Backchannelmedia

Augusta Chronicle, The

By Seth Sutel< Associated Press<

NEW YORK - It's a question that many cable TV subscribers ask: My cable company keeps adding more channels to my system but I don't watch many of them. Why can't I just pick the ones I want?

Rupert Murdoch, a titan of TV, has a simple answer: "I think it kills the whole business model."

Mr. Murdoch echoed the views of many in the cable business when he told reporters recently that "a la carte" pricing wouldn't work for the industry and would lead to higher cable bills for consumers. Mr. Murdoch's News Corp. owns Fox News Channel, FX and other cable channels and controls the satellite TV broadcaster DirecTV Group Inc.

The industry's argument goes like this: If consumers are free to drop less-viewed channels, many of them would go out of business, and others would have to sharply raise their per-customer rates to stay afloat. "Bundling" them together helps spread costs around and supports a variety of programming.

However, pressure is building on the industry to change.

In early February, the Federal Communications Commission released a report challenging the industry's long-held position that a la carte would be undesirable for consumers.

A wave of technology breakthroughs, including digital video recorders, video iPods, video "on demand" from cable and satellite providers, and the increasing availability of video over the Internet, have gotten people accustomed to picking and choosing what they watch.

Those changes are "making the point that a la carte is not only possible, but desirable," said Gene Kimmelman, the senior director of public policy at Consumers Union and a big supporter of a la carte pricing.

Many analysts believe the FCC likely won't force the industry to adopt a complete a la carte pricing model, but the agency's reversal of its previous opposition to the idea could embolden others to challenge the status quo.

In a statement, AT&T said it would "be happy to offer a la carte programming as long as we are able to obtain access to the programming in that manner."

But cable networks have been reluctant to let television services sell channels individually.

Network executives say that too much choice could drive some niche channels out of business. If fewer people sign up for, say, Black Entertainment Television or the History Channel, they might have to raise their rates for each customer to stay in business.

Cable networks prefer the bundled system because they can charge more for advertising if they're distributed to as many homes as possible.

With a packaged approach, large media companies that own must- have cable channels such as Walt Disney Co.'s ESPN or Viacom Inc.'s MTV can use their muscle to get attractive carriage deals for their smaller cable networks, such as Disney's ABC Family channel or Viacom's new gay and lesbian network, Logo.

It's also far simpler for cable companies to offer one standard package. Think of the administrative costs Comcast Corp. faces if it must create custom cable packages for each of its 21 million customers, then get all the monthly bills right.