A La Carte TV Pricing Would Cost Industry Billions, Report Says
Consumers want to choose the channels they get from their pay-TV providers but such a move would not only undermine the business model for media companies, it could also lead to higher prices for customers, according to a new report by Needham & Co.
Few have been able to put a price tag on the cost to the industry of a la carte programming, but Needham & Co. media analyst Laura Martin took a stab at it in her study.
“Our calculations conclude that $80 billion to $113 billion of U.S. consumer value would be destroyed by this shrinking channel choice,” Martin wrote in her report, released Wednesday.
She determined that the economic costs would be enormous because so many smaller channels would disappear — at least 124 channels — wiping out an estimated 1.4 million jobs in media.
Martin figured that at least $45 billion in TV advertising would be at risk.