Midday Report: John McCain Pushes for à la Carte Cable, Providers Resist
À la carte cable: a cheaper option for consumers, or fool's gold?
Senator John McCain is pushing a bill to allow TV viewers to pay à la carte rates to get only the channels they watch. He told a Senate panel yesterday that consumers would save money if they did not have to pay for bundles of channels, most of which they rarely turn on.
He's especially focused on sports programming, especially for people like him who rarely tune in to ESPN and other sports channels.
According to a report by the research firm SNL Kagan, ESPN charges cable companies an average of about $5.50 per month, and that cost gets passed along to consumers.
McCain says it's "unfair and wrong" that we're forced to pay for things we simply don't want.
But the cable industry says that argument is unfair. It maintains that bundles, such as the basic cable package, offer a wide variety of viewing options and a better value than per channel pricing.
Consumers are often outraged by the high cost of cable or satellite subscriptions. The FCC said the average cable bill in 2011 for the most popular package cost more than $57 a month. That represents an average annual increase of 6.1 percent a year, every year since 1995.
That makes à la carte pricing sound pretty attractive to many consumers. But some analysts say most people would actually lose out, because they would no longer have access to channels that they don't watch on a regular basis, but do tune in to for some particular programs.
For instance, maybe you don't watch PBS very often, but love "Downton Abbey." Or maybe there's an old movie on AMC that you want to catch.
This even pertains to sports programming. You may not watch games on a regular basis, but you still get caught up in March Madness basketball games or the World Cup soccer tournament.
Critics say à la carte pricing is a lose-lose proposition. They say consumers would end up with far fewer channels to choose from without saving much money. Smaller cable channels that are likely to get dropped by many people would lose potential viewers. And the cable companies would lose revenue.
Not surprisingly, a trade group representing Comcast (CMCSA), Time Warner Cable (TWC) and other cable companies opposes McCain's bill.
-Produced by Drew Trachtenberg