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Executive Editor's Letter: A Decent 2006

Cable World, Jan 9, 2006

By John P. Ourand

This being the first issue of the year, I feel obliged to make a few predictions about what we will or won't see in 2006. I've boiled it down to two:

1. The indecency flap effectively is over.

2. Nobody will subscribe to family tiers.

With the introduction of family-friendly tiers this quarter, cable probably has done just enough to mollify politicians and regulators on indecency. That should mean the issue will be taken off the table in 2006.

The scuttlebutt inside the Beltway is that Kevin Martin has political aspirations beyond being chairman of the FCC. Now when he campaigns for Senate in North Carolina (as he's expected to), he can say that he held cable's feet to the fire and made it take real steps toward solving the indecency issue.

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Congress isn't likely to push cable any more. Congressional sources from both sides of the aisle continue to insist that they aren't hearing a public outcry for family tiers or a la carte. They are hearing some complaints about programming that is coarser than it needs to be. But the public hasn't rallied around family tiers or a la carte as a solution.

The problem is that cable's family tiers are doomed to fail. The tiers do not address the complaint that people want an expanded basic tier that simply doesn't have MTV or FX. Comcast and Time Warner Cable put poorly rated networks on their tiers--only Disney Channel brings high ratings for either tier.

Second, the family tier experiment already has been tested and failed miserably with DirecTV earlier this decade. That was when the DBS service made a family tier of eight channels available for $5. The nets were similar to cable's tiers and included the pre-Hallmark Odyssey, Biography, Discovery Kids, DIY, Boomerang, Oxygen, PBS Kids and SOAPnet.

DirecTV's tier had fewer than 1 million subscribers and lasted for just two years before wasting away. DirecTV execs will tell you that nobody seemed to notice when the family tier vanished. And execs from the networks on that tier will talk about how they were desperate to leave it.

It looks like we've ended up with the perfect D.C. deal. Politicians invent a problem that plays well in the heartland. Cable develops a solution that nobody wants. Politicians save face and talk about how they brought standards to cable. Cable saves face and rolls out tiers that are designed to fail.

Once nobody subscribes to the family tiers, expect some of the indecency forces to renew their calls for a la carte. Even with the FCC's new a la carte study, it's difficult to see any form of a la carte regulation getting passed.

This means that cable can regroup and get ready to fight real battles over net neutrality, copyright and franchising.

Technology Industry

Executive Editor's Letter: A Decent 2006

Cable World, Jan 9, 2006

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