‘A La Carte’ Cable Could Prove Costly

WASHINGTON, D.C. Requiring cable operators to offer programming a la carte could drive smaller channels out of business, forcing ad buyers to turn to network TV and away from highly-targeted cable purchases, a leading media planner said on Thursday.

Jon Mandel, co-CEO of Mediacom USA, said lesser-known channels that depend on assured carriage to establish an audience and cultivate an advertiser base would likely suffer. “If they’re not in the home, they’re never going to get discovered,” Mandel told a symposium hosted by the Federal Communications Commission.

The FCC is examining proposals to allow consumers to choose which channels they want rather than accepting broad programming tiers. Critics have said the expanded basic tier saddles all consumers with the cost of sports channels and brings racy fare into homes that would rather not have it.

The National Cable and Telecommunications Association, which represents big cable companies, presented research that concluded consumers would pay more for fewer channels because a la carte choice would boost marketing costs and undermine ad revenue.

Geraldine Laybourne, CEO of Oxygen Media, called a la carte “one of the worst ideas I ever heard.” She said investors would not front the hundreds of millions of dollars needed to launch new channels such as Oxygen, which is oriented toward women’s programming, without guarantees the shows will be carried into millions of homes.

Bennett Hooks, CEO of the Tyler, Texas-based Buford Media Group, which runs 78 cable systems, suggested operators be free to move expensive sports programming or racy shows from the expanded basic tier, and onto separate tiers.