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Back to Articles page at TNG Research The Family-Friendly Feudby Dave Zornow The family friendly initiative has something in it for everyone. It offers the majority the seductive promise of reduced cable fees. For the minority, outraged about “indecent” programming, it promises to create TV parents can watch with their children. When both groups are ultimately disappointed, they shouldn’t blame cable. To borrow a phrase from the 1992 presidential campaign, “it’s the economy, stupid.” FCC Chairman Kevin Martin, speaking to the Senate’s Committee on Commerce, Science and Transportation in November said “[one] option would be to allow consumers to choose specific…channels…10 channels for $20, 20 channels for $30 etc. Parents then would be able to receive – and pay for – only that programming that they are comfortable bringing into their homes.” Not surprisingly, the NCTA – cable’s lobbying association – disagrees. A July 2004 Booz Allen study, commissioned by the NCTA, documented the non-intuitive way cable economics work. “Consumers would either pay more than today for far fewer channels, or would need to select as few as six cable networks to reduce their monthly bill below current levels.” George Mason Law School economics professor Thomas Hazlett agrees with the less-is-less prediction of the NCTA. “Society gains nothing - not a penny of cost savings - by removing these signals from potential eyeballs,” Hazlett wrote in an April 2004 Financial Times article. Hazlett says consumers are wrong to think they are paying for channels they don’t want. “The first unit often costs oodles to create, while the next billion units are free” and “the shows you don’t feel like paying for are essentially tossed in,” he says. A former FCC chief economist, Dr. Hazlett updated his 2004 assessment in an email last week. “Current proposals will probably be 'simply' ineffectual, meaning that any 'a la carte' or 'retiering' will be priced so as to be fairly irrelevant.” If the FCC is acting in the public interest by pressuring MSOs to create these tiers, it makes you wonder *which* public for whom they are speaking. Many of the channels likely to be excluded from the family friendly tier are some of the most watched. Ratings data prove people tune out shows they don’t like; it stands to reason that the people who like this programming far outnumber those who find it objectionable or these shows wouldn’t be commercially viable. Is it truly in the public interest to tamper with the economics of an industry just to satisfy handfuls of people who can’t figure out how to use a remote control or a V-Chip?# Dave Zornow is President/TNG Research, a media research consultancy and applications development company that works with media sellers and research providers. |