Cable executive backs per-channel sales

Dolan says move would make service more affordable


Breaking ranks with his compatriots in the cable industry, Charles F. Dolan, chairman of Cablevision Systems Corp., said yesterday that he supports giving consumers the option of paying only for the channels they want, not just the large bundles of channels that are typically offered.

Dolan's statements supporting so-called a la carte pricing comes days after similar comments from Kevin J. Martin, chairman of the Federal Communications Commission.

Letting consumers choose the channels they want "will result in a more affordable service for all with more programming options," Dolan said in a statement. "Consumers should not be obliged directly or indirectly to buy services they do not want."

Dolan, who has publicly supported a la carte programming since at least 1998, is widely considered a maverick in the industry, but also a farsighted one. In repeating his call for more flexible pricing plans, Dolan may be goading the industry to become more flexible in its offerings.

Operators have long opposed selling a la carte programming because they say it would lead to less choice, not more. The revenue generated by the most popular channels, operators say, make it possible for them to carry the less popular ones.

Kyle McSlarrow, president of the National Cable and Telecommunications Association, said Tuesday that "pay-per-channel regulation would be likely to hurt consumers by increasing prices, decreasing choice and reducing diversity in programming."

Cable companies have spent billions of dollars expanding their networks to carry hundreds of channels, as well as high-speed data and phone services. Some cable companies' spokesman have argued that the companies would be left with a lot of unused capacity on their networks if they sold only a few channels at a time.

Despite support from Dolan, the FCC, consumer advocates and some lawmakers, there is no indication that cable companies, including Cablevision, are any closer to selling a la carte programming. Martin's comments were a recommendation, not a regulation.

Cable companies would have to renegotiate hundreds of agreements with programmers, many of whom would rather be sold as part of a larger package of channels instead of on a per-subscriber basis. It is also possible that buying a small number of channels would be only marginally cheaper than buying a large bundle of channels.

For now, cable companies sell only some premium channels, such as HBO and Showtime, on a subscription basis. But some industry analysts say that it is only a matter of time before they are pushed by competitors to sell more of their programming on a per-channel basis.

AT&T Inc., for instance, which will soon start selling a television service, is willing to sell a la carte programming as long as the networks agree to sell it that way. Walt Disney Co. and other programmers are also starting to sell individual television shows over the Internet and cellular networks.

Cable companies may ultimately design small packages of programs with a few extra choices to appeal to cost-conscious consumers who have gravitated to cheaper satellite services, said Sameer Mithal, an analyst at Adventis, a telecommunications consulting firm. "It would be like buying a salad: You pick between spinach, iceberg or romaine lettuce, and then you choose four or five toppings," he said.

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