Later this week during his Speech to the Crown, Canadian prime minister Stephen Harper will reveal new regulations demanding cable companies allow consumers to choose their own cable channels in lieu of buying channels packaged into bundles. If the move succeeds, there's a better chance cable companies in the U.S. will finally offer à la carte cable. If it fails, the chances for customized TV will probably die.
"We don't think it's right for Canadians to have to pay for bundled television channels that they don't watch. We want to unbundle television channels and allow Canadians to pick and pay the specific television channels that they want," Industry Minister James Moore said on CTV's Question Period. "It’s not a command economy, we’re not going to put in place onerous regulations. We’re a government of deregulation," Moore added. "But from time to time, we think that the best interest of consumers need to be enforced in the marketplace." While the idea of no longer paying for things you don't use is appealing, much of the analysis of à la carte pricing has predicted that it could lead to people paying more for the television that they do want than what they pay now. But with Canada going headlong into à la carte, we will get to test the theories.
Two Canadian cable companies — Telus and Quebec's Videotron — already offer à la carte options, and according to an analysis by Reuters report in September of the per-channel offerings already available, they're relatively successful with customers.
But the pick-and-play paradise may not have the green grass you expected. Videotron, a cable company based in Quebec, offers a scaling flat rate package for their pick-and-pay service. The least expensive option is $37 Canadian; you receive a base set of mostly broadcast channels and then can choose 5 from a list of 32 channels that include American networks like CNN, NBC, Fox, ABC, and PBS. The more you pay, the more channels you can add, up to the highest price plan of $55 a month with 30 additional channels. You're limited to selections of 5, 10, 20, or 30 channels, but you can see the power of bundling at work in the pricing: the 25 additional channels you can get by stepping up from the cheapest plan are only priced at $0.72 apiece. Meanwhile, Telus, which is one of Canada's major providers of cable, phone and Internet service, has a stripped-down package that costs $29 Canadian [PDF] and is mostly filled with local news. Users can then buy channels in pre-packaged theme bundles at $9 per month per bundle, or pay a whopping $4 dollars per month for individual channels. It's a great deal if you just want to add the sports channels (for a monthly total of $38) or, for some reason, just ESPN Classic ($33) but would soon get very expensive if you tried to create a familiar cable bundle minus all the cooking and lifestyle channels. And there's an extra catch: the package is only available if you bundle it with with Internet, home phone or mobile phone service.
Cable companies in the U.S. have received plenty of scrutiny recently for not providing viewers with the opportunity to pick their own channels. The soaring costs of cable bills, thanks primarily to very expensive sports channels like ESPN, have prompted calls for choose-your-own cable channels from as powerful people like Sen. John McCain. U.S. cable executives will probably be watching how their free Canadian trial program goes to see if à la carte cable is actually sustainable.
The new à la carte channel rules are part of a "consumer-first" initiative by the Canadian Radio-television and Telecommunications Commission, Canada's broadcast regulating body, who previously urged cable companies to offer pick-and-pay options in 2011. They're also looking at putting caps on how much cell phone companies can charge for international roaming. (Please, please, fix that.)