ALLBLK has renewed its Meagan Good-produced original dramedy series À La Carte for a second season.

The series stars Kendall Kyndall and Jenna Nolen as millennials who are navigating life and the dating scene. In the second season, the cast will continue their independent and collective journey discovering and unraveling who they are through the lens of comedy, love, sex, fire and trial and error, said the streaming service. 

Also starring in the series are Pauline Dyer, Jessie Woo, Courtney Burrell, Robinne Lee and Kandi Burruss. 

À La Carte is directed and executive produced by Good and Dijon Talton.

“À La Carte was an instant success for ALLBLK, feeding our subscribers’ desire for authentic, compelling, highly entertaining Black stories,“ ALLBLK and WE tv general manager Brett Dismuke said. “Bringing the series back for a second season wasn’t even a question. À La Carte expertly fills a void on scripted television that focuses on the experience of Black young adults as they navigate love, loss, careers and more.
We’re grateful for our partnership with Dijon, Meagan, The Talton Company, Prodgii and the other series producers and outstanding cast.” 

The state of Maine has conceded that the law mandating cable a la carte violated the First Amendment, so it will not be enforced.

According to the Portland [Maine] Press Herald, the Maine Attorney General is no longer defending the law, and in fact has conceded that it ran afoul of speech protections.

In 2019, Maine passed a law requiring cable operators, but not other video distributors, to offer every channel and program a la carte, rather than bundled in a channel or tier of channels. Customers would have to buy the basic package before having the a la carte option for other channels and programs.

Comcast, A&E, C-SPAN, Discovery, The Walt Disney Co., Fox Corp., NBCUniversal, ViacomCBS and New England Sports Network (NESN) sued Maine Gov. Janet Mills, state Attorney General Aaron Frey and various cities and towns.

They argued the law was unconstitutional because it singled out cable speech for regulation, but excluded satellite or online video distributors, and said the law was pre-empted by the federal Communications Act. They then sought a preliminary injunction to block the bill’s implementation while the legal challenge was heard.

A district court enjoined enforcement of the law while the legal battle was waged. The U.S. Court of Appeals upheld the injunction, but according to the paper both parties asked the court to rule in favor of the cable challenge and the district court agreed, closing the case and meaning the law can't be enforced.

The Parents Television and Media Council, long a backer of a la carte as a way to give parents more control over the cable programming that comes into their homes, was not pleased.

“Yet again, the cable industry was able to wield its massive financial resources to thwart commonsense efforts by legislative, judicial and regulatory agencies attempting to give Americans greater control over the TV content they want coming into their homes," said PTC President Tim Winter. "This time it was a slick legal argument suggesting that the cable industry had been ‘singled out’ by the legislature. But the reality is that cable was only ‘singled-out’ because it is the only industry that forces a product bundle onto all consumers."

A U.S. appeals court has given cable operators hope that they won’t have to start offering channels and even individual programs a la carte in Maine. But the fight may not be over, and over-the-top platforms and satellite providers could conceivably be brought into the discussion. 

In 2019, Maine passed a law requiring cable operators, but not other video distributors, to offer every channel and program a la carte, rather than bundled in a channel or tier of channels. Customers would have to buy the basic package before having the a la carte option for other channels and programs.

Reports that the court had thrown out the law were premature. Instead, it upheld an injunction against enforcement as currently written, but suggested the law could be rewritten to pass constitutional muster.

There is definitely a high bar for granting the injunction, as a Maine district court did, and for upholding it, as the 1st U.S. Circuit Court of Appeals has done — including likelihood that the cable operators and programmers challenging it would win at trial. So there was definitely cause for some celebration.

Comcast, A&E, C-SPAN, Discovery, The Walt Disney Co., Fox Corp., NBCUniversal, ViacomCBS and New England Sports Network (NESN) sued Maine Gov. Janet Mills, state Attorney General Aaron Frey and and various cities and towns in federal court. They argued the law was unconstitutional because it singled out cable speech for regulation, but excluded satellite or online video distributors, and said the law was pre-empted by the federal Communications Act. They then sought a preliminary injunction to block the bill’s implementation while the legal challenge was heard.

The 1st District concluded that a la carte is a speech regulation that requires heightened scrutiny, another high bar and one that Maine conceded its evidence did not clear. The district court granted the injunction, saying that while the law did not impinge on cable operators’ editorial discretion it did single them out for disparate treatment.

