Carey claims customers still want bundles
Customers who hope that cable companies will allow them to subscribe on a channel-by-channel basis need a reality check, 21st Century Fox COO Chase Carey said Tuesday at the UBS Global Media and Communications Conference in New York.
“A la carte cable is a farce,” Carey told the Wall Street heavy audience. “People want bundles, they just want different bundles.”
In recent years, the pay TV industry has been buffeted by tense negotiations between cable companies and content creators over programming fees, leading to a series of blackouts in major media markets when talks break down. Each pulled signal, in turn, prompts calls for government action and an overhaul to the way that the TV industry is structured.
21st Century Fox maintains a suite of channels such as Fox News and FX that allows it to charge cable companies big fees for the rights to re-broadcast its content, so it clearly has a dog in the fight. For content creators, the current structure can be enormously lucrative because it enables them to package less popular channels with more desirable ones.
Professional allegiances aside, Carey said that the idea of a la carte is being used by cable providers to “drag, in some manner, Washington into the discussion.”
If that is indeed the goal, that strategy has been partly successful. In recent months, Sen. John McCain has introduced legislation to allow customers to pick and choose the cable stations they subscribe to instead of forcing them to sign up for bundles, although his proposal has generated little traction and probably won’t ever be voted on by the Senate.
Carey acknowledged that customers would like to pay less for cable, but said the costs of cable “looks good next to five-dollar lattes.”
He added that the debate around a la carte is a distraction, and argued that the focus by television industry should be on improving offerings that add value to the consumer experience such as “TV Everywhere,” which allows user to access cable via mobile devices.
“TV Everywhere is the right path, but it has been poorly executed to date,” Carey said.