Live Internet Television

Comcast COO Steve Burke Burke sat down with TechFlash yesterday for a 25-minute interview that included his explanation of why a-la-carte pricing for television won’t work.

Why doesn’t Comcast go to an a-la-carte pricing model?

“The easiest answer is that the programmers wouldn’t let us. If you are ESPN and you have all of those football games and all of that greats sports content, you want to be in every home and you want to get paid for being in every home. So there has been a big debate about a-la-carte and flexibility. The fact of the matter is the business model we have all grown up with assumes that you get broad distribution….

This model of having a broad basket of products has really worked and has caused niche channels like Home and Garden or the Golf Channel or other channels – that may live on half a rating point or a rating point — to really thrive. If a-la-carte consumption came along, then all of a sudden those channels were only viewed by 10 or 20 million people, they couldn’t make it. Programmers have demanded that cable companies and satellite companies carry all of their channels for all of their customers.”

Do you see it headed toward a-la-carte with the verticalization of the Internet?

“I don’t. I think the broadcasters and content companies couldn’t survive doing it. As a cable company, since we are so increasingly dependent on high-speed Internet and telephone for our growth, it might not be a bad thing for us. But for the content companies, it would be a terrible thing. They wouldn’t do it. And they would do whatever they could to avoid it.”

What’s interesting about his comments is that they address the question entirely from a provider point of view.

No word on what customers want.

Basically, Burke is saying content producers don’t want to change their model because they don’t trust their content to be able to survive on its own merits. If content producers are depending on cable companies to force-sell their programming to people  who are not actually watching it, isn’t that a model in need of repair?

Burke did a nice job of not discussing Comcast’s interest in maintaining overlapping revenue streams, and of glossing over unfavorable trends in cable subscriptions. According to Home Media, Time Warner Cable CEO Glenn Britt is a little more forthcoming (bold emphasis is mine):

Time Warner Cable CEO Glenn Britt summed up the fears of cable operators this month during the company’s fourth-quarter earnings report.

“As cable networks put more and more content online for free, that will over time start eroding the subscription revenue source. There isn’t a whole lot that we can do about that,” he said, as Time Warner reported a fourth-quarter loss of 119,000 basic cable subscribers. “The reality is we are starting to see the beginnings of core cutting where people, typically young people, are saying, ‘All I need is broadband.’”

Britt echoed the thoughts of most every cable and satellite operator, who are worried about seeing their services cut out of customers’ budgets during this recession. Comcast reported losing almost half a million net subscribers during the fourth quarter. Charter Communications reported losing a net of about 75,000 basic cable subscribers during the same period. Dish Network — which reports its fourth-quarter results March 2 — reported it lost about 10,000 net subscribers in the third quarter of 2008. Cablevision reported losing about 4,000 during the fourth quarter.

As a viewer, left out of this whole discussion, would you welcome a la carte cable model?