• Cable Network CEO Attacks Cable Choice

    by  • June 12, 2013 • Cable Choice • 2 Comments

    Senator John McCain’s Television Consumer Freedom Act will “kill independent networks in the U.S., limit consumer choice, and make programming way more expensive,” claims one cable executive. But all those problems already exist under the current regime, and Senator McCain’s act will fix them…unless industry bosses get their way.  

    In a recent op-ed in Broadcasting & Cable, Threshold Entertainment Group CEO Larry Kasanoff attacked Senator McCain’s proposed act, which would allow customers to pay for only those channels they actually watch. In doing so, Kasanoff’s op-ed recapitulated many of the entertainment industry’s standard claims opposing Cable Choice, relying on the same tired arguments the PTC has rebutted time and again. The op-ed claims that the McCain bill “not only threatens businesses…but more dangerously, limits entertainment options for American consumers, and actually forces them to pay more for less.”

    Of course, the very fact that the person penning an editorial opposing Senator McCain’s common-sense solution is himself the boss of a live-action movie studio, an animation studio, and a TV network ought to raise suspicions about his motives. (Why do we get the feeling that those in the industry are more concerned about the “threatens businesses” part than they are about “limiting entertainment options”?)

    The “pay more for less” claim is a tired tactic of the mega-conglomerate entertainment industry, which has used identical language going back a decade or more. “This ‘pick and choose’ option isn’t all it’s cracked up to be. Currently, your cable, satellite, or phone company buys lots of networks and bundles them for you to keep costs lower,” says the op-ed.

    This claim is false. What the bundle actually does is force every consumer to pay for literally hundreds of channels they never watch and don’t want. In his op-ed, Kasanoff uses the example of paying for a buffet breakfast, at which you can eat as much of whatever you want, as opposed to an ala carte meal of “only toast and eggs.” But this example is deeply flawed. If all a person wants is toast and eggs, why should they be forced to pay for a buffet? This is not even to mention that such a “buffet” includes dozens of “foods” nobody wants – and it costs almost $100 a month.

    “If this bill passes, the cost per network, and your cable bill, will escalate,” Kasanoff warns. But again, this is false. There is absolutely no reason why the cost per network should go up under an ala carte system. Each channel’s price is entirely within the control of the entertainment company that owns it. The only reason “your cable bill will escalate” is because the greedy mega-conglomerates of the entertainment industry CHOOSE to charge more.   

    Repeating another favorite argument of the entertainment conglomerate, the author then says that pay-TV networks need time to develop and find their audience. “It was only with time and innovative programming that [MTV became] the most iconic and powerful” channel of a generation, he says. But MTV – along with other networks the op-ed cites, like the Discovery Channel — is a perfect example of what many cable subscribers loathe about the current system.

    Yes, MTV did become powerful and iconic – by PLAYING MUSIC, not by showing the trashy, sex-charged antics of drunken frat boys and vapid women on shows like Jersey Shore. Similarly, the Discovery and Learning Channels once actually offered viewers a chance to discover and learn about more illuminating subjects than marijuana, Naked Castaways, and Honey Boo Boo.  But because of the industry’s “bundling” practices, every cable and satellite subscriber is still forced to pay for them.

    “[McCain’s] plan means we’ll likely miss out on great shows because we may not be able to find them. And, without the chance to establish a substantial audience, many shows will never even make it on the air at all,” Kasanoff says. Apparently, people are incapable of reading a channel guide. And it would have been a national tragedy if Keeping Up with the Kardashians had never aired!

    Amid his repetition of the entertainment industry’s various falsehoods, Kasanoff does raise one legitimate point of concern: the fate of small, independent networks which are not owned by giant entertainment industry conglomerates like Disney, News Corp., or Comcast-NBCUniversal. “U.S. distribution for independents is already next to impossible, largely due to the unfair and outdated imbalance” the FCC provides to the conglomerates, he notes.

    Yet Kasanoff reaches the wrong conclusion about this fact, stating that if McCain’s bill takes effect, “powerful conglomerates like Viacom, Disney and Fox will exert leverage and excessively price their highly-viewed channels like ESPN, MTV, FX, etc., forcing smaller, niche independents, who do not have such leverage,” out of business. But, as the PTC has previously detailed, this is exactly what the conglomerates are doing already!

