What's the Latest Development?
This weekend, Canadian interior minister James Moore said the government plans to force cable companies to unbundle their services, allowing customers to pay only for the channels they want to watch. While it's likely that the television industry will fight this initiative, one company, Telus, has doubled its customer base by offering a variation on this model: Their streamlined basic package allows customers to pay $4 for each additional channel.
What's the Big Idea?
For those who wonder why they have to pay for all those mysterious, never-watched channels in the cable guide, the idea of à la carte cable sounds great. However, there are several big hurdles preventing it from becoming a reality, particularly in the US. A recent Needham Insights study showed that television industry revenue could drop by half if bundled cable services went away, and many obscure channels would disappear as well because they are largely supported by the financial success of more popular channels. Also, it's likely that the price of those popular channels would go up in order for cable companies to make the same amount of revenue.
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