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Laybourne Breathing Fire Over a la Carte

7/29/2004 11:12 AM Eastern

Geraldine Laybourne may be CEO of Oxygen Media, but she was breathing fire Thursday at an all-day Federal Communication Commission forum on the plausibility of cable companies offering more channels on an a la carte basis.

“A la carte is not the answer. In fact, it is one of the worst ideas I have ever heard,” Laybourne told an FCC panel headed by Media Bureau chief Kenneth Ferree, who has bemoaned the lack of channel choice on cable and declared himself an unabashed fan of a la carte pricing.

Ferree’s staff is preparing an a la carte report for Congress due Nov. 18. Lawmakers wrote the FCC expressing concern about the lack of a la carte options on cable and about indecent programming that customers can block free-of-charge but still need to purchase.

The economics of a la carte would, Laybourne said, result in consumers paying more money for fewer channels -- a statement that reflected the results of a study funded by the National Cable & Telecommunications Association, which found that a la carte would trigger higher per-channel rates and crush niche networks that need homes within large tiers to gain traction with viewers and advertisers.

Cable-network budgets would undergo dramatic change, Laybourne said, adding that a channel like Oxygen, which spends less than 5% on marketing, would need to ramp up marketing spending in an effort to persuade viewers to give the channel a try.

“The idea that we would have to spend that money on marketing is an abomination,” she added.

Laybourne noted that when Nickelodeon was just an idea, kids surveyed said they didn’t want the channel. Today, Nick is a cable-programming jewel. That anecdote, she said, demonstrated that large tiers offer cable networks crucial consumer exposure.

“Consumers would never get a new network under this [a la carte] scenario,” Laybourne said. “There would be less money for good programming.”

 

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