SPOTLIGHT ON: CABLE CHANNEL SELLING: How the end of TV ’bundling’ could improve viewer choice - Cable will benefit if the ITC rejigs the way TV channels are sold

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.

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

services.



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

problem.



’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

environment.



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.’



Become a member of Campaign from just £46 a quarter

Get the very latest news and insight from Campaign with unrestricted access to campaignlive.co.uk plus get exclusive discounts to Campaign events

Looking for a new job?

Get the latest creative jobs in advertising, media, marketing and digital delivered directly to your inbox each day.

Create an Alert Now

Partner content

Share

1 Job description: Digital marketing executive

Digital marketing executives oversee the online marketing strategy for their organisation. They plan and execute digital (including email) marketing campaigns and design, maintain and supply content for the organisation's website(s).