Thursday, December 01, 2005

Cable channels a la carte - Revisited

It seems FCC is having second thoughts about allowing "A La Carte" option for the consumers. That is not what I wanted to mention here. I came across this article at www.engadget.com (which is my favorite site) which made arguments which didn't make a lot of sense. First the author said the following
"..If you make a channel like say “The History Channel” stand on its own, the number of people who watch the channel would plummet. This would cause the cost of the channel to rise which would, in turn, cause the number of viewers to decrease. It’s a standard supply and demand curve and with each decrease in viewership, the loss of potential advertising revenue exacerbates the issue."
which is O.K with me. But going by the same supply-demand theory, the following cannot be true
"...The majority of cable television programming costs are due to a few select channels such as ESPN"
Based on the supply-demand, if more people prefer watching select channels, then the cost should obviously go down isn't? If I own a channel, I would price it lower so that I could have a broader reach instead of charging a premium and have few people opt it.

The other thing that I hated about the article is the author's negativity about something that hasn't been tried. Why would you oppose something that gives consumers more choices? If this new scheme fails in the market, that is a different thing. Let the market decide. What does the consumer have to lose or the cable providers have to lose because of all this? Nothing.

1 comment:

Anonymous said...

I am looking forward to a la carte so I can drop ESPN and all other sports and religious programming.