If the future of TV is paying only for the channels you want, the big question is how much each channel should cost.
A new study indicates that consumers and pay-TV companies are far apart on this score.
Yet it also suggests that the pay-TV industry would be foolish to ignore consumers’ clear preference for a la carte programming choices.
“The warning sign for industry executives is that as a la carte options become more available and easy to use, consumers will gravitate toward them,” said Paul Stathacopoulos, vice president of strategy for the digital recording company TiVo, which conducted the study.
TiVo surveyed roughly 2,000 Americans about their viewing preferences. More than three-quarters said they wanted a la carte channels.
Of that number, survey respondents said they would need only 18 channels on average to create the perfect a la carte lineup.
That jibes with data from the ratings firm Nielsen, which says the typical American pay-TV customer watches just 17 channels on a regular basis, a small fraction of the many channels forced down people’s throats in fat programming bundles.
TiVo’s survey respondents named ABC as their most-desired a la carte channel. About 66 percent put it on their wish list. ABC was followed by CBS (63.5 percent), Discovery Channel (62 percent), NBC (61 percent) and History (56 percent).
Rounding out the top 20 were, in order, Fox, A&E, PBS, TNT, FX, HBO, AMC, TBS, National Geographic, USA Network, Food Network, Comedy Central, HGTV, ESPN and the Weather Channel.
It’s striking that ESPN was such a low priority for most people. In Los Angeles, sports networks account for as much as $25 of average pay-TV bills, according to the consulting firm SNL Kagan.
As for pricing, here’s where things get really interesting.
We already have a strong sense of the industry’s preferred prices thanks to Canada requiring that its pay-TV services offer subscribers a la carte channels. Many channels north of the border cost about $2.25 a month, but the more desirable channels, such as AMC and CNN, can surpass $5 apiece.
TiVo’s respondents made clear that Canada’s a la carte prices are significantly higher than what U.S. customers think they should pay.
For example, the average monthly price people said they would pony up for ABC, the single most popular channel, was just $1.25 monthly. Overall, TiVo’s respondents saw fair value in paying about $29 a month for their 20 favorite channels. The average cable bill now tops $100 a month.
Stathacopoulos said it’s possible that U.S. consumers have been influenced by providers of so-called skinny bundles, such as Dish Network’s Sling TV, which offers cord cutters a starting rate of $20 a month for more than 30 channels.
Stathacopoulos said the industry is coming around to the inevitability of a la carte and is experimenting with ways to make stand-alone services more attractive.
Like I say, though, the industry and consumers are nowhere close on pricing. CBS All Access, with all its digital bells and whistles, costs $6 a month.
The TiVo study found that consumers see CBS being worth closer to $1.25 monthly.
And so the dance begins.
David Lazarus is a Los Angeles Times columnist.