Sunday, July 03, 2005

Amazing - I Agree With The PTC

First of all, I haven't been feeling very well for the past few days so my posts have been sporadic at best. As a result I haven't been able to complete a review of the new CTV show Robson Arms. Suffice it to say that I like it a great deal and am disappointed with the way that the network is burning it off in July, two half-hour episodes at a time. It deserves better.

Now on to the main thing. I do agree with the PTC on an issue but it's not strictly speaking an issue of censorship. Rather it's an issue of choice. According to the PTC's "E-Alert" the Council has joined with "Consumer's Union, the American Family Association, the AFL-CIO, Morality in Media, and seventeen other organizations, joined together to urge Congress to give cable viewers more control over the programming coming into their homes. In a letter to members of Congress, the coalition urged Congress to enact legislation that would allow consumers to choose cable channels on an a la carte basis." Strange bedfellows indeed and I suspect that the AFL-CIO and the Consumer's Union don't have the same reason for advocating a la carte choice of cable channels as the PTC, Morality in Media and The American Family Association. In their recommended letter to American legislators the Council writes:

"The problem of raunchy programming pouring out of our television sets day and night has become an issue of national concern. Hollywood, which is responsible for producing and airing such offensive material, with ultra-violent images, obscene language and graphic sexual dialogue has washed its hands of responsibility for the consequences stating that consumers - parents - should be more proactive in safeguarding their families from this offensive material.

Over-the-air broadcast networks have to abide by decency standards. There is, however, no such jurisdiction over cable television, which is far more offensive. Cable companies enjoy a virtual monopoly forcing consumers not just to take offensive programs, but to pay for them. This is unconscionable. Why can you pick up the phone, order and pay for HBO if you want it, but can't pick up the phone, cancel and stop paying for MTV if you don't? When you visit your local convenience store to purchase milk and bread, should you also be forced to take and pay for a carton of cigarettes, too?

There is one solution that is as obvious as it is simple. It is acceptable to conservatives, moderates and liberals, Republicans and Democrats. It is cable choice, the ability for the consumer to choose what he takes and pays for when he orders cable. The technology exists and the system could be implemented overnight - but the cable monopolies won't allow it."

So obviously the PTC expects that, given the right to "pick and pay" for their cable channels people will only buy wholesome, uplifting, family fare. I doubt that's what the Consumer's Union and the AFL-CIO expect. I believe that they feel that a la carte pricing will reduce costs to consumers. That's fine - it's not necessarily right but it's fine. Each of the organizations named, and probably the other seventeen organizations that the PTC doesn't name want the same thing for different reasons. The questions are, I suppose, can it be done and can it be done as easily as the PTC claims?

The answers are yes and no. Yes it can be done, and I know because a portion of my cable programming is available on an a la carte basis - the digital portion. And it is easy to implement. When I got digital cable I was able to choose how many of the digital channels beyond certain basic services (four American superstations and later five time shifting channels) I would take. I called the cable office and literally within minutes the channels I wanted were the ones I was seeing. This doesn't apply to the analog side however. As my neighbour, who works for Shaw Cable, tells it if the station isn't digital they have to install blocks on an individual basis. So it's not exactly easy unless the cable industry converts all of their stations to digital services exclusively, or at least everything beyond local stations. So yes, if you have digital service it can be implemented overnight but only for the digital channels.

Now let's look at costs. Cable companies say that offering packages is cheaper for them. They reflect this in price so I suspect it's true. Here are prices for digital channels on three Canadian cable systems (Shaw, Rogers and Cogeco)

Shaw Rogers Cogeco
1 Channel NA* $2.49 $2.49
2 Channels $2.99 NA* NA*
5 Channels $6.95 $9.95 $6.99
10 Channels $10.95 $14.95 $9.99
30 Channels $20.95 $26.99 $19.99
* Shaw is the only company offering a price for 2 channels but not for one.

But now consider packages. Rogers offers 9 non-premium digital movie channels for $7.99, $1.96 less than they charge for five individual channels. Cogeco offers a digital pack of 6 non-premium movie channels for $6.99, which is $2.49 less than ordering the same six channels a la carte. Cogeco charges a base price of $43.99 with any one of their digital packages, $54.99 for three packages and $64.99 for all seven (this is based on purchase of the digital box). Packages are priced to to make them more attractive to consumers. Of the three cable companies that I've looked at here, Shaw is the only one not to offer packages. Is the average consumer more willing to buy the two additional Cogeco digital packages for $11 (let's say that the two packages includes a total of 15 additional channels) or is he/she more likely to spend $16.98 to choose 15 channels? If most of the channels that he wants can be obtained for that $11 he will buy the package even if there are channels there that he/she doesn't want because based on Cogeco's pricing that $11 represents only seven channels bought a la carte.

So yes, I agree with the PTC, and the AFL-CIO, and the Consumers Union and all of the other groups that advocate a la carte pricing for cable television, but unless cable companies are prepared to switch totally to digital cable and abandon analog it can't happen. And unless the only choice that the companies offer is a la carte pricing alternatives (over and above basic network coverage) I suspect that the vast majority of people will opt for packages if packages are cheaper.

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