In
an ideal world, television viewers would only pay for those shows and
channels that they actually care about. The concept, known as TV a la carte, has been a pipe dream of cord cutters
and disgruntled cable subscribers for years. Thursday the movement
received a significant boost from an unlikely political ally: John
McCain.
The Arizona Senator introduced a new bill, the Television
Consumer Freedom Act, that would present incentives to both cable
operators and television networks to let consumers choose the channels
in their subscription. Right now, all customers pay substantial
“carriage fees” for the most popular channels—ESPN is pegged at about $5
per subscriber—whether they want them or not.
The biggest change would come in the way networks sell
their channels to cable operators. Right now, media companies like
Disney and Viacom sell their channels in bundles, forcing operators to
pay for third-tier networks in order to get access to ESPN or
Nickelodeon. Cablevision is currently suing Viacom for the practice.
McCain’s bill would force the networks to unbundle their
products, theoretically allowing cable operators to be more thoughtful
in their channel selection and pass the savings on to consumers. In the
past, though, television networks have argued that bundling channels
allows niche programming to exist when it would otherwise be
economically unfeasible.
The bill “is about giving the consumer more choices when
watching television,” McCain said on the Senate floor. “It’s time for us
to help shift the landscape to benefit television consumers.”
While the bill requires networks to unbundle their
channels, it only encourages cable operators to offer consumers a
similar luxury. Cable companies that refuse to offer channels
individually would lose out on a special compulsory copyright license
which allows them to air content from broadcast networks for a set fee
without getting tangled up in individual channel negotiations, as they
do with cable networks.
In another potential blow to the broadcast giants, the bill
also gives them less leverage against controversial startup Aereo, a
streaming service that digitizes the over-the-air signals of the
broadcast networks without paying them. In April, a Fox executive threatened to pull the channel off
the broadcast airwaves if Aereo was not shut down by the courts, but
McCain’s bill would revoke a network’s broadcast license if it offered
different content for cable subscribers and viewers receiving
over-the-air signals.
With clauses aimed at both television networks and cable
and satellite operators, the bill isn’t likely to find many supporters
in the traditional television industry. Despite very public spats
between these entities when they negotiate carriage fees, the two sides
have created a highly lucrative relationship based on the idea of
selling consumers more content than they need. “I’d be surprised if this
thing isn’t opposed by a lot of very strong forces,” says Harry Cole, a
communications lawyer at Fletcher, Heald and Hildreth.
There’s also nothing in the bill that explicitly obligates
cable companies to make their a la carte pricing affordable. In the same
way that they make cable and Internet bundles more financially
appealing than buying the two services separately, operators might
choose to make individual channels so pricey that consumers stick to
bundles anyway.
The TV a la carte movement might have more success in the
online space. The niche programs that networks lament would be squeezed
out in a cable shakeup are already staking out ground online, with
everyone from Netflix to Amazon to Microsoft investing in original
content. Aereo, which launched in New York last fall, is expanding to
Boston next week. Meanwhile, Google’s YouTube announced Thursday the
introduction of a pay service where people pay as little as $0.99 per
month to subscribe to individual channels.
“This bill is being drafted against the backdrop of technology which
is accelerating rapidly every day,” Cole says. “At no point is the
development of video distribution technology going to stop long enough
for John McCain or anybody else to come up with the ideal language that
will best serve all interests.”
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