Understanding the Costs and Benefits of ‘A la Carte’ Cable
Deadline:
3/09Summary
The desired study would be a comparative analysis of approaches to bundling and unbundling video products (e.g., traditional TV channels, pay-per-view), in order to evaluate the benefits and costs to consumers of each approach. This study would be instrumental in advancing a contentious and largely data-free debate about the consequences of debundling programming—a debate that divides not only industry but public-interest advocacy groups
Purpose
To ground the contentious and growing debate about ‘a la carte’ cable—the debundling of channels and programming—in an analysis of the costs and benefits of different proposals to consumers.
Contact
Proposing Organization
Consumers Union, publisher of Consumer Reports, is an independent, nonprofit testing and information organization serving only consumers. We are a comprehensive source for unbiased advice about products and services, personal finance, health and nutrition, and other consumer concerns. Consumers Union is active in promoting a fair and just marketplace by empowering consumers to fight for better and more affordable telephone, cable and Internet services and equipment.
Location of Work
Topic(s) of Work
Broadcast rights, Regulated Content, Children’s media, Educational Media, Sexual content, Violent Content, PEG Cable Access, Cable TV, IPTV (internet TV), Satellite TV, Film/Television Production, Comparative research (international), DC AdvocacyDescription
The desired study would be a comparative analysis of approaches to bundling and unbundling video products (e.g., traditional TV channels, pay-per-view) in order to evaluate the benefits and costs to consumers of each approach. This study could be instrumental in advancing a contentious and largely data-free debate about the consequences of the debundling of programming. With the rise of internet video distribution and the prospect of full IPTV services, these debates are likely to grow more intense.
In the US, cable and programming conglomerates argue that bundling programming is crucial in order to offer more diverse programming to consumers and to keep costs down. Companies cite transaction costs associated with advertising individual channels and equipment costs to disaggregate channels, among others. Yet other countries have offered more choices through traditional cable services, and gone much further in experimenting with debundled IPTV services. In Canada, cable offers a variety of à la carte and related packages (choice of 10, 20, 50 channels from a menu at differing prices per channel or package) for its digital service. Singapore has a fully debundled IPTV provider. Experiments in other countries may be more revealing.
The issue also divides the public-interest media advocacy community, where arguments for greater utility to consumers meet concerns that a debundled marketplace will further skew content toward affluent, white consumers.
The FCC has analyzed this issue twice in the last 3 years and reached different conclusions on consumer impact; the GAO looked at mandatory à la carte 4 years ago. But there has been little or no meaningful scholarly analysis of this issue in recent years. And the Internet may be changing conventional wisdom, if programming can be "searched" just like other Internet content.
A comparative analysis that looked at the array of models and national experiences in this area could advance this debate considerably, and provide a much clearer picture of the public interest in this area. Consumers Union and other media advocacy groups are well positioned to use such findings.
A economics, communications, or law journal article would be one appropriate output. The subject may also lend itself to broader treatment, given recent experience with music and digital distribution. It will also be important to provide one or more short-form versions that can be circulated in different policy contexts.
The meaningful timeframe for this work on the advocacy side is approximately one year: March 2009.
If an interested party would like to post such a list to the Research Hub, we will provide acknowledgement, $100, and an SSRC mug!