    In fact, under an ala carte regime, such channels would have at least as good a chance as they do now – and it might be better. Freed of the burden of supporting hundreds of channels they don’t want, many subscribers might be MORE willing to give channels like Hallmark, INSP, UP – even Kasanoff’s own Blackbelt TV – a chance to succeed, presuming the subject matter is of interest.

    What McCain’s bill would do is force networks to compete for viewers, rather than getting a free ride as part of a “bundle.” Who would choose to pay for channels like FearNet or Tru TV if they didn’t have to in order to get something they do want? Under McCain’s bill, pay TV networks would actually have to offer viewers a genuine choice of different subject matter, rather than yet another rerun of Law & Order or CSI. In that arena, small independent networks which select and stick to a core mission would likely do well. Already, networks like the family-friendly Hallmark Channel, or RFD TV, which appeals to Midwestern farmers and others interested in rural life, manage not only to survive, but to thrive — by serving a small but loyal audience who is interested in subject matter not related to crime, drugs, sex, zombies, or “real housewives” from wherever.  

    Attempting to appeal to free-market principles, the op-ed asks, “Is ‘TV cherry-picking’ something our free speech, capitalist government should be legislating?” Senator McCain himself answers: “Many will say that the government should stay on the sidelines and out of the free market. I’d normally agree. But the truth is the government already has its thumb on the scale in favor of industry and against the interests of consumers. It’s time for that to end.”

    “Attacking Hollywood always makes a great story for politicians, but maybe they should leave the storytelling to us and focus on other things, you know, like war, poverty and pollution,” Kasanoff says in conclusion – completely ignoring the fact that one of the jobs of politicians is to regulate industry, thereby protecting their constituents from abuse by billionaire corporate elites. And given the content on many cable networks and the amount the entertainment industry charges for them, one could argue that McCain’s bill IS focused on reducing  poverty — and pollution.   

    Despite the arguments put forward by self-interested media bosses, the truth is this: Senator McCain’s plan will potentially enhance, not kill, independent networks; it will reduce the cost of programming to the consumer; and it will expand, not limit, consumer choice – by empowering the consumer not to pay for something they never use and don’t want.

    Only an entertainment industry executive would think otherwise.

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    About

    Christopher Gildemeister is the PTC’s Head of Research Operations. He began as an Entertainment Analyst at the PTC in 2005. From 2007-2016, he was Senior Writer/Editor, responsible for communicating the PTC’s message to the public through newsletters, columns, and the PTC Watchdog blog. Dr. Gildemeister holds a Ph.D. from The Catholic University of America.

    2 Responses to Cable Network CEO Attacks Cable Choice

    1. William Hughes
      June 14, 2013 at 5:01 am

      The Cable Companies and the Networks don’t want A-La-Carte because within a year we’d find out what channels do people watch and what channels they don’t watch. Naturally the ones that aren’t watch would disappear, because they’d lose the subsidies that Cable Customers currently pay. Parents would certainly drop channels they don’t want their kids to watch including Comedy Central, MTV, and LOGO. Thing is, the current model of bundling is going to HAVE to change, because they are approaching what is called a “Price Plateau”. This is a situation where supply exceeds demand, because people who used to purchase that product because it has become too expensive. Because of high production costs, a company can’t afford to lower the price of their product, and the result is a collapse. People are already cancelled their subscriptions, due to high prices, lower quality of programming, or both. They use the money they save by seeking their informational and entertainment from other sources, most of which are WAY Lower than Pay-TV. The Collapse is imminent, when it happens, don’t say I didn’t warn you!

    2. Matt Norcross
      September 14, 2014 at 5:58 pm

      I think the “buffet” analogy is very accurate. I’m an avid customer at the Shoney’s restaurant in Conway, SC, and I did a little comparison of how much the breakfast buffet is at Shoney’s versus eating their “All-Star Breakfast” from their menu. I realized that eating from the menu is just $5.Very cheap. If you ate at the buffet, you’d pay that plus $10 more, adding up to $15. The difference between bundled TV and Shoney’s is that you get to choose between eating at the buffet or ordering from the menu, and the right choice would be the latter because of being cheaper than the buffet. If cable worked like a Shoney’s restaurant, the media world would be much better for all of us.

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