This afternoon Senator John McCain (R-AZ) introduced legislation (The Television Consumer Freedom Act of 2013) that would completely upend the television business.
There aren’t many things that can unite News Corp., Turner Broadcasting, NBC, CBS and Disney, but stopping this legislation is sure to be one of them.
In a nutshell, McCain’s legislation would allow cable, satellite and telco companies to unbundle TV channels, either selling them “a la carte” or in smaller bundles (think a “sports” bundle). It would also prohibit media conglomerates from shifting popular programming from free over the air networks to cable channels (think the NCAA basketball championship being shared between CBS, which is free, and Turner Sports, which is on cable).
McCain, speaking on the Senate floor, noted that the cost of cable has gone up 4X more than the purchasing power of U.S. consumers, thanks largely to the ever-increasing bundles which force cable companies to carry “Nat Geo Wild” if they want Fox News, or “Cloo” if they want USA Network.
“It is unfair and wrong, especially when you consider how the regulatory deck is stacked in favor of the industry, and against the consumer,” McCain said.
Such a move would almost certainly be devastating to the financial health of TV news channels, just as it is freeing for consumers who are rightly sick of ever-escalating cable bills, and paying for channels they do not want. The result of the legislation would either be “news bundles,” which combine news channels into one bundle for consumers to buy, or an “a la carte” option that would let viewers purchase Fox News, and skip right over MSNBC (or CNN, or whatever).
Neither of those options is a good one for the cable news channels. With the proliferation of news available online, creating news bundles would likely see 10s of millions of households that currently pay wholesale rates on cable news channels drop them altogether. An a la carte option would see die-hard believers choosing only the cable news channel that most connects with their worldview, and ignoring the others. This would also result in far fewer subscribers, forcing much higher rates.
Expect the media conglomerates–as well as smaller programmers–to band together to fight the legislation. The wild card could be the cable companies, which have cooled on the massive bundles that helped spur their rise. A behind-the-scenes legislative battle with News corp. and NBCUniversal on one side and Time Warner Cable and DISH Network on another would be quite something.