The appeals court agreed that the law implicated speech and, given Maine’s concession, affirmed the district court injunction. But the 1st District ruled the law was not pre-empted by the cable act, leaving open the possibility a different a la carte law might pass muster.

The appeals court made it clear it was simply affirming that the lower court was reasonable in granting the preliminary injunction against enforcement based on the law as written and the evidence presented by the state, not whether or not an a la carte video law could be constitutional if crafted differently.

The appeals court agreed with the lower court that the Maine law, which required cable operators to offer individual channels and programs, implied speech and thus required a higher level of legal scrutiny.

Maine conceded its case can’t meet that heightened scrutiny. But the legislature could always rewrite the law along lines the court suggested. “We leave open the question of whether [the law] would trigger ‘singling out’ concerns if it applied across the board to all pay TV systems, including satellite- and internet-based ones,” the court said. 

The U.S. Court of Appeals for the First Circuit has upheld a district court's injunction against Maine's cable a la carte law, concluding that the lower court did not abuse its discretion in granting the preliminary injunction.

Also Read: Judge Blocks Maine A La Carte Law

In 2019, Maine passed a law requiring cable operators, but not other video distributors, to offer every channel and program à la carte, rather than bundled in a channel or tier of channels. They would have to buy the basic package before having the à la carte option for other channels and programs.

Comcast, A&E, C-SPAN, Discovery, Disney, Fox Cable, NBCU, Viacom and New England Sports Network sued Maine's governor, attorney general and and various cities and towns in district court arguing the law was unconstitutional since it singled out cable speech for regulation, but not satellite or online video distributors, and was preempted by the Communications Act. They then sought a preliminary injunction to block the bill's implementation while the legal challenge was heard.

The bar for an injunction is high--four different factors must be met: 1) probability of success, 2) irreparable harm to the plaintiff if the injunction is not granted, 3) the balance of harms if the injunction is not granted tilts toward the plaintiff, and 4) it serves the public interest. 

The district court concluded that it was a speech regulation that requires heightened scrutiny, another high bar and one that Maine conceded its evidence did not clear. The district court granted the injunction, saying that while the law did not impinge on cable operators' editorial discretion, it did single them out for disparate treatment.

Also Read: Court Blocks A La Carte Law

The appeals court agreed that the law implicated speech and, given Maine's concession, it affirmed the district court injunction.

The appeals court said the district court can now decode which level of heightened constitutional scrutiny applies, whether the state can offer "post-enactment" evidence to support the law, and "even whether, on a more fulsome record, the state law is preempted." On the current record the district court concluded it was not preempted.

The appeals court also said it was leaving open the question of whether the law would trigger "singling out" concerns if it applied to satellite and internet-based distributors, saying a fair reading of the law is that the broader the scope of a regulation, the less likely it will raise First Amendment concerns.

The state of Maine is appealing a District Court judge's decision earlier this month blocking the imposition of a first-of-its-kind state law that would have required Comcast and any other cable operator that wanted to operate there to provide video channels a la carte. 

The judge granted a temporary injunction, saying Comcast et al. had made a good case that the law violates the First Amendment’s prohibition on speaker-based regulations, since the law did not apply to satellite or other MVPDs, but also suggested that cable pricing could be a reason for treating cable differently when it comes to unbundling. 

Marc Maron, a spokesperson for Maine Attorney General Aaron Frey, confirmed that the state had filed a notice of appeal, which will go to the U.S. Court of Appeals for the First Circuit. 

“While we certainly respect the lower court’s thoughtful decision," said Attorney General Frey, "this issue merits appellate review. We continue to contend that the First Amendment does not give cable companies the right, as a business decision, to force customers to buy dozens of channels they don’t want just to get the two or three they actually watch. The First Amendment is about protecting freedom of expression, not protecting business strategies that harm consumers.”

A federal judge in Maine has stopped, for now, the imposition of a first-of-its-kind state law that would have required Comcast and any other cable operator that wanted to operate there to provide video channels a la carte.

But the decision, which came in the form of a temporary injunction, was something of a mixed bag.

Comcast and a laundry list of other content distributors and suppliers filed suit against the law, which, if it catches on in other states, would force them to offer channels and even programs individually on a nationwide basis.

Here is a look at the pros and cons of the decision from the cable industry’s perspective:

Pro: The decision means the judge thinks cable ops and programmers have a good chance of winning at trial.

