Of Course Cable Packages Should Be Unbundled
Give consumers the unbundled cable they want
September 17, 2013
Many consumers say they want unbundled cable, so why is this even controversial? Of course it's a good idea.
This is a serious point. In most lines of business, when customers say they want something – and are willing to pay for it – companies fall over themselves to provide it. Competition makes that happen.
But cable companies have been hearing from their customers for years that they want more choice in the programming to which they subscribe. It doesn't have to even be full channel-by-channel à la carte. People just want more flexibility, and a way to lower their bills without losing all the programming they love. Someone who is not a sports fan should not have to pay $10 a month to help offset ridiculous multi-billion dollar TV sports deals.
Yet it doesn't happen, because the cable TV market is not like other markets. Most programming is controlled by a handful of content giants. Some of the most popular programming is created by broadcasters, who still benefit from decades of policies designed to protect them from new competition and changing business models. These companies can demand their content gets carried in a bundle – protecting the weaker channels.
These content companies can demand high rates from cable companies – and this brings us to another part of the problem. When cable rates rise, viewers can't vote with their wallets and go somewhere else. Some lucky viewers do have other pay TV options, but they're often just more of the same.
In the 1980s, the lack of competition in cable TV wasn't surprising. After all, it's expensive – and requires a lot of government permits – to run a wire to everyone's house. But now, the Internet makes it so that lots of programming companies can compete directly against each other. Netflix and Hulu run over the same wire. The best way to promote viewer choice in the long term is to make sure the Internet can bring choice to viewers – that online video providers can access the content they need, and aren't blocked from the broadband pipes that reach people's homes.
In the short term, programmers, broadcasters, and cable companies all receive a number of special protections from the government. It's not asking for too much to require they provide viewers more choice in exchange. Sens. John McCain, R-Ariz., and Richard Blumenthal, D-Conn., have a bill that would do just that, and all voters should support it.
A lot of times the debate over unbundling TV gets bogged down in details of programming contracts and economics. But why don't we just ask why the TV market, unlike so many others, is so resistant to giving people what they want?