OPEN MIKE BY MATTHEW POLKA

TV Stations Flip-Flop On Consumer Choice

American Cable Association President Matthew Polka: "The arrival of CBS All Access means at least two positive developments: The forces in favor of consumer choice have won the debate and critics like TVFreedom need to find a new agenda because it is impossible for broadcasters to explain how it’s possible to be 'just a little a la carte.' "

Here’s some news you might have missed: Choice is coming to the TV industry. In recent days, CBS announced the rollout of a product called CBS All Access. For $5.99 a month, consumers can watch their local CBS stations, including the network’s highly rated primetime dramas and sitcoms, without a cable subscription. I’ll say it again: Without … A … Cable … Subscription. Talk about found money!

Unfortunately, there’s a catch. CBS All Access isn’t available to cable subscribers. Only broadband Internet subscribers may purchase the product.

That’s a huge disappointment because cable subscribers deserve the right to access not just CBS All Access but all fee-seeking local TV stations on a station-by-station basis. Fortunately, Sens. Jay Rockefeller (D-W.Va.) and John Thune (R-S.D.) — respectively, the chairman and ranking member of the Senate Commerce Committee — have shown great leadership on behalf of consumers and have proven that bipartisanship is alive and well in the communications policy space.

In August, Rockefeller and Thune unveiled their TV reform plan called Local Choice. It has just a few components and each is very easy to understand. Essentially, each TV station that wants to be compensated would sell its channel directly to pay TV consumers and keep all the money. Bottom line: Retransmission consent negotiations with pay TV providers would be abolished and the record-setting number of signal blackouts initiated by TV stations would plunge to zero.

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The Rockefeller-Thune Local Choice proposal makes a powerful statement in support of the proposition that consumers, once and for all, should have to power to decide how much they want to pay for what the broadcasters like to call “free TV.”

Although there isn’t a meaningful difference between Local Choice and CBS All Access in the eyes of a consumer, broadcasters — based on some unexplained logic — savaged Local Choice when it was first proposed.  

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Broadcasters’ opposition forces included the likes of TVFreedom.org. This front group of some members of the National Association of Broadcasters claimed that Local Choice was invented by the pay TV industry to gain an unfair regulatory advantage and “drive local TV stations off the air.” TVFreedom insisted on the need to retain current law as is and keep on requiring every cable customer to buy the local TV signal package before any other channel sold by the cable operator.

Consumers’ inability to rely on Local Choice to bypass expensive local TV stations will cost them big time. According to Wells Fargo Securities, retransmission consent payments to TV stations from pay TV companies and the customers they must charge for these “free” signals are going to reach $12 billion in 2019, up from about $3.7 billion this year. 

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Before Local Choice was a legislative proposal, the idea of giving consumers more choice in subscribing to individual TV stations was a recommendation crafted by the CEO of Time Warner Cable in an effort to end CBS’s blackout of 3 million Time Warner Cable and Bright House Networks cable subscribers on the eve of the 2013-14 NFL season.  In an open letter to CBS CEO Leslie Moonves, Time Warner Cable CEO Glenn Britt offered to provide CBS stations to those who request them at any price chosen by CBS, with every penny flowing to CBS.

“This way, rather than our debating the point, we would allow customers to decide for themselves how much value they ascribe to CBS programming,” Britt said.

Moonves gave Britt the back of his hand: “As to your groundbreaking ‘offer’ to go a la carte: Anyone familiar with the entertainment business knows that this is an empty gesture.”

Fourteen months later, and just weeks after CBS and its broadcast brethren killed Local Choice on Capitol Hill, Moonves decided the idea of selling local TV stations to consumers individually was so dreadful on its face that he’d race to become the first broadcaster to offer a copycat version on the Internet. Anyone familiar with the entertainment business knows that Moonves has now taken “borrowing the concept” to whole new level.

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So far, not a single independent CBS station (of which there are about 200) has called Moonves on his Local Choice flip-flop. Michael Fiorile, board chairman of the CBS station affiliates, embraced CBS’s decision to give consumers choice.

“I keep looking for a fault in the plan and I don’t see it,” Fiorile said. “I think people are generally pretty pleased.”

