Over the past 20 years or so, one of the most significant public outcries has been a demand for a la carte TV programming when ordering cable services. Sometimes, people have to be careful of what they wish for because they just might get it.
We are in the golden age of television right now. The amount of choice we have for watching television programs is astounding because there are so many content providers vying for viewership. The concept of television has evolved into a streaming model which has not only made the quantity of quality programming possible, but it has also made the concept of a la carte programming possible.
If you're willing to pay for it.
Unfortunately, greed, the need for consistent profits, is probably what will kill this golden age of television.
The business model of content providers has traditionally been to demand that their channels be packaged with other channels. While this business model provided a great deal for cable subscribers, most of those cable subscribers were disgruntled because they were paying for channels that they did not want. In 2016, cable and satellite providers were paying an average of $6 to $8 per month for ESPN, a single channel. ESPN 2 was an additional $3 to $4 a month. Those two channels cost the average cable subscriber between $9 and $12 a month! When my family first subscribed to cable in the 1980s, our entire cable bill wasn't even that much!
So let's use ESPN as an example. It's been a few years since I have seen any quantifiable data as to how much people actually watch ESPN. The data I have from 2008 says that approximately 20% of cable subscribers watched ESPN while only 8% claimed that they would cancel their cable subscriptions if ESPN was dropped from the lineup. That means that 92% of cable subscribers are subsidizing what 8% of cable subscribers would otherwise purchase.
Since we are gradually moving over to an a la carte business model thanks to the advent of streaming data over the internet, ESPN is going to have to find a way to recoup the revenue that they will lose by not requiring most cable subscribers to include ESPN in their basic lineup whether they want it or not. If we use the above data to extrapolate that only 8 out of every 100 subscribers will subscribe to an ESPN a la carte product, that means that in order to raise the same revenue, ESPN would have to charge between $72 and $96 a month for their services in order to capture the same revenue as they did in their hey day.
Of course this is an unsustainable model. No one is going to pay that, so one of two things will have to happen. Either ESPN will have to cut programming to bring their costs down, or ESPN will cease to exist.
I sense this is the pending disaster that is awaiting the established TV industry. New players like Netflix, Hulu, and Amazon Prime are poised to take advantage of this model. However, the way I like at it, one who is subscribing to Netflix for $10 a month is paying $10 a month for a single channel. CBS is the newest player on the scene, and their decision to charge subscribers $5.99 a month for the privilege of watching the new Star Trek Discovery series has been extremely controversial. However, consumers must realize two things. 1) This is exactly what they have been asking for and 2) CBS is doing this in order to survive. I promise: The other networks are going to follow suit. It is their only choice.
I envision a future where consumers will subscribe to 8-10 channels over the internet, and their total monthly bill will be just as much (if not more) than what they used to pay for video service. Of course, in another 10-15 years, it is highly likely that content providers will start working with each other to bundle their services again, and we will have come full circle ending up exactly where we started.