Con: There will still be a trial on the merits of the law.

Pro: The nation’s largest cable operator won’t have to start the new year by unbundling its service and programming on a per-channel and even per-program basis.

Con: The judge dismissed cable’s argument that the law was pre-empted by the federal Cable Act, leaving open the question of whether the state could craft an a la carte law that did not run afoul of the First Amendment.

Pro: The judge granted the injunction because she said Comcast et al. had made a good case that the law violates the First Amendment’s prohibition on speaker-based regulations, since the law did not apply to satellite or other MVPDs.

Con: The judge said cable operators and programmers had not made the case, again at the preliminary stage, that the law violated an MSO’s right to make its own editorial decisions, an argument they have long made against the mustcarry/retrans regime.

Big Con: The judge suggested that cable pricing could be a reason for treating cable differently when it comes to unbundling: “The evidentiary record is weak at this point, but the record does contain evidence that cable pricing has greatly exceeded the pace of inflation over many years. This may provide a separate special characteristic that would support differential treatment of cable operators.”

Amazon executives have began telling entertainment companies that they’re going to be more selective moving forward in regard to what video services to include in the popular Amazon Channels a la carte service, according to The Information.

Amazon Channels is a component within the larger Amazon Prime Video ecosystem. It lets Prime users subscribe to more than 200 over-the-top video services—everything from HBO to Acorn TV—with billing to multiple platforms centralized and handled through Amazon.

Beyond indicating that the e-commerce giant may be more selective, The information report doesn’t seem to signal that Amazon is backing off its popular Channels marketplace. BMO Capital Markets estimates Channels generated $1.7 billion in revenue for Amazon last year, more than double what it generated in 2017.

Simultaneously, The Information reported that Apple is ramping up a similar OTT bundling model with an eye for an April launch. Meanwhile, Roku has begun to deploy a new feature within its AVOD platform, the Roku Channel, that lets users buy premium video services like Starz through Roku.

“We believe [Prime Video Channels] is a material driver of standalone [over-the-top] subscribers for many entertainment companies,” representing anywhere from 25%-45% of total OTT users depending on the channel, BMO analysts Daniel Salmon and William Lowden wrote in their December report.

Sling TV said Thursday that it is allowing ex-customers to buy certain channels on an a la carte basis without a base subscription, in concert with a new pricing structure aimed at giving customers more flexibility.

While its 30-channel Sling Orange package, which includes Disney Channel and ESPN, will rise 25% ($5) to $25 per month, the OTT service will allow ex-customers to buy certain channels on an individual basis without a monthly subscription through their Roku devices. Sling said it expects to expand the offering to additional Sling-supported devices in the future. While it is far from full a la carte – only a handful of channels are available on a standalone basis – it is a start.

According to Sling TV, former customers who reopen their Sling TV app can purchase premium channel Showtime for $10 per month, newly launched Stingray Karaoke ($7), Dove Channel ($5), Outside TV Features ($5), Curiosity Stream ($6), Pantaya ($6), Up Faith & Family ($5) and NBA League Pass ($28.99).

About 100 hours of free on-demand content from TBS, HGTV, History and other networks are also available. Available shows include Wrecked, The Detour, Good Behavior and Flip or Flop.

Users also can access individual pay-per-view events and movies without a monthly subscription to the service. The company said it plans to add new features and more content in the near future.

In a blog post Thursday, Sling TV announced it would raise the price of its Sling Orange 30-channel package by $5 to $25 per month. Pricing for the combined Sling Orange and Sling Blue packages remains unchanged at $40 per month.

"When we first launched Sling in 2015, we set out to create an entertainment experience that put our customers first, offering unprecedented flexibility and control – no annual contracts, no hidden fees and the ability to customize programming," Sling TV president Warren Schlichting said in a statement. "The new Sling evolves the experience even further by providing access to great content without anchoring customers to a base subscription."

The Pay TV model remains far from an a la carte model despite the introduction of slimmer bundles, but a fresh study from TiVo offers a sense on which channels would be the most popular and how much consumers would be willing to pay for them in a bundle-free world.

ABC, at 70.7%, would be the most-desired channel and consumers would be willing, on average, to pay $1.52 per month for it, according to TiVo’s Q3 2016 Video Trends Report, based on a survey of 3,100 adult consumers.

CBS was next (70.1%/$1.55), followed by NBC (65.5%/$1.54), Discovery (62.1%/$1.53), and History (59.7%)/$1.54).

