Survey Suggests TV Consumers Would Prefer A La Carte Pricing Model

  • 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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