Now? Now that Zero TV households are increasing and cablecos are starting to panic? Whazzup, John? What do you really have in mind?
Pay No Heed to John McCain’s TV Unbundling Bill
AArizona senator John McCain made some headlines yesterday when he announced that he will introduce a bill that, among other things, would force pay television providers to offer channels a la carte. This announcement qualifies as news around here now that the SEC is a major partner in a TV network.
Being able to pay only for the channels you want and not those you don’t watch is a common dream of cable and satellite subscribers, but the providers offer channels in bundles for a reason. In part, yes, it’s to get people to subsidize channels they don’t watch. It’s also to help keep those channels in business via regular, reliable revenue during times when popular series are not airing new episodes. Providers like Time Warner and Comcast themselves own networks, so they have a powerful incentive to keep this business model going. Hence, McCain feels the need to use legislation to fix what he sees as the problem of bundled channels.
It’s well known that sports channels are the most expensive. This chart from 2009 shows average wholesale prices per subscriber for 177 pay TV channels. Seven of the top 10 most expensive aired sports programming at least some of the year in 2009. According to Derek Thompson of the Atlantic, about $30 of a typical $80 cable bill pays directly for programming, and about $12 of the $30 goes to sports. Peter Kafka of All Things Ddid a quick calculation that said, given ESPN’s current $5+ per subscriber fee, the main ESPN channel alone would cost above $20 in an a la carte system to keep its current revenue level. Sports networks charge so much because they can. Live sports are increasingly the only kind of programming that interested viewers choose to watch live every single time rather than record or watch online later. They are the pillar holding up the business model.
It would be an enormous change for the industry if McCain’s bill passes. Uncertainly along these lines could easily be a part of why the league reportedly does not own a piece of the SEC Network. However, this bill won’t pass.
In other words, the writer above believes this is just a ploy to give McCain a few headlines and remind folks he exists. But what if it’s something darker than that? What if, in the guise of “punishing” the greedy cable companies he’s actually saving them from by making their services so delicious that we will no longer want to cut the cord?
Yep, that’s gotta be it. A plot! To keep us under cable company control! Zero TV-ers, to arms! To arms!