According to Reuters, this is why cable operators are reportedly working on a plan to make programmers unbundle their content. To compete with the online services, some cable companies would like to offer expensive channels like ESPN as premium a la carte channels much as they do with HBO. The programmers, however, don’t sell their channels separately. If a cable operator wants to carry the Disney Channel or ABC Family, they also have to take Disney-owned ESPN.
It’s unclear how cable operators plan to change programmers’ minds. One obvious way would be to get the government to force them to. At least one cable provider has already suggested this to the FCC. That would be an unfortunate and shortsighted turn of events that could lead to higher prices and fewer choices for the customers who stick around.
There’s another strategy open to cable companies, though: Go “a la carte,” but in a completely different way. Netflix streaming accounts for a whopping 30% of Internet traffic in North America, and as consumers continue to move online to consume video, they will demand more and more bandwidth.
That should be music to cable companies’ ears because it’s their pipes consumers will be using to access that programming. Rather than place bandwidth caps as they have been doing, they could meter usage and let consumers choose how much they want to use.
However this ends, the good news is that consumers are likely to come out on top. Remember what your video choices were in 2001? There certainly was no Kindle Fire with Amazon Instant Streaming, but there was also no YouTube, Hulu, Netflix, iTunes, Xbox Live, or Roku. Even TiVo was just beginning to reach the market. We either watched what was on TV or we drove down to the video rental store.
Consumer choice, one way or another, is here to stay.