Q. I keep reading that the cable and satellite bundle which has hundreds of channels for hundreds of dollars will soon be dead. They say that people will soon be able to order each channel by itself for a separate price. What they call, a la carte. Do you think this is true? If so, when will it happen? — Marie, Boston.
Marie, the answer is that a la carte won’t happen in my lifetime, and if you’re younger than me, your lifetime, either.
There’s a Wall Street analyst named Rich Greenfield who never resists an opportunity to say the pay TV bundle is dead, or at least, is dying. But all the evidence is to the contrary. People are still getting Triple Play packages, Double Play packages, and they are still getting expensive video packages that offer dozens of channels for anywhere from $50 to $100 a month. (Yes, pay TV bundles are expensive, but they don’t quite cost hundreds of dollars, Marie.)
It might surprise Mr. Greenfield — and many other myopic journalists and financial analysts — that more than 90 million households still subscribe to pay TV. That’s a lot of folks who think the bundle still makes sense, and a lot of folks who aren’t likely to stop getting it, either.
And people who have cut the cord — dropping pay TV service due to high prices, which are undeniably too high — are often getting ‘do-it-yourself’ bundles by subscribing to multiple streaming services such as Netflix, Hulu, HBO Now, Showtime, and Amazon Prime, and perhaps, a multi-channel live streaming service such as Sling TV.
There are relatively few Americans who are just subscribing to one, low-cost TV service such as Netflix. Most people still have some kind of bundle, including, I presume, Mr. Greenfield who I suspect would cringe at the prospect of having a small bundle in his home.
Why is the bundle still strong, despite the growing cost of subscribing to one?
For one, anyone who has cut the cord has found that the bundle is still the cheapest way to get a significant amount of programming. Seriously, today you can subscribe individually to HBO, Showtime, Starz, AMC, CBS, Major League Baseball, NBA, and several other channels and programming services.
But if you do subscribe to all of those channels, you will spend about as much as you used to spend on the pay TV bundle. And you would get far fewer channels in return.
The so-called a la carte method simply doesn’t work economically. Each channel requires a significant monthly fee to offset their expenses. So the more channels you subscribe to via a la carte, the higher your bill will be.
Final note: I will acknowledge the bundle is changing, however. Pay TV companies know that consumers think that most bundles — particularly when wrapped together with ridiculous miscellaneous fees for things like set-top rentals and regional sports channels — are too expensive. So they are offering different, slimmed-down bundles that attempt to appeal to more people.
But even if the bundles come down in price somewhat, they won’t disappear. This is true for the traditional pay TV company, such as DIRECTV, Comcast or Charter, and the new live streaming services such as DIRECTV Now and Sling TV.
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— Phillip Swann