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December 08, 2005

Daddy, What’s a Channel?

FCC Chairman Kevin Martin has “suggested” that cable companies allow us consumers to buy channels ala carte and not require us to buy bundles consisting mainly of unwanted channels in order to get the few channels we do want.  Choice is good and I’d like to have this option.

Of course, if the FCC would stop protecting the last mile cableco-telco duopoly, then we wouldn’t need commissioners to suggest alternatives that would spring like froth from the waves in the chaos of a competitive access market.  But I’ll leave that quibble for another day.  One could also be cynical and suggest that the Chairman’s “suggestion” is more helpful to the telcos trying to become cablecos than vice versa and that there seems to be a trend here; but let’s not go there either.

Choice IS good but why stop at the channel level?  Channels are a relic of over the air broadcasting.  They’re an archaic mechanism for keeping different data streams apart, very wasteful of bandwidth.  Channels are only emulated on digital cable and satellite because channels are what we consumers are used to and because the network business model is built around channels.  Channels don’t exist at all on the Internet except when emulated in some client software like that from Real Networks.

Why shouldn’t we just have a choice of all the programs we might want ala carte?  Why have to buy by the channel?  I watch BBC News despite its bias; you couldn’t pay me to watch the inane comedies that surround it on the BBC.

At the expensive end of the entertainment market, we can buy individual wrestling matches, recently-released movies, and chunks of pornography broadcasting.  I can buy Knicks games only by buying the whole NBA (but not whole channels); same for the New York Jets.  (You might not want to read anything by a blogger who buys season-tickets so he can watch his teams lose).

At the newest end of the market, individual videos are being made available for download to iPods.  There’s no longer a need to buy a whole CD just to get a tune that you like.

Speaking of CDs, I have a friend who was buying some and took his son along with him to the local Tower Records.  “Daddy, said the very young man, what’s a record?”  I doubt whether our grandchildren will think of a channel as anything other than the deep water you try to keep your sailboat in.  Broadcast channels are obsolete.

But, even though PayPal could facilitate it, I don’t think we’ll pay for video one show at a time.  People really like the simplicity of subscription pricing (see this post).  We don’t want to pay for our Internet access by the minute or, even worse, by the kilobit of traffic.  We don’t like to pay for our phone calls by the minute.  NetFlix has made a successful business of subscription pricing for content and that’s a model of what I think we’ll see for almost all content (note: we DON’T need ONE model for everything).

We do subscribe to cable today.  My prediction is that we will subscribe to access of all kinds independent of the content that comes over it – just as we do with Internet access today.  For most of us there will be just one access method per residence – one last mile connection to the Internet that we use for both user-generated content –email, voice calls, photo-sharing – and access to entertainment..  We will pay a fixed monthly fee for this depending only on how fat a pipe we want – not on how much we use the pipe or what we use it for.

Much content including entertainment will be “free” because it will be ad-supported or sales-supported in some way.  Not much new in that.  There will be increased “amateur” content of all kinds – not just blogs. 

Other content will be by subscription but the subscriptions won’t be to bundles of channels or even individual channels and, in general, we won’t buy the subscriptions from our access providers.  There won’t be any channels.  We will either buy direct bundles of content from content providers themselves – Pixar Studios, our favorite groups, our favorite authors – or we will buy “unlimited free downloads” which will really mean that we can download up to x songs or books or movies a month for y dollars.

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» On the FCC involvment from It looks obvious
Tom Evslins post about ala carte broadcasting is great in many levels. It discussing the motives of the FCC Chairman for his recommendation and explaining why the suggested ala carte channels broadcasting is much less then what the market and t... [Read More]


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