While media buyers are skeptical the industry will ever allow
consumers to cherrypick individual networks -- and some argue it
would only affect the smallest of channels -- they acknowledge some
form of unbundling is possible.
This would be good for broadcast TV, analysts say, because it
would be even more desirable for its reach. Ultimately, increased
demand would inflate the cost of reaching 1,000 viewers, an
industry standard known as CPMs.
A significant amount of TV viewing comes from casual viewers
watching channels that are available to them, but that they likely
wouldn't want otherwise. Networks that fall outside of the top tier
include independents like ReelzChannel and Ovation, as well as
networks owned by conglomerates like Viacom's Centric and Discovery Communications' Velocity and
the Military Channel.
Marketers don't typically buy advertising on networks that reach
fewer than 25 million homes, and Amy Sotiridy, senior VP-director
of national broadcast at Initiative, said for many of her clients
the threshold is 50 million. This would make it difficult for niche
networks to survive.
"If these long-tail channels disappear, cheap CPM networks would
be off the media plan," said Michael Parent, senior VP-director of
national broadcast at TargetCast. The top 20 networks would
cost more, he said.
"Competition allows us to use networks against each other to
negotiate lower prices," said Marc Morse, senior VP-national
broadcast at RJ Palmer. In an a la carte world, the
big networks would have the upper hand since there wouldn't be many
places for advertisers to go, he said.
Media buyers are supportive of new networks entering the
ecosystem since they increase competition and negotiating power.
But a la carte would make it nearly impossible for a new network to
launch, Ms. Sotiridy said. Why would a consumer pay for a channel
that isn't proven, and how does a network develop cachet unless it
This could make advertising on online platforms like Hulu and AOL even more attractive
and help speed the shift of dollars out of TV and into digital. An
a la carte system might spur more viewers to seek out individual
shows online rather than buy specific networks, a trend that
already seems to be happening.
"Viewers more and more are pursuing content vs. the network,"
said Francois Lee, senior VP-group client director at Starcom MediaVest. "The value for
advertisers is in the content, wherever it lives, not in the
But some media buyers argue a la carte wouldn't drastically
impact reach, especially for the big cable networks.
The average households receive more than 200 channels, but
watches just 12 to 14 networks a month, Ms. Martin estimates.
"People would likely buy 10 to 15 networks and those would
mostly be the top 10 to 15 networks with one or two niche channels
thrown in," said Michael Law, senior VP-video activations at
A network could be in 80% of households but only be watched by
half that, said Rino Scanzoni, chief investment officer at Group M.
So going a la carte wouldn't necessarily change the ratings of the
network -- just its perceived reach.
"If people watch the same amount of TV, only getting channels
they want, the supply of ratings points would remain constant for
the most part," Mr. Parent echoed.
But Mr. Parent doesn't believe the same amount of content would
be consumed on TV. "There would be less casual viewing and a drop
somewhat in surfing," he said. "It might drive some people online
to watch certain shows. If out of the 10 networks there's nothing
on you want to watch, you will turn it off."
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CORRECTION: An earlier
version of this article said Rep. Anna G. Eshoo was circulating
draft legislation that would let consumers choose cable channels on
a la carte basis. The bill would require pay-TV companies to let
consumers buy service excluding broadcast signals and bar
broadcasters from making carriage of sibling cable networks a
condition for carrying the broadcast signal, but it would not make
pay-TV companies offer channels on an individual