About 78% said they’d be interested in an a la carte packaging option.

For packaging, consumers said they’d be willing to pay $15.30 per month for the top 10 channels, and $32.92 per month for their 20 favorites.

The study also looked at broader pay TV trends, and found that 17.9% had cut cable or satellite TV service in the past year, with the three top factors being price (82.9%), reliance on OTT services (59.5%), and use of an OTA antenna to get broadcast TV channels (28.1%).

Of those who still get a cable or satellite TV service, 9.1% said they switched providers in the past three months, up slightly versus the prior quarter and year TiVo conducted the survey.

Of those that intended to change providers in the next six months, 5.6% said they plan to cut service altogether, versus 7.1% who will switch to another provider, and 2.5% who will go to an online service or app. Almost 30% are on the fence as a “maybe.”

“While this is a large portion of the respondents, the positive news for pay-TV providers is that this group of “at risk” respondents decreased 4.8% q/q,” TiVo said.

The data also shined the light on what would make consumers reconsider, with 65% saying they’d stay if a more flexible package structure was offered, and 43.5% saying they’d want an integrated solution that ties in access to OTT services such as Netflix, Hulu or Amazon Video.

With respect to OTT, 61.9% said they use a monthly SVOD service, down 2% versus TiVo’s Q2 survey results. Similar to Q2 numbers, 10% of respondents said they share an SVOD account without paying.

Traditional MVPDs are using authenticated TV Everywhere services to fight cord-cutting while also delivering multiscreen options. The Q3 survey found that 47.1% were aware that their provider offers TVE apps, up 4% year-over-year, and up 12.5 over a three-year span.

About 28.1% said they use their pay TV provider’s TVE app, up 4.4% year-on-year.

In terms of usage, the top programmer apps were CNN (5.6%), ABC, HBO Go and WatchESPN (4.8% each), CBS (3.8%), NBC (3.4%), Fox (3%), HBO Now (2.8%) and Fox News (2.7%). 

TVtibi, a global OTT provider that delivers services on an a la carte basis, has added NatureVision TV under several pricing options.

Per TVtibi’s site, subs can buy access to NatureVision TV in HD for one day for 99 cents, seven days for $1.99, a month for $2.99, or a year for $29.95.

TVtibi is currently available on Windows 10, 8.1 and Windows RT, and expects to launch an app for iOS devices in June, and follow with a version for Android devices.

TVtibi launched its a la carte  service in June. Other services currently on offer via its platform include My Jam TV, Britfox TV, Palm Beach Atlantic University Sports Channel, Newsy, Indiana University of Pennsylvania  Sports Channel, The Children’s Reading Channel, and Pursuit Channel, among others.

“This partnership sends a message to NatureVision TV subscribers that they can watch our programming no matter where they are or what device they may be viewing on. That’s precisely how people want to watch our programming globally,” Jon Gorchow, CEO and cofounder of NatureVision TV said, in a statement.

“NatureVision TV brings a collection of exceptionally soothing nature programs”, added Andrew Goldman, TVtibi’s chief strategy officer, a former HBO exec who joined the company in August 2015. “NatureVision TV is an excellent addition to our growing lineup of channels”.

Offering a deeper look into the increasingly volatile world of pay TV, a new survey from Digitalsmiths found that 46.6% of respondents are at risk of cutting the cord or leaving their current pay TV provider for another. 

Digitalsmiths, the video search and discovery firm acquired last year by TiVo, revealed those findings in its Q2 2015 Video Trends Report, based on a survey of 3,210 adults in the U.S. and Canada.

The survey found that 7.7% of respondents switched pay TV providers in the last three months, a 1.7% year-over-year increase. Over the next six months, 14.9% are at risk to cut service (4.5%), change providers (8.1%), or switch to an online app or rental service (2.3%).

While the cost of service factors into this trend (61.6% said they pay more than $100 month to their provider), the group that is “unsatisfied” with their service rose to 6.1% in the Q2 survey, while 76.6% claimed to be “very satisfied” or “satisfied.”  Those in the unsatisfied camp cited reasons such as increased fees and poor customer service.

A La Carte and OTT

Digitalsmiths also shed some light on the demand for a la carte, skinny bundles and the rising popularity of OTT services.