To date, neither Moonves nor Fiorile has articulated a rational basis for making CBS All Access available to broadband customers but not to cable subscribers. That’s because there isn’t one. Although TVFreedom has been silent since the news broke about CBS All Access, the NAB members’ proxy has not taken down blog posts slamming Local Choice as “a frontal assault on free and local TV”  and blasting consumer choice as something that has “significant economic flaws” and will have a “negative impact” on “TV programming diversity.”

Clearly, the arrival of CBS All Access means at least two positive developments: The forces in favor of consumer choice have won the debate and critics like TVFreedom need to find a new agenda because it is impossible for broadcasters to explain how it’s possible to be “just a little a la carte.”

Matthew M. Polka is president and CEO of the American Cable Association. He can be reached at 412-922-8300, ext. 14.


Comments (20)

Leave a Reply

Allan Wikman says:

November 3, 2014 at 10:25 am

I want my CBS, NBC, ABC and FOX, but not USA, Disney, History, TNT
TBS A&E, Nickelodeon! Figure that our Amer. Cable Assoc. and you might have a product that will keep consumers from cutting the cord!

    Joanne Nasby says:

    November 7, 2014 at 10:29 am

    It’s called Lifeline or Basic TV

Wagner Pereira says:

November 3, 2014 at 10:38 am

If I want to own a Movie, I can buy it on a Blu-Ray for $20 and have the physical media or I can download it on iTunes from $4.99. Different Medium, different prices, different parameters. Be glad we are not in the UK where EVERYONE WHO WATCHES TV VIA ANY MEDIUM, EVEN OVER THE AIR is charged a TV Tax of 145 Pounds ($200 USD) a year which is given to the BBC. Furthermore, 10% of the court cases in the UK are prosecution of those not paying the TV tax.

    Jeff Groves says:

    November 3, 2014 at 12:30 pm

    If I want to own a movie, I go around to all the garage sales every weekend where I can buy movies and other shows for PENNIES on the dollar (Sometimes for as little for a dime apiece!). Tweekends I scored a HUGE bargain when I picked up a boxful of movies for ONE DOLLAR. I only wish I could remember where I got the movies, because this past weekend I found out one of the movies in that box is worth over $70.00 (Its never been opened)!

    Jeff Groves says:

    November 3, 2014 at 12:37 pm

    Since I can’t return the tape instead I’m going to purchase $70.00 worth of toys, which I’ll donate to my church’s toy drive next month.

    Wagner Pereira says:

    November 3, 2014 at 1:04 pm

    Great for everyone living in the last Century who wants to view 280 lines of resolution VHS tapes. The rest of us still have eyesight and prefer what technology can offer.

    E B says:

    November 3, 2014 at 1:48 pm

    You can buys DVDs at those prices, including Blu Ray.

    Jeff Groves says:

    November 3, 2014 at 4:12 pm

    This particular movie (Meteorites!) is only available on VHS, among others that for some reason or another weren’t released in DVD and/or Blu-Ray. This movie went out-of-print some years ago, which only adds to its value among collectors. And it’s not the only Movie or TV Show that’s worth something. I have a couple of the Gerry Anderson “Supermarionation” Kid’s Shows that sell for almost 200.00! (I bought them when a retailer such as Deep Discount had a “BOGO” sale and I snatched em up for 15 bucks each instead of $30 each). 😀 I have another TV DVD Box Set that’s worth over $250.00! Collectors don’t care if a set is VHS, DVD or Blu-Ray. If it can bring in bucks that’s all that matters.

    PS. Comments about Meteorites! say its a low-budget “B” Movie.

    Wagner Pereira says:

    November 3, 2014 at 7:40 pm

    The difference is between collectors and those who actually open the cellophane and watch them. Glad it looks good on your shelf.

    Jeff Groves says:

    November 3, 2014 at 8:33 pm

    If I would to open it the amount it is worth would drop at least $55.00. This one isn’t just unopened, it was a promotional tape the studio gave to executives in the home video business, most likely for an evaluation before this movie was made available for retail. Considering the revues I read about this film, I’m surprised that it commands the large amount it’s worth. I originally intended to watch it, but when I noticed the label, and noticed it was unopened, I took the liberty o0f checking what a new copy was going for, and was surprised at the price. I have other unopened Movies (Both VHS and DVD) but they nowhere worth as much as this one is (Some new shows, both on DVD or VHS and OOP can be bought on Amazon for $4.00 each! That’s ONE PENNY plus shipping)! Why does this happen? All I can say is that collectors tend to be funny creatures.

