You want ala carte, you got ala carte.
Its called the internet. Every single major cable and telephone company offers high speedaccess to the
internet and they allow you to pick andchoose the content you want to view.
The internetis the definition of ala carte program. Every type of programmingimaginable. All there for
you to find and choose what you want, when you want it. Some witha price tag. Most for free.
Openup your favoritesearch engineand put in the name of the program you want. Or put in the type
of programming you want. Its your Electronic Programming Guide. If its there and available you can find it.
Want to set up “channels” just so you can make it a little easier for you and the not so literate internet folks
to understand ? No problem. There have been standards to define programming channels on the net since IE 4.0.
Or you can just bookmark your favorite kids or family friendly websites and limit use to those sites.
Ala carte. Just the way you want it.
But its not on TV you say ? Well thats easy. Buy a
wireless RF transmitter for under 70 bucks. Plug it into the video out of your PC. Plug the reciever unit to the
video in of your TV. Start the video on the PC and boom, you are watching the video on your TV. Any TV. The old
black and white or the new plasma.
Its easy. I bet for another 50 bucks, you can get the cable company or any 17 year old to come set it all up for
you. There you have it. Unlimited choice. Complete ala carte.
The only thing missing is that traditional programmers havent flocked to create programming for this unlimited
choice universe.
its the beauty of capitalism. Where there is opportunity, you can find cash deployed to capitalize. But you
cant find it on the net. You can find inexpensive content. If its cheap and easy its created specifically as
programming for the net. But is there a single example of a million dollars spent on a show exclusively for the net
?
There should be. The potential customer base consists of 90mm broadband users in the USA. 100s of millions
across the world. Any programmerwith a high speed data line can reach any of them. Yet no one chooses to invest
an amount equalto even the least expensivebroadcast network show. Why ?
Because in an ala carte world, the cost of reaching an audience is outrageous. And consumers arent ready to
pay the freight to receive that programming.
As i have said before, the movie market is ala carte. Look at which content rises to the top in terms of
revenues from consumers and visibility. The content from the biggest companies who have spent the most money to
market .
Our movie from HDNet Films,
Enron- The Smartest Guys in the Room cost a relatively small $770k to
make, but we needed to spend millions to create visibility for the film. When we tried to get creative and
offer the film dayand date with its release on HDNet Films, the big theatrical chains got together and
decided they wouldnt carry it. Despite our unique offer to share in the revenues from the sale of the DVD. The
point being that if video distribution goes ala carte, the response from the powers that be wont be to embrace the
change. It will be to find ways to circumvent the change to their advantage.The movie industry is the perfect
example. Despite the fact that anyone with a videocamera and PC can produce a movie, the cost to get it to consumer
in an ala carte movie world, precludes all butthebiggest and/or very, very fortunate from reaching an
audience large enough to break even on a movie release..
Despite the fact that big movie studios could produce many, many movies for consumption, they produce a limited
number every year because they have pushed the cost to market a movieto such extremes. In their
alacarte movie market, they cant afford the risk. Is that where you want the TV business to go ? Do you want TV
production companies and networks to have to spend tens of millions ofdollars on each new show to make sure
that enough people watch and continue their ala carte selection of the network hosting the show ?
But wait, there is more to consider. There are technological considerations. Let me give you a phrase that you
will hear for the next 100 years when it comes to video distribution and I promise you , it will haunt you in an ala
carte world. That phrase is : “Bits are bits”
What that means is that digital bits dont care what type of data they carry. They are agnostic. Telephone
conversations. Ok. Video. Ok. Internet traffic. Ok. Video Conferencing. Ok. Medical Applications. Ok. Software
applications. OK.
Every video distributor is limited in the amount of bits they can carry to the bandwidth they have. The
valuation model of the cable industry is quickly turning into a revenue per bit maximization model. Which cable
MSO can sell the mix of digitalbits that maximizes the return on the number of bits available. Call it
Bit to Revenue Optimization.
If you muck up the video distribution side of the business so that video distributors, be they cable , satellite
or telco find that the return for bandwidth allocated to TV programming is less than bandwidth allocated to non video
applications, you got a huge problem.
You see, video bits require the most hand holding. They have to arrive with all the other bits that are part of
the TV show in a nice, neat continuous stream (net of some buffering of course). When those video bits are
part of medical or video conferencing applications, both the originators and the users expect to pay a little more.
When those bits are part of a TV show, they expect to pay a lot less.The model works today because the
aggregation of all those bits creates a price and experience that not only people are comfortable with, but that
consumers feel like they cant live without. Ask a politician whether his constituents will be happy if it turns out
that his/her push for ala carte results in less choice and higher prices ?
In an ala carte world, the ala carte applies not just to consumers choosing between TV networks, but distributors
choosing which applications to offer. Cable MSOs, Satcosand Telcos want their stock price to go up. They want
to make more money. There is the very real possibility, and I would say likelihood that as new software applications
come along, and they will, they could successfully compete for bits on distributors networks to the exclusion of TV
bits. Im not saying digital TV would go away, it wont. But could substantially less bandwidth be allocated to TV ? Of
course.
So, to all of you at the FCC, be careful what you ask for. That knock on your office door that today has people
saying they dont want to pay for channels they dont want, tomorrow could be people asking why you let them change
everything when it used to work so well.
And a word of advice to take or leave as you see fit. Its always a mistake to listen to your customers. The goal of
any organization should be to give their customers or constituents what they will want, not what they did want. Its
not the job of the customer to know their future consumption habits. Its your job.