News

Cable Operators Want More Choice

7/23/2012 12:01 AM Eastern

Recent disputes between TV networks and distributors
(like the Viacom-DirecTV dispute settled
last Friday) have generated news reports,
editorials and blogs about the need for more
consumer choice in the selection of TV programming.
It is time to set the record straight
about who supports more choices for consumers
and who does not.

BET founder Robert Johnson made some
news with a bold statement to the media the
other day. He predicted the demise of pay TV’s
big programming package within two or three
years, saying inexorable pressure from online services like
Netflix and Hulu will compel cable and satellite TV providers
to offer their customers smaller video packages.

Mr. Johnson is correct that TV networks must be unbundled
to create more choices for consumers, but creating that
choice must start at the source: with content providers. Pay
TV providers — be they cable, satellite or telephone company-
backed distributors — each want to give consumers
more choices. Content providers simply will not allow that
increase in consumer choice. So, someone or something
more powerful than these dominant content giants must
force these content companies either to unbundle their networks
or unlink the bundles of bundles called basic cable.

Ten companies control most of the TV channels in the
U.S. Mr. Johnson correctly notes that 17 of those channels
account for most of the viewing. Yet content providers
work tirelessly to keep their dozens of
networks tightly bundled together. That’s why
basic cable has 100 channels, of which consumers
watch only a dozen.

All programmers want to be guaranteed
full distribution on basic cable. This practice
of bundling networks (owned by the same content
provider) and then linking them to other
bundles (owned by other content providers) ensures
that all of the content providers have full
distribution to all consumers. It reduces consumer
choice and raises cost. Distributors are
unable to break apart either the bundles or the bundle of
bundles because the content providers will not allow it.

This battle is finally starting to attract Congress’ attention.
When it reaches a crisis stage, Congress will respond.

Distributors support more choices for consumers and
are ready to deliver it. Content providers do not support
more consumer choice. It is time consumers, Congress
and the media understand that difference.


Robert Gessner is president of Massillon Cable and
vice chairman of the American Cable Association.
September