Comcast’s desire to buy Time Warner cable in a stock swap brings up old questions about the value of bundling. Cable providers have long maintained the contracts into which they enter with content providers compel them to carry (and pay transmission fees for) a wide range of channels. So the old song lyric, “500 channels and nothing on,” continues to apply.

This is like buying a bottle of cabernet sauvignon of good vintage and even better terroir and being told you have to carry around this keg full of Bud Light along with it.

The entertainment companies (the term “entertainment” used very loosely here) don’t have an interest in helping their viewers watch only what they want to watch. Their goal is to shout. Shout from every network channel they own, even shout about their own shouting (meta shouting), in hopes to gaining eyeballs for advertisers.

The content delivery companies (the term “content” used very loosely here) don’t have an interest in helping their viewers watch only what they want to watch either. They already more or less have a monopoly or a duopoly and don’t really have to change. They have to worry more about regulators than customers fleeing to a competitor, because real competition is nonexistent.

So in the end the consumer ends up carrying around (and paying for) this unwanted keg full of Bud Light, when all they wanted was a nice bottle of cab.

It’s a complex legal and technical conundrum to fix the issues with video entertainment dissemination. But if you’re a business owner, you can learn and apply the simple lessons from this dysfunctional relationship.

Giving your customers an option to have only what they want or need, and seeking ways to provide value (and improve your bottom line) by personalizing and suggesting additional value is the best way to attract and retain customers. Don’t be the business that forces your customers to lug around that unwanted keg. They’ll hate you for it, and will bolt to your competitor at the earliest opportunity. Because unlike Comcast, you don’t have a monopoly.

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This Post Has 2 Comments
  1. Ritter

    I disagree.

    Customers have a pretty decent idea of knowing what they want when they have already experienced that want (I like 1500 thread count sheets; I like tofu). Customers are terrible at knowing what they want when the experience is lacking. Specific to your cable bundling…there are dozens of examples of channels that people immediately dismissed as of no interest to their want that have, over time, become their nice bottle of cab. MTV (well, back in the day), CNN, Food Network, Golf Channel are all ones that quickly come to mind. Taking your “a la carte” approach to programming, these channels would have been dismissed out of hand as “keg”.

    I think it is unrealistic to expect in a broadcast medium to personalize a channel. It’s reasonable to personalize programming (Scandal and Vampire Diaries are phenomenal with their customer interaction), but to expect that same level of personalization for 24/7 programming across a channel is not only unrealistic, but likely unproductive.

    I’m a big fan of many FX programs. Justified is the best thing on TV, The Americans slow-built its way into must-see TV. But no matter how much FX personalizes their programming to me, I’m not too interested in Sons of Anarchy. They can reach out to me with nifty promos (and SoA had some good spots leading into this current season), good soundtrack, excellent casting, great word of mouth and reviews…and I’m still unlikely to watch it. But the 2 hours of FX programming I do watch…sold. 2 hours out of 24 hours * 7 days. I don’t know how much I pay for what amounts to be 164 hours of FX keg beer, but I know the 2 hours of cab is fine tasting.

    A recommendation to you: read The Innovators Dilemma. It’s not being contrary to your commentary, but it is reinforcing the notion that customers aren’t quite smart enough to know what they want next and often reject (ahem, the CD, the DVD) something that later becomes quite ubiquitous.

  2. Bill Holland

    We agree on much here, actually. You’re spot on about consumers not necessarily knowing what they want until they experience it or a friend does and recommends it. The beauty of social media in addition to in-person interactions is all of these shows can be found by the audience on their own through their own natural personal and social interactions. I’m not at all suggesting that a particular channel personalize its programming to a particular viewer. Only that it be available whenever and wherever the consumer wants it.

    But the way entertainment is fed to consumers today is through archaic methods that weren’t formed with the viewer in mind. Bundling channels by a network owner as a condition of carry can on some level, be user centered, but overall no. If we can get past this old way of doing things and rethink how we consume entertainment, interfaces and billing systems can be created that allow people to watch what they want, when they want to, explore new programming and get rid of old programming they no longer want or like. One consumer may want ABC and Disney but not ESPN, while another may only watch ABC occasionally but ESPEN continually. They should have the ability to decide what they wish to see and be billed appropriately for it. But right now, the ABC/Disney watcher pays for roughly $5/mo for ESPN, even though they don’t gain value from it. That’s the crux of my argument.

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