Cable a la carte - they're still not getting it

Wired News has an article today about cable a la carte, that is being able to subscribe to and hence only pay for the channels you watch. The big cable companies apparently don't want this and are arguing against it strongly. The prime reason they cite is that many channels will simply wither and die because they don't have enough viewers to attract advertising and pay their way. Currently, they say, the big network channels they carry in their service bundles help subsidize the smaller guys until they grow large enough to attract more advertising. If forced to offer a la carte the big cable companies claim it will actually drive up the cost of the average bundle of services - people will have to pay more for less!

Personally I simply don't buy it. The reason is that it is usually the smaller independent channels that people will dig into their pockets to view - if only they had the chance. If the subscriptions paid for these channels went directly to them then there wouldn't be a need for expensive advertising to make them viable. I believe the true problem is that currently the big TV networks are charging the cable companies an arm and a leg to carry their programming. This means that as much as popular channels might be subsidizing small ones they are also driving up the overall cost of packages.

What is happening now is that the big networks are pressuring the cable companies to resist opening up their systems to competition that might drive the price down. As viewers become more selective about what networks they subscribe to the amount of money available to TV networks will fall and their need to raise more advertising revenue will increase. That's exactly what they wont be able to do since advertising revenue is basically proportional to viewership of a channel.

I saw that cable networks are simply being bone headed about the whole a la carte deal. They can have their cake and eat it if only they let viewers pay be the amount of TV they actually watch. Not just the number of channels, but the actual hours of TV. Right now I don't subscribe to cable and so long as I have to pay for something I'm not watching I never will. For instance I wouldn't want an a la carte cable package if I had to subscribe to Fox just to get The Simpsons once a week. I'd sooner poke my own eyes out, but if I could just pay $0.50 to watch The Simpsons every week then fine. While I don't have an ethical objection to subscribing to HBO, and many other channels I still don't want pay for programming I never view.

Basically the current non-a la carte cable packaging system is not economical efficient for the consumer because those who only watch a few channels and a small amount of programming are subsidizing those who gorge on many hours of cable every day. That's a win-win situation for the cable companies, but a lose-lose situation for many viewers. Therefore its clear to me that the cable companies position is anti-competitive and backed by TV networks who don't want viewer choice and competition to have more influence on their revenues and squeeze them out of their cushy subsidized positions in cable packages.