News From Terre Haute, Indiana

Letters

July 7, 2013

FLASHPOINT: Time to stop paying for TV you don’t watch

When you go to a restaurant for a burger and fries, you only pay for the items you order. You don’t pay for the entire menu. If you are a cable television subscriber, however, you are paying for dozens of channels you don’t watch and don’t want. That’s because cable TV giants, such as Comcast and Time Warner, still sell their product in bundles of channels, reaping the benefits of charging consumers for channels that aren’t supported by public demand.

The Government Accounting Office reports cable TV prices have jumped 33 percent in eight years, even though the Consumer Price Index has risen only 15 percent. Projections are that rates will climb at 6 percent each year. The average cable viewer is charged for more than 100 channels delivered by the distributor but watches only about 18 of those channels.

Content providers like Disney and Viacom bundle channels when negotiating carriage agreements with cable companies. Viacom, for example, provides CBS and Nickelodeon content, but bundles less popular channels like VH1 into any sales agreement. Disney bundles ESPN alongside A&E, even though sports fans might never tune to A&E. Cable giants Comcast and Time Warner own many of their channels, so a Comcast subscriber will have to pay for SyFy in order to get MSNBC and other Comcast offerings.

The cable industry has a racket making people pay for products that aren’t wanted. Parents Television Council President Tim Winter calls this method of cable pricing “a forced-extortion scheme.” Law professor Warren Grimes of the Southwestern School of Law has studied this issue and estimates that cable subscribers are overcharged about $34 billion a year paying for channels they don’t watch. Meanwhile, the National Cable and Telecommunications Association spent $18 million last year lobbying and marketing to maintain the status quo.

Sports programming is a major driver of surging cable costs. Rights fees are up as sports channels bid to secure rights to broadcast popular leagues and teams. Estimates are that sports programming accounts for half the cost of pay television, even though 60 percent of all viewers have no interest in sports. Those non-sports viewers, however, are still charged more than $5 monthly on their cable bill for ESPN alone. Cable pioneer and media executive John Malone said in a published report that it is “essentially a high tax on a lot of households that don’t have a lot of interest in sports.”

Public interest groups have become vocal recently, calling for a la carte purchasing of cable channels, a plan that would empower viewers to pay only for the channels they want. The media reform group Free Press along with the Parents Television Council and Consumers Union are among the leading a la carte proponents.

Sen. John McCain of Arizona has introduced a bill in Congress that would bring about a la carte cable and stop the practice of bundling. It is too early to predict if this legislation can get through Congress, but the NCTA has already begun its PR campaign to fight it, saying in a statement that “subscription bundles offer a wider array of viewing options, increased programming diversity and better value than per channel options.” This rhetoric begs the question, of course, because viewers vote with their remote controls as to which channels they like. They don’t care about a “wider array” or “programming diversity.” Further, there is no enhanced value for a viewer who is offended by the drug-saturated and sexually charged programs of MTV when they have to pay for it.

The business model under which cable TV has operated has long been unfair and is now growing old, too. The bubble created by high cable prices can’t continue to grow, and the cable industry would be wise to adjust to the changing market before the bubble bursts. A million American homes cut the cord in the last year, now relying on streaming Internet and over-the-air broadcasts for their video consumption.

The technology for executing a la carte is available, as some cable systems in Canada have already demonstrated. Technology companies like Intel are in design for systems that would deliver a la carte programs over the Internet. The cable industry made mountains of money with an economic model that served it well for years, but consumer awareness and technology changes have arrived. Adaptation now would be more sensible than becoming a business dinosaur.

Jeffrey M. McCall is a professor of communication at DePauw University in Greencastle, and author of “Viewer Discretion Advised: Taking Control of Mass Media Influences.” Contact him at jeffmccall@depauw.edu. On Twitter: @Prof_McCall.

1
Text Only | Photo Reprints
Letters
Latest News
TribStar.com Poll
AP Video
Raw: Thousands Flocking to German Crop Circle Texas Scientists Study Ebola Virus Raw: Otters Enjoy Water Slides at Japan Zoo Smartphone Powered Paper Plane Debuts at Airshow Raw: Deadly Landslide Hits Indian Village Raw: Plane Lands on New York Highway Two Women Narrowly Avoid Being Hit by Train Fighting Blocks Access to Ukraine Crash Site Dangerous Bacteria Kills One in Florida 3Doodler Bring 3-D Printing to Your Hand Raw: 16 Killed in Gaza Market Strike Russia Counts Cost of New US, EU Sanctions Raw: Smoke, Explosions Fill Gaza Skyline Southern Accent Reduction Class Cancelled in TN Obama Chides House GOP for Pursuing Lawsuit Visitors Feel Part of the Pack at Wolf Preserve 3 People Killed, Deputies Wounded in NC Shootout Six PA Cops Indicted for Robbing Drug Dealers Small Plane Crash in San Diego Parking Lot Britain Testing Driverless Cars on Roadways
NDN Video
Famous Internet Cats Help Big Cause With Viral Video Did Jimmy Fallon Look Up Heidi Klum's Dress? Chapter Two: Composing for a film in retirement What Drama? Miranda Kerr Poses Topless Woman's Dive Goes Terribly Wrong Plane crashes in San Diego Costco parking lot Justin Bieber Takes To Instagram To Diss Orlando Bloom You Won't Believe the Celeb Cameos in "Sharknado 2" Pitch Invading Morons Cause Chaos - @TheBuzzeronFOX Orlando Bloom 'Takes a Swing' at Justin Bieber In Ibiza Sadie Doesn't Want Her Brother to Grow Up "Maxim" Hotness! See Jessica Alba's Sizzling Spread Two women barely avoid being hit by train Broken Water Main Floods UCLA Orlando Bloom and Justin Bieber Reportedly Came To Blows In Ibiza Meet the Man Behind Dumb Starbucks Chris Pratt Adorably Surprises Kids at a 'Guardians of the Galaxy' Screening NOW TRENDING: Peyton Manning dancing at practice "The Bachelorette" Makes Her Decision Thieves pick the wrong gas station to rob
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
  • -

     

    March 12, 2010

activity