A La Carte Faces Resistance

Dec 13, 2004  •  Post A Comment

An a la carte pricing model, in which viewers pay only for their preferred channels, might face consumer resistance, according to the annual Beta Research survey of basic cable viewers. The study found most viewers unwilling to pay more than a dollar per month for channels they regularly watch.

The findings echo a Federal Communications Commission study released Nov. 19 that concluded an a la carte system could lower bills for some subscribers while raising bills for others and drive niche channels out of business (TelevisionWeek, Nov. 22).

The FCC study drew ire from a la carte proponents Sen. John McCain, R-Ariz., who argued his pricing model is more consumer-friendly, and the Parents Television Council, which seeks to isolate channels with objectional content.

In the Beta study, viewers were asked to suppose each cable TV channel had a separate monthly fee and, if sold by itself, how much the channel would be worth to their household.

Among the viewers of any given network, results found on average that 27 percent were not willing to pay a separate monthly fee, 16 percent would pay less than 50 cents, 11 percent were willing to pay less than $1 per month and 46 percent were willing to pay $1 or more.

Among total cable subscribers-including subscribers who did not regularly view a network-the number of subscribers willing to pay a fee of $1 or more dropped to 17 percent.

The study did not ask whether subscribers wanted an a la carte pricing menu, which other studies have indicated consumers favor. The study also described the fees as “separate monthly charges,” not reflecting the possibility the charges could be contained in an lower overall monthly bill under a different model.

The channel most valued by respondents was ESPN, with an average total value of $1.20 per month. The ESPN figure is actually less than half of what cable subscribers currently pay for the network-an average of $2.61 per subscriber.