The irony is that porn would easily survive a la carte rules, but more marginal fare might not, even though it gets watched when it's in the whole list of programs.

The problem with information goods is that you don't always know what you want until you get it. Which is why bundling info goods together makes some sense.

Present systems may not be ideal, but an a la carte world might not have the best effects.  Studies I've seen show that consumers might end up paying more for less, and it actually makes sense, since they'll pay almost as much as they do for the prime channels they watch now, but won't toss in anything to sustain their second-tier choices.  

Don't you think shows a la carte would get expensive?  How much would you envision them costing?  I mean, at the moment, I'm watching a few episodes of Entourage I've TiVo'd -- what would it cost me for the season of that?  How much for my season-subscription to New Jersey Nets Basketball (including pre-game and post-game)?  Don't you think that they'd make you pay more for all that than just the channels we have now?  Plus, you couldn't just happen on a program by flipping to it, which can often be fun.  I mean, I would never order an episode of Iron Chef, but I might stop when my remote got to it...

Don't you think that they'd make you pay more for all that than just the channels we have now?  Plus, you couldn't just happen on a program by flipping to it, which can often be fun.  I mean, I would never order an episode of Iron Chef, but I might stop when my remote got to it...

There's a way around this dilemma, and to me it represents the true holy grail of cable pricing (it goes, in other words, well beyond a la carte pricing). I'll call it "metered pricing".

Your cable company would charge you in the same manner as your electricity provider. You'd pay a certain fraction of a penny for each minute (or whatever practical time increment) of TV watched. You might be charged more for HBO than for NBC. Or more for "Desparate Housewives" than for reruns of "Touched by an Angel". Perhaps in order to get this metered pricing option (where every channel they offer is available to the customer) people would be willing to pay an upfront monthly flat fee access charge -- I know I would, if it meant getting out from under the yoke of limited TV choice.

I haven't investigated this topic much, so I don't know if this has been addressed and dismissed by someone already.  But won't a channel, currently part of the basic package, have to deal with the fact that they are no longer going to be accessible in a whole lot of homes when a transition to a la carte occurs?  Meaning won't their advertising rates decline, probably pretty precipitously?  And won't that make a lot of content unprofitable.  And maybe that's a good thing, because hey, if it ceases to be made, it's content that couldn't survive in the free market or whatever, so eff it. 

But I think a lot of niche content that some people really find worthwhile, but that's not terribly popular will disappear.  I mean you could see the current cable trends getting worse under a la carte: where the only thing that gets made is stuff that appeals to either the lowest common denominator or stuff that appeals to very wealthy eyeballs.

You know, just because Republicans are for something, it's not a written rule that Democrats automatically have to be against it. And that goes for vice versa. Republicans & Democrats have alot of the same general goals, but they obviously pursue them in radically different ways, example: Both Democrats & Republicans claim to be for 'Good Government' or 'Government on the side of the people.' Needless to say, Democrats' idea of government being on the side of the people is quite different than Republicans.

 

People are concerned, however trivial you think might feel their concern, about violence & explicit sexual activity on television. We Democrats are sympathetic to the concerns of parents wishing to shield their children from this phenomenon. Not being republicans, who merely stir the 'violence & sex on TV' to drum up support for potential censorship, Democrats are going to help solve this problem by offering parents more choice. Tochoose which channels it wants to subscribe too and to leave off the ones it doesen't. In short, to borrow from Satan aka Dick Morris, we are going to 'solve the other guy's problem'  the result being we solve it in a way that's totally unsatisfying for Reepers, gives the glory to us and takes away a key source of Reeper whining to use to their advantage.

I think you're missing the point. Just because a cable company might  offer  a A La Carte option it doesn't mean that they can't also offer their package deals as well. Furthermore, I expect that anyone who watches more than a two or three channels is going to  buy a package of channels, since that would be cheaper than paying for them A La Carte.

What it might do, which I expect the cable companies would rather avoid, is shed more light on the pricing models for cable programming.  When consumers really see how much of their cable bill goes to expensive channels that they don't watch, generally sports programming, they'll demand that the cable companies offer packages without those channels.

I havent really thought this issue through and through, but you've been mentioning it (since pre-tpm days), could you point out some site/articles that talk about this in some detail?

Here are a few very readable discussions that people might find interesting. They all have links to more information.

Ernest Miller covered

some relevant issues

on his blog last year and also pointed to

this post by Tyler Cowen
.
The previous link also links to this post by Tyler Cowen. Arnold Kling also has

this short observation.

For something a bit longer, try this excellent piece by Andrew Odlyzko. And for something much longer, the book "Information Rules" by Carl Shapiro and Hal Varian is probably a good source.

The take-away message from these sources seems to be that bundling content together as cable providers do allows them to practice a form of price discrimination, which is not only in the providers' interest, but also increases overall welfare. Note that 'welfare' in the previous sentence refers to a fairly narrow economists definition of welfare that says, e.g., getting two things for the price of one is better than getting just one. This definition of welfare may be inappropriate for thinking about cable pricing issues at times. For example, Ross Douthat's observation (cited by Matt above) that ala carte pricing would help him regain the welfare lost to his weakness for channel surfing (a weakness I share) certainly implies that, for him at least, more is not necessarily better when it comes to cable channels.

I meant to reply to this post, but accidentally posted here.

Hope it's helpful.

yeah, I know, ceteris paribus, that's true.  But if you look at the current options, and think, cool I'll just be able to pay for Comedy Central, CNN, and the History Channel, cause that's all I watch anyway, I think you might be surprised to find that some of those options might cease to exist pretty quickly.