Give cable TV subscribers more freedom of choice

Obama's nominee for FCC chief should work to dismantle the business model that requires viewers to pay for dozens of channels they will never watch.

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President Obama has nominated venture capitalist Tom Wheeler, a former lobbyist for the cable and the wireless industries, to serve as head of the Federal Communications Commission. "Tom knows this stuff inside and out," Obama said.

If that's true, I can only assume that high on Wheeler's to-do list will be a dismantling of the antiquated business model that forces cable and satellite subscribers to pay for dozens of channels they will never watch.

It's also a system that can result in a favorite channel disappearing not because it didn't have an audience but because it didn't generate enough profit for a cable or a satellite provider.

That was apparently the case with Ovation, a Santa Monica arts channel that got the heave-ho from Time Warner Cable in January because of "steeply escalating programming costs."

"Ovation is among the poorest performing networks and is viewed by less than 1% of our customers on any given day," Time Warner said at the time.

I spoke with Chad Gutstein, Ovation's chief operating officer. He said he'd be thrilled with anywhere close to 1% of Time Warner's 12 million video subscribers.

"That's what is known in television as having a '1 share,'" Gutstein said. "A 1 share is considered really good."

He said the real reason Ovation was axed was because it wasn't owned by some media behemoth that could bundle the arts network with other channels and demand that cable and satellite companies carry the whole package.

That's how the likes of Disney, Fox and Viacom foist their channels on pay-TV subscribers, regardless of whether subscribers want them.

By Gutstein's reckoning, Ovation was an easy target for a cable company that was eager to demonstrate to customers and shareholders that it's working to lower costs.

He shared with me a list of almost two dozen other channels that, according to the ratings company Nielsen, attracted fewer viewers than Ovation. They included NBA TV, the Outdoor Channel, VH1 Classic, Fox Business Network, the Golf Channel and ESPN Classic.

"Most of these other channels are owned by a big media company," Gutstein said. "They're part of bundles."

I'll be honest: I hardly ever watched Ovation. It's not that I don't enjoy the sorts of programs it features — music, dance, theater, movies. I like all that.

It's just that I'm like most people, and most people, according to Nielsen, watch only about 17 channels on a regular basis.

But the choice of whether to watch Ovation should be mine to make, not Time Warner's.

Moreover, if I have to pay for more than 100 channels that I have no plans to watch, I'd rather pay a few cents a month for a channel that supports the arts instead of the $5 that I have to pay for ESPN, or the $4 each that I have to pay for Time Warner's own Lakers and Dodgers channels.

Maureen Huff, a Time Warner spokeswoman, said the decision to give Ovation the boot wasn't based solely on the channel's ratings.

"We're also looking at cost and uniqueness of content," she said. "It's a combination of all that."

Well, cost doesn't seem like a big issue, since Time Warner subscribers paid only about 7 cents a month for the channel. And Gutstein said Ovation was seeking only about a 4% increase in payment from Time Warner in its latest contract talks with the cable company.

AMC, of "Walking Dead" and "Mad Men" fame, reportedly sought a pay hike of more than 500% from satellite provider Dish Network in contract negotiations last year. Viacom reportedly wanted a 30% increase from DirecTV for its 26 channels.

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