At first blush, Charter Communications (Nasdaq: CHTR) decision to put a $1 surcharge on cable bills to show how rising costs for broadcast retransmissions impact subscribers appears to be right on. If the broadcasters want to charge extra for such enlightened content as Big Brother, America's Got Talent, and, my personal favorite, According to Jim, the folks who end up footing the cost should know about it.
On further review, as they're fond of saying in the NFL, maybe it's not such a good idea. In fact, the ruling on this field might be overturned just because it wedges open a squirrely can of worms that might never be contained. Telling subs they're paying a buck a month for NBC, CBS, FOX or even ABC could lead enquiring minds to wonder how much they're paying for ESPN or CNN or MSNBC. And that, in turn, could lead those same minds to ponder the question that terrifies everyone: why. Why should anyone pay for ESPN when the household regards sports with the same disdain it holds for dog killers? Why pay for CNN when all the news that's fit is in print?
And how much is all this costing?
As Cablevision Systems' (NYSE: CVC) James Dolan semi-reminded everyone last week, operators have long shielded programmers from the public's wrath by bundling together everything-watched channels, unwatched channels, useful channels, useless channels-into hard-to-decipher packages that combined programming with technology. Families without kids still get all the Disney family friendly stuff. Families with kids still get Bravo's adult content. Liberals get FOX News and conservatives get MSNBC. It's part of the deal that, both programmers and service providers have long held, supports the whole cable TV model.
Now that model is changing faster than new car models--and in pretty much the same way. Sometimes car model changes are wholesale; sometimes they're no deeper than sheet metal. In either case, they're new and improved enough that consumers think something different is happening.
The cable industry is at its new car year stage and it's uncertain whether Apple TV, with its a la carte leanings or Google TV or even ivi--a "revolutionary" service that seems to want to charge $5 a month for broadcast channels, will provide superficial changes with the same drivetrain and different sheet metal or wholesale designs on how television is delivered and received.
If the industry is, indeed, ready to move onto the new model year, it's probably a good idea to tell people how much extra they're paying for the services they get. When that happens, though, it's also a good idea for people to start picking apart those services like they do a new car: throw in the radio, take out the heated seats, toss in the all-wheel-drive, forget the leather. Or, in cable parlance, throw in CNN, forget ESPN, add a little Disney, delete Bravo.
Sure, it's a small thing to add a surcharge to a bill. It's even a neat way to let loose with a little justified whining. It's also a potential electric can opener for a kettle of fare that might just be left better sealed.
Time's running out for suggestions/submissions for the first annual FierceCable 15. We'll start compiling the list next week--with or without your ideas--so if you have a company you feel is worthy of notice you might want to get it into my mailbox at [email protected]