A proposal before Canadian regulators and the United States congress could allow consumers to pay for channels individually, as opposed to the current model composed of bundled channels. These bundles have long drawn the ire of cost conscious consumers who find themselves paying for dozens of channels that they may never watch just to get a handful that they do. If a cable package costs $120 a month, then in theory, if consumers could select only the channels that they wanted to watch, perhaps as few as half of those offered in the bundle, they could cut their monthly bills in half too. But since the cable companies do not grant such an option, many of those frustrated customers have cut the cord entirely, buying individual shows and movies a la carte, rather than being forced to subscribe to a multitude of channels.
But while the idea of unbundling and only paying for the channels that you want sounds appealing, it may not be the consumer-friendly solution that everybody imagines. Cable executives warn that if unbundled, the price of many individual channels would rise, particularly those which carry major league sports events. Other smaller and more specialized channels could go away entirely. Without the bundles, there would also be less economic incentive for media companies to invest in new shows without the assurance of wider distribution that bundles currently make possible. A grimmer scenario envisions smaller TV stations shutting down entirely, with thousands of jobs lost there and throughout the cable and television industries.
Consumer advocates have long asserted that the current model benefits nobody but the cable companies, forcing consumers to pay for and essentially subsidize channels that they have no interest in. As cable bills continue to climb, the millions of subscribers would jump at the chance to unbundle and drop unwanted channels, assuming that doing so would be accompanied by savings, which may or may not be the case. The cable companies in Canada and the US are naturally fighting this effort, but many industry watchers say that these changes are inevitable. Those that are unhappy with their cable bills are currently being driven to other platforms that embrace giving users more choice.
Being forced to sell channels on a pick-and-pay basis could threaten the profits of an entire industry that has depended on the large bundles to maintain high prices. Regardless of what happens on either side of the border, evidence suggests that consumers are fed up with high cable bills and want access to their favorite shows or channels directly from the source. They have shown willingness to pay for quality content, but are more frustrated by the lack of options currently available from the cable companies. Content producers too can benefit from selling content directly to viewers, by keeping both advertising revenue and subscription fees, and they’re starting to realize that.
The future winners in the television industry will be the ones who can bring content from multiple providers and sources together in one place so that consumers don’t have to hunt for what they want on a variety of different apps and websites. Once upon a time, that was the function of the now embattled cable bundles. But now that Internet usage is widespread, consumers have other means of accessing content from a near limitless number of sources. Thus far the cable companies have been unwilling to offer that in a way that is economical for consumers.