On the OTT front, the surveyed group was most familiar with Hulu (44.7%), compared to HBO Now (31.2%); Showtime’s new standalone OTT offering (17.1%); CBS All Access (10.8%); Sling TV (9.7%); and PlayStation Vue  (9%). Consumer awareness for that full group rose 1.8% in Q2 versus Q1 2015. About 42.5% were not familiar with those offerings.

Digitalsmiths also found that 79.2% said they would like to pick only the channels they watch (down 2.2% in Q2 versus Q1 2015), and see a selection of 17 to 18 channels as the ideal lineup.

The average price they’d pay for that channel mix was $39.50 per month. Almost 20% said they’d be willing to pay $10 to $20 per month, 17.3% said they’d pay $21 to $30 per  month, and only 3.1% said they’d pay $81 or more per month.

“These numbers illustrate clear demand by respondents for the à la carte Pay-TV model,” Digitalsmiths noted in the study, which also found that 35.1% were overwhelmed by the number of channels available to them. “While the cost of programming continues to increase, consumers could become less tolerant of paying for unvalued programming.”

For those who want a la carte, ABC was the top channel selected, followed by Discovery Channel, NBC, History, CBS, A&E, Nat Geo Channel, Fox, HBO, PBS, Comedy Central, The Weather Channel, AMC, Food Network, Animal Planet, TLC, TBS, TNT, CNN and HGTV. The bottom five of the group were Velocity, Telemundo, Univision, Fusion and Ovation TV.

‘Cord-Cheating’ and OTA

The study took a fresh look at “cord-cheating,” where subs seek VOD fare and linear TV from parties other than their pay TV provider. In Q2, 57.7% subscribed to a service such as Netflix,Hulu, Amazon, Sling TV, and HBO Now, a figure that grew 7% year-over-year, and 22.8% over a two-year span.

Of the 15.7% surveyed who do not take a traditional pay TV service, 33.3% use an antenna to get basic TV channels.

TV Everywhere

A positive trend for pay TV is increased awareness of authenticated TV Everywhere services. In the Q2 survey, 43.3% said they were aware that their pay TV provider offered TVE, up 4.8% year-on-year, and up 11.2% over two years.

Almost one-fourth of respondents said they have their provider’s TVE app, up 2.3% year-on-year.

Of those who do tap into TVE, 45.4% use it on a weekly basis, up 3% year over year. However, 54.6% said they access those TVE offerings “rarely” or “never.”

The study also highlighted the popularity of apps from programmers and broadcasters. In Q2, 27.8% said they have installed one on their tablet and/or smartphone.

In terms of installations, the top apps in this category were: HBO Go (5.9%), Hulu (5.7%); ABC  (5.2%); WatchESPN (4.9%); A&E (4.5%); CBS (4.4%); and NBC (3.2%).

Digitalsmiths’ study also centered some results on the vendor’s bread and butter – search and discovery. About 22.2% said that their provider makes TV and movie recommendations to them, up 6% over two years, and 92.5% felt that the recommendations made were “always” or “sometimes” accurate, up 2.4% versus Q1 2015.

Digitalsmiths clients include AT&T/DirecTV, Bright House Networks, Charter Communications, Dish Network, Foxtel, FOX Sports, Sharp Electronics, Time Warner Cable and Verizon, among others. 

TVtibi, a global OTT provider focused on the a la carte model, said an agreement with Backlight TV/Innova TV Networks will enable it to offer a free, live stream of the coming Saturday (September 12) college football game between the Indiana University of Pennsylvania Crimson Hawks and the Kutztown University Bears.

The game will be offered free on a global basis on  TVtibi, as well as Flipps TV, IPoint TV, and ChannelMaster TV and other OTT platforms. TVtibi has secured the ad-insertion rights for it, according to TVtibi president and CEO Matthew Beck.

TVtibi (its parent company is called Ready, Set, Sync!) recently launched an OTT a la carte service in beta mode that features a curated mix of content, including a movie service called Classic Cool. TVtibi launched initially on Windows 8.1, Windows RT and Windows 10, and plans to launch apps for iOS and Android later this year. TVtibi execs discussed their strategy and plans last month in this Next TV story (subscription required) that appeared in the August 10 issue of Multichannel News and Broadcasting & Cable.

Last month, Andrew Goldman, a pay TV industry vet late of HBO, was named chief strategy officer of TVtibi.

"We are thrilled to be working with Innova TV Networks to bring live sports, traditionally only available via broadcast television, to the world through TVtibi,” Beck said,  in a statement. This is a game-changer, and we look forward to live sports being a regular part of our platform.”

