For the cable network owners, last week’s Independent Tele-vision
Commission statement on ’bundling’ exceeded their wildest dreams. That’s
bundling as in packages of television channels - nothing to do with
fighting outside football grounds.
The ITC revealed that it doesn’t much care for the practice and has
served notice that it intends to introduce new rules (Campaign, 3 April)
governing cable services.
Following the publication of outline proposals last week, it is now
seeking responses from interested parties. They will include the
direct-to-home satellite subscription system managed by BSkyB and
individual channel operators.
But the most interested party is the cable industry - there is almost
universal agreement cable has been held back by the practice.
At its simplest level, bundling on cable is about the subscription tier
system. The entry level tier will typically include a nugget or two, but
also a lot of dross. The channels you really want to see are on tier
three - but to get them you have to subscribe to tiers one and two. Many
potential cable customers decide not to bother. In some areas, only one
in five homes passed have actually signed up for television
The ITC proposals should allow cable owners to offer a la carte packages
of channels. You want MTV, UK Gold and a premium movie channel? No
’We have maintained that the carriage obligations that are imposed on
pay-TV retailers restrict viewer choice and hold back growth,’ Bob
Frost, chief executive of the Cable Communications Association, said on
hearing the news. ’We want to build a customer-led pay-TV market where
customers can chose from an array of channels and packages.’
Bundling has always been media owners’ way of reminding everyone that
cable is merely about wires in the ground. Cable doesn’t actually make
many programmes so it can’t make its own rules. It’s about power too -
who has ultimate control of distribution in the multichannel
Defenders of bundling say it makes good marketing sense for programme
makers. Why should they sell themselves short? Why let cable owners pick
and choose? Conventional wisdom (in some quarters, at least) has it that
bundling is the acceptable face of conditional selling. So you can only
have the breathtakingly good (well, the kids will love it) cartoon
channel as long as you take the macrame channel too. When the world
turns on to macrame, we’ll all be grateful. It guarantees choice.
Well, perhaps. But it can be used to enforce some very dubious practices
on both cable and satellite distribution. Like splitting a successful
channel into two, each of which gets half of the old channel’s top
programming, with the gaps filled with rubbish. Bundling means the
customer can be given a take it or leave it ultimatum.
And there are those who believe the end of bundling could lead to the
emergence of more genuine choice, especially on cable. For example,
Rapture is a cable channel for teenagers offered in 650,000 homes by
Telewest. It wasn’t easy getting access, even though the concept was
livelier than some other channels designed as bundle makeweights.
The founding partner of Rapture, Adam Stanhope, says: ’From a small
channel’s perspective, our only concern as regards bundling is whether
it restricts the growth of cable. I think there is clear evidence that
it does. From a viewing perspective, we have absolute confidence in our
product. I think we all know there are channels that shouldn’t be there
My only concern is that unbundling might make purchase more complicated
for the viewer and perhaps put them off.’