A Backdoor Way To Make À La Carte Work
So called “skinny bundles” were going to be the next big thing in TV, at least until people figured out that they were still bundles, which meant that sometimes they had the programming that viewers wanted and sometimes they didn’t. Which meant adding on “extras” until the skinny bundles—and their price tags—got kind of fat.
The problem, of course, is that one person’s “must have” channel is another person’s “skip it.” And the cost of each add-on package is low enough that it seems punitive to deny yourself the pleasure of, say, the Biography Channel just because it’s not part of the core bundle, but for families in particular, the cost of making everyone happy quickly adds up.
True a la carte has not been available in the U.S.. The networks claim (correctly) that it would wind up being very expensive, as the larger network groups wind up subsidizing the costs of their smaller channels. So that, for example, NBC might charge Verizon $25/month for all the channels in the NBCU family (MSNBC, Bravo, Oxygen, SyFy, USA, et. al.) but that is based on a price of $20 for NBC, with the rest of the networks thrown in for far less than the $4 or $5/month they’d sell for on their own. NBC finds value in bundling them together because they feel they can more than make up in ad revenue what they lose in subscription fees. (NB: These ersatz NBC numbers are for illustration purposes only. They are not real.)
A la carte TV is available in Canada, where a new ruling requires pay-TV providers to offer that option to viewers. But as many predicted, prices for individual channels are sky-high and users are finding bundles to be a more cost-effective option. (To be fair, some observers feel that the networks purposely set prices so high in order to discourage consumers from choosing the a la carte option. The networks, of course, beg to differ.) Regardless, it has not resulted in lower bills or better options.
One U.S. company has a clever plan to change that however, and introduce a la carte television to the U.S.. Freecast is introducing a new set top box called ONE that will take advantage of ATSC 3.0 technology to deliver both broadcast and cable networks over the air. (In order to make that happen, Freecast is partnering with a company that has nationwide broadcast capabilities .) The idea is that users would get the broadcast networks for free, but would pay for the cable channels individually.
Crazy as it sounds, this just might work, especially if viewers limit the number of cable channels they subscribe to.
Popular cable channels like ESPN and CNN may go for $7/month, but TV[R]EV estimates that smaller networks could go for as little as $2/month. A package that includes ESPN, CNN and four other cable networks, plus the four broadcast networks and PBS, with full cloud DVR capabilities would only cost a consumer $22/month. While it’s a fairly slim bundle, it only has the channels the viewer wants, plus live access to all four broadcast networks (something Sling, at $25/month is only able to offer in areas where the broadcast networks have O&Os.) For someone who does not watch a lot of television, but wants to be able to watch their favorite nature documentaries, Freecast’s ONE could be an ideal solution.
Heavy TV viewers will want to stick with their current pay-TV packages—a la carte is not an ideal path for them. But for someone who doesn’t watch a lot of network television, Freecast’s a la carte package might be a win for both consumers and the networks who are trying to reach them. It’s definitely something we’ll be keeping an eye on in the months ahead.
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