by Wayne Friedman , Staff Writer
Source: www.mediapost.com, July 2023
Starting in the mid-1990s and well for a decade after, you could hear critics and consumers complaining that they did not really need the availability of 200 to 300 TV networks on their pay TV service.
They regularly watched a lot less — maybe 10-12 channels at most. And no surprise — they wanted to pay less. And the associated phrase “a la carte” kept being floated.
Now almost 30 years later, we have what consumers have long desired, mostly: Individual media companies’ streaming apps for consumers to pick and choose.
The question remains: Is this what consumers want? Almost.
Big legacy TV-network-based media are now struggling to bring all this to consumers — with billions in annual losses collectively for services like Disney+, Paramount+, Peacock, AMC+ and all the rest.
After starting up these businesses in recent years — amid special launch promotions and low pricing — things could be dramatically changing.
Think higher pricing, more advertising-messaging on streamers, and perhaps more limited TV/movie content. The latter comes from companies realizing they need to generate more revenue from third-party media companies.
Veteran media and advertising analyst, Brian Wieser recently referenced this concept — starting in the 1990s — when then Senator John McCain advocated the idea of ‘a la carte’ selling tv networks to consumers.
Interestingly, at the time, TV network executives rebuffed these calls for change — saying that consumers were getting a great deal where they had access to more than 200 networks for around $50 to $60 a month.
Furthermore, they said if these networks were sold separately, consumers could end up paying more. For example, if consumers didn’t watch sports channels, they would not sign up for say ESPN.
In turn, that would mean TV owners would see a drop in overall subscribers for specific channels from say 90 million to around 55 million, perhaps. And that would mean, media companies would get paid less carriage revenue from pay TV distributors.
While modern streaming has given consumers a lot of flexibility — lower cost, easy access/cancellation, and tons of original and library products — it may not be truly ‘a la carte’, since large, legacy media companies amass all their networks and programming in one streaming app package.
Problem is consumers are increasingly focused on just current or new movies and TV shows. Thus there is lots of churn, canceling and then re-signing back on to a service.
Overall the business is still plagued with billions in losses. So how long is this sustainable?