Innova TV Networks principle Jack Pennington added that the OTT telecast comes ahead of its launch of two new all sports networks, Rivals Sports Network (D1 through D3 college sports), and Rivals World Wide.

Rival Sports Network has not released its full lineup of leagues and supported sports, but noted that when it isn’t offering college games, the service will feature coaches shows and games from minor leagues such as the Premiere Basketball League.

Backlight TV’s web site lists several supported distribution platforms, including Web browsers, Roku boxes, the Apple TV, Google Chromecast, iOS and Android mobile apps, and a manufacturer’s portal (through NetRange) in Europe and Asia. Other “channels” offered via Backlight TV include Pilot TV (pilots, with ad inserts, from shows such as Family Guy, Flipper, The Beverly Hillbillies, and WKRP in Cincinnati); New York Fight Exchange, Wheels TV, and Silver Screams (campy horror flicks such as Night of the Living Dead, Mutiny in Outer Space, and King of the  Zombies).

PlayStation Vue, Sony's OTT pay TV service for the PlayStation 3 and PS4 consoles, has launched service in Dallas-Fort Worth and Miami-Fort Lauderdale areas, Eric Lempel, VP of Sony Network Entertainment announced Thursday via this blog post.

He said all PS4 and PS3 owners there can now subscribe to PS Vue’s three multichannel packages – Access ($49.99 per month), Core ($59.99/month) and Elite ($69.99/month)

PS Vue has also launched multichannel service in Chicago, Philadelphia, Los Angeles, New York City and San Francisco. Those packages also feature a cloud DVR.

PlayStation users also have access to the new OTT standalone version of Showtime ($10.99 per month or $8.99 for PlayStation Plus members ), and PS Vue plans to launch Fox Soccer Plus on an a la carte basis ($14.99 per month or $12.99 for PS Plus members) later this summer, but ahead of the upcoming season of the UEFA Champions League, Lempel noted.

Sony talked up its a la carte plans at the E3 show in June, also announcing that it will also offer a premium TV channel from Machinima as a standalone ($3.99 per month, or $1.99 per month for PS Plus members) or bundled with the PS Vue Elite package.

Sony has not announced subscriber totals for PS Vue, though Dwayne Benefield, VP and head of PS Vue, said in June at the NewBay Media Next TV Summit in Santa Monica that the rollout had “far exceeded expectations.”

As children, the concept of “free choice” is introduced to us quite early, in the form of the classic folk fairy tale “Goldilocks and the Three Bears.” Yet, the simplicity of those “big,” “medium” and “small” choices belies the complexity behind the video viewing pastime enjoyed by most Americans 5-6 hours a day, 365 days a year.

Tackling that complexity, The Wall Street Journal’s Joe Flint wrote a remarkable study, dated June 8, that captured the essence of that paradox known as the “American Pay TV Bundle.” His article presented a rare description by big media of the dilemmas facing today’s video distributors, content rights holders, viewers and a lot of others inside the U.S. video ecosystem. The possible solutions to that bundle dilemma are no doubt fodder for a future WSJ story.

To assist that effort, I wish to address a similar concern: Is a la carte a fairy-tale answer to America’s pay TV bundle?

I would posit this answer: Yes, it is.

But, meanwhile, we are certainly headed toward many more ”medium-sized” bundles, of every imaginable form and iteration.

The Push to A La Carte

Four main reasons support today’s idea that the pay TV marketplace is headed quickly toward a pure a la carte motif where everyone chooses and pays for only what they want (on a single-show or single-channel basis, or both).

The first reason is based on a cultural phenomena that is quintessentially American, called “free choice.” Our very society and economics are so often grounded in the theory, indeed, the hope, at least, of having the right to free choice when it comes to goods and services. Indeed, if a consumer can go into a grocery store and purchase single items on a list of 12, without the purchase of one item restricting the purchase of another, then why not also in today’s cable, satellite and telco pay TV services? Why, in order to get my pure choice of 17 channels should I have to buy a package with 133 other channels of no interest to me? That’s weird, right?

The second reason supporting a la carte is the unraveling of the traditional Multichannel Video Program Distributor (MVPD) model. Year-over-year increases in Tier 1 content costs are clobbering operator margins and driving subscribers away.

Third is the steady and dramatic increase in the quality and quantity of video distributed over the Internet. This phenomenon gives pay