    PS. I just bought three HESS Toy Trucks today. Two are going to be donated to a Christmas Charity, the third will join the trucks on my shelf I’ve gathered since 2000, in the box, never to be opened.

    Keith ONeal says:

    November 3, 2014 at 9:49 pm

    The payment of 145 British Pounds a year to the BBC includes Radio (Medium Wave (AM) and FM) as well. As for buying movies/TV shows on Blu-Ray or DVD, just be careful where you buy them from. Major stores are fine, garage sales are iffy at best, but avoid the flea markets; most, if not all of the CDs, DVDs, and Blu-Rays they sell are PIRATED (Illegal)!

Tim Darnell says:

November 3, 2014 at 11:08 am

Is it fair that the only choice to lower escalating cable bills is to delete local channels? Treat local stations fairly and allow consumers to choose to lower their bills by deleting cable channels they do not want as well. This is fundamental fairness.

Jill Hatzioannou says:

November 3, 2014 at 11:21 am

Buried among the usual arguments that we hear in support of “Local Choice”, I saw this nugget in Mr. Polka’s piece, “…retain current law as is and keep on requiring every cable customer to buy the local TV signal package before any other channel sold by the cable operator.” Is it indeed true that the law requires cable customers to purchase the local broadcast package before they can purchase other programming? I was under the impression that this was the cable provider’s choice, not a regulatory requirement. Can someone clarify this requirement?

John Bagwell says:

November 3, 2014 at 11:35 am

You want to talk about flip-flop? A couple of year ago, Matt Polka was quoted as saying: “Current technology
costs make à la carte a financial impossibility for ACA member systems, the business model is
entirely unproven, and no lawful basis exists for imposing regulated à la carte. Moreover, ACA
members report that many customers prefer a basic or expanded basic package with a variety of
channels at a reasonable price.” Now, Matt is apparently in favor of a la carte, but only for broadcasters.

    Don Thompson says:

    November 4, 2014 at 7:22 am

    How many years ago did ACA say this? What was the background for ACA’s comments then? Was ACA referring to Local Choice? The answers would provide some critical context. Please follow me on Twitter @TedatACA

    John Bagwell says:

    November 4, 2014 at 9:33 am

    I believe it was 3 years ago Ted. Why does it matter if it was referring to local choice? Oh, because if it was for local choice, then Matt would have supported it then. But a la carte for cable, then he would have not supported it. Just like his stance today.

    Wagner Pereira says:

    November 4, 2014 at 4:12 pm

    Amazing the ACA VP of Spam cannot remember what was said and in what context. Clearly the ACA just spews things out on a whim depending on which way they feel it supports them that day.

Ellen Samrock says:

November 3, 2014 at 11:37 am

So what if CBS has created a service and app that allows its content to be enjoyed online. Since they own the content that is their right. Does that mean the MVPDs should now be allowed to make money on that same content without compensating CBS? After all, that is the real motivation behind Local Choice; spanking the broadcast nets for wanting to be compensated for content they own and that the MVPDs are making money on. Polka’s and the ACA’s single-minded paranoia of broadcasters is heading into mental illness territory. Once again we have to remind the ACA that broadcast nets are not the bad guys here any more then the cable nets are and who, by the way, also want to be compensated for their content. The real evil, as I see it, is the refusal on the part of cable companies to carry local low power TV stations. They aren’t compelled by law to do it, so they don’t. It’s that simple. Never mind that many LPTV stations originate their own content that would be of interest to local cable subscribers.

Wagner Pereira says:

November 3, 2014 at 12:19 pm

I see Matt still has said how much Matt would be willing to reduce cable bills to compensate for the fact that viewers would have to buy Local Broadcasts a la carte, especially as they are ~35% of the MVPD’s viewing.

    Wagner Pereira says:

    November 3, 2014 at 12:19 pm

    has NOT said


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