Consumers—Not Cable—Should Select Networks, Marx Says
Cable firms shouldn’t choose which channels to carry because the U.S. market for video programming isn’t competitive, said FCC Chief Economist Leslie Marx. And cable and broadcaster efforts to fight FCC and Hill indecency concerns with parental education (CD Jan 20 p1) don’t go far enough because pay TV customers can’t choose what networks they want to buy, Marx told a Cato Institute forum. “Programming should have to compete on its own in the marketplace,” and industry shouldn’t decide what channels to “subsidize” by bundling them with other programming, she said.
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The $300 million TV ad plan on parental controls touted by former MPAA Pres. Jack Valenti doesn’t go far enough to give people choice about what they want to watch, Marx said: “That would be a fine argument with a highly competitive market.” Broadcasters should let people “choose the channels they watch and not pay for the channels they don’t want to watch,” she said. Arguments from the likes of NAB and NCTA that parents can control how much their kids are exposed to racy shows don’t carry the day, Marx said. “Take that control to the next level,” she urged Valenti.
Valenti wasn’t buying her argument and said Marx skirted the subject of what broadcasters should consider indecent. Marx refused to answer questions from the audience. She was a last-min. substitute for FCC Special Adviser Penny Nance, who couldn’t attend because of a “family emergency,” said an FCC official.
Cable should take cues from pay TV firms in Hong Kong and elsewhere, said Marx. A company called Now TV sells cable channels individually in Hong Kong, which has halved some customer bills, she said. “There’s every reason to believe a la carte would be equally or more successful in the U.S.,” Marx said: “Parents in a variety of other countries have more control… Why shouldn’t Americans have this same power?” Video providers in Canada and the U.K. are also models, she said. She praised Sports Illustrated for not charging subscribers who don’t want its annual swimsuit edition.
The U.S. parental control ad campaign will begin next month, Valenti said. He and other industry officials are working with the Ad Council on commercials that will be informed by “basic research” on the use of V-chips and other controls, he told us. A survey will be taken 9 months into the campaign to “see how effective it is,” he added. He promised “thousands and thousands” of commercials, saying “the great bulk of the cost will come as airtime.” An Ad Council official declined to comment.
Cable operators had devoted 2.5 million min. of airtime to a separate venture as of Feb. in which they touted parental controls, said NCTA Senior Vp Rob Stoddard. Those ads are worth $170 million, he told us, noting that spot values differ widely. Valenti and NAB officials didn’t say how many commercials will be aired and when.