Why a la carte TV still isn’t happening

Why a la carte TV still isn’t happening

Every so often, I get an email or read a comment online asking why the TV industry won’t just give the people what they want.

As more people abandon cable and satellite TV—or grow up accustomed to life without either—one might think the industry would be open to selling channels individually, or letting customers build their own TV bundles. If such a service existed, surely customers would flock to it and make TV networks richer, right?

Not quite. Over the past few years, TV networks have only become more resistant to breaking up the channels they own, especially as major media companies like Disney and Discovery fatten their channel lineups by acquiring other programmers. They’re not being punished too harshly for it either; while cable and satellite TV subscriptions are spiraling downward, live TV streaming services such as DirecTV Now and Hulu with Live TV have been picking up the slack.

There is hope for a la carte TV, but only from outside the traditional cable channel ecosystem, and if it happens, the results won’t look anything like what people have been dreaming of.

Bundling the bundlers

As a refresher, most of the popular channels on television are owned by a small number of large media companies:

  • Disney’s roster includes ABC, ESPN channels, Freeform, and of course all the Disney channels.
  • Fox owns the main broadcast channel, Fox News, FX, National Geographic, and a slew of regional sports networks.
  • CBS owns Showtime and CBS Sports.
  • Comcast owns NBC, MSNBC, CNBC, Bravo, Syfy, Telemundo, USA, Cloo, and Chiller.
  • Time Warner (now AT&T’s WarnerMedia) owns HBO, Cinemax, TNT, TBS, TCM, CNN, and TruTV.
  • A&E has History, Lifetime, Crime & Investigation Network, and FYI, and is jointly-owned by Disney and Hearst.
  • AMC Networks owns IFC and BBC America in addition to the AMC channel.
  • Viacom owns Comedy Central, Nickelodeon, BET, VH1, and MTV.
  • Discovery owns TLC, Investigation Discovery, and Science Channel.
  • Scripps Networks owns HGTV, Food Network, DIY, Cooking Channel, and Travel Channel.

Cable companies and other TV providers can’t just pick and choose between these channels. Instead, each media company tries to license all of its channels as a package, maximizing how much money comes in from each subscriber. Some networks even require that their priciest channels be included in the most popular TV packages, limiting TV providers’ ability to experiment with different levels of service. (This might explain why Spectrum only offers its a la carte service to existing cord-cutters.) If TV providers want to offer a broad range of content, including full sports coverage, major news networks, and popular entertainment channels, they have no choice but to bundle everything.

The rise of live TV streaming services such as Sling TV, DirecTV Now, and PlayStation Vue hasn’t been the answer. While some networks are excluded from certain live TV bundles, the most expensive networks—namely, the ones with all the sports programming—are included in almost every package. If anything, live TV streaming services have become more bloated and homogenous as they pursue the broadest swath of subscribers.

youtubetv1 Jared Newman / TechHive

YouTube TV was one of several live TV services to raise prices by $5 per month this year, after adding Turner-owned channels.

The current climate of media merger mania has only compounded the problem. Discovery acquired Scripps Networks in March, and Disney plans to acquire assets from Fox (including FX and National Geographic). To satisfy regulators, Disney has agreed to sell off Fox’s regional sports networks, potentially putting them in the hands of AT&T, Comcast, or another major media entity. The result will be even more bargaining power for TV networks that want to package all their channels together.

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