my favorite Dish network services are C-SPAN, RFD-TV (for "Trains and Locomotives") and Metropolitan Opera Radio. All three are non-profits. Their audiences may be minuscule, but I don't think you can accuse them of being poor business models. Losing them would be "a bad thing" for me.

If you cut the revenue earned of a program provider by, say, 50%, does it curtail its production budget by 50%? Or does raise its wholesale price by 50% to compensate for lost revenue?

How may independent program producers offer their products over the internet for free?

What's the monthly rate for an internet connection capable of carrying an HDTV signal?

Hey, if you're happy with Netflix, nobody is going to object.

CJR has a comprehensive compilation at