A survey of U.S. consumers by RBC Capital Markets showed a marked preference for choosing an a la carte selection of channels rather than a bundled package as offered by the MSOs.
If consumers could choose, they would subscribe to an average of just 19 channels which would cost $1.50 each or $28.50 per month. As a comparison, they now pay $84 for at least 91 channels.
“But the investment research firm’s math confirms long-held views by both content companies and MSOs that a la carte economics would dramatically hurt a business that is a major revenue driver to both industries,” reports Variety. “A likely scenario sketched out by RBC’s report envisioned the $34 billion content companies received in affiliate fees last year getting cut roughly in half if consumers could cherrypick channels.”
The a la carte approach has been debated for many years. The FCC studied the prospect of making the model mandatory in 2004, and more recently cable operators have considered the idea.
Instead, MSOs have been experimenting with lower-priced tiers, but with surprisingly limited market traction. “We are not quite sure why the consumer who supposedly wants an a la carte solution has not simply ‘traded down,'” the RBC report notes.
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