FCC moots a la carte model for pay-TV platforms

MUMBAI: US media regulatory body the Federal Communications Commission (FCC) has issued a Further Report on the packaging and sale of video programming services to the public on the issue of an a la carte model for delivery of video services.

The Further Report finds that US consumers could be better off under a la carte and explores several a la carte options that could provide substantial benefits to subscribers by increasing their choices in purchasing programming.

The report argues that American consumers could save up to 13 per cent on their pay-TV bills if they were given the option of a la carte pricing. The Further Report re-examined the conclusions and underlying assumptions of the earlier Media Bureau report on a la carte submitted to Congress in November 2004.

In particular, the Further Report describes a number of errors in the Booz Allen Hamilton Study that the Media Bureau relied upon to support the conclusion of the earlier report that a la carte is not economical.

The FCC says that the average television household only watches 17 channels. If platforms were to offer a la carte pricing, consumers could save anywhere between 3 and 13 percent on their cable bills.

The current industry practice of bundling programming services may drive up retail prices, making video programming less affordable and keeping some consumers from subscribing to multichannel video programming distributor (MVPD) services.

The Further Report found that the 2004 report also relied upon unrealistic assumptions and presented biased analysis in concluding that a la carte "would not produce the desired result of lower MVPD rates for most pay-television households."

For many popular networks, advertising and subscription fees might rise as viewers shift to those programming options, even as consumers who opt to watch only those channels enjoy significant savings on their MVPD bills.

Some type of a la carte option could prove better than todays bundling practices in fostering diverse programming responsive to consumer demand. A la carte could make it easier for programming networks valued by a minority of viewers to enter the marketplace states the report.

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