Do People Really Want a la Carte TV?

We just got a glimpse of a la carte TV and it makes me wonder if this is what people really want. Poll after poll over the years have shown that people would like to pick their own channels. I’m not sure that many people really want a la carte channels once they see the market reality of the product.

Sling TV just started offering a number of a la carte channels and they are available to anybody. Subscribers don’t need to buy another Sling TV package and can buy just one channel. The company says they are planning on offering more a la carte channels.

For now the a la carte line-up is small. It includes Showtime for $10 per month, which is also available elsewhere on line. The other channels available now include:

  • Dove Channel for $5 per month. This channel is not carried on any cable systems and is marketed direct to consumers. It carries a library of Christian-based programming.
  • CuriosityStream for $6 per month. This is an ad-free network that delivers documentaries and shows about science, technology, technology and nature.
  • Stingray Karaoke for $7 per month. This network carries a big library of karaoke songs that streams both the music and lyrics.
  • Outside TV Features for $5 per month. This network carries a big library of outdoor adventure sports films. This is the network that carries the dramatic footage of surfing, skiing, skydiving and numerous adventure sports.
  • UP Faith & Family for $5 per month. This carries original content and movies that are family-based and faith-friendly.
  • Pantaya for $6 per month. This network carries Spanish movies.
  • NBA League Pass for $28.99 per month. This network carries all NBA games and related content.

Sling TV is not the first one to offer a la carte channels and it’s a big part of Amazon Prime. Amazon carries many of these same networks, and over 100 others. However, you must subscribe to the Amazon Prime service for $119 per year in order to buy the a la carte channels. Amazon has taken the approach of being the biggest bundler of content and has become the portal to a huge array of content.

The only other service with any real a la carte characteristics is the new package offered by Charter, only to their own customers. They provide the local networks in a market and then let a subscriber choose 10 out of 65 networks. This is supposedly priced at $21.99, but the fine print shows there will be other fees, typical of a cable company, and I’m guessing this will cost around $30.

What strikes me most about the Sling TV offering is the monthly fee of between $5 and $7 per channel. How many people are willing to spend $60 to $84 per year for one channel? Surveys by Nielsen have shown that the average family regularly watches about a dozen networks. A price of $5 per channel would mean a price of $60 per month to get the networks a household wants. But local network channels, movie networks and sports networks would likely cost more than $5 and it wouldn’t be hard to see a bill of $75 to $100 to buy only the channels a family regularly watches.

I don’t think this is what households want. When people respond to surveys talking about buying channels individually they were not thinking of paying $5 each. I recall a Nielsen survey from a few years ago where people suggested they would be willing to pay less than $2 per channel if they could buy them individually.

I saw a Google article that said that the Dove Channel had over 100,000 customers. Even if they now have twice that, at $5 per month per subscriber the network would have a monthly income of $1 million. That might sound like a lot, but it’s not enough to support a staff, buy the needed content and also try to fund original programming.

Contrast this with a network that sits today on the traditional line-ups on cable systems. At the current nationwide cable TV penetration rate of 69%, a network that charges only a nickel to the cable companies would make $4.4 million per month. A network like the Dove Channel would need to get nearly 900,000 subscribers at $5 per month to perform as well as traditional cable network that charges only a nickel. You can see why most cable networks are scared of the a la carte model because there are very few of them could survive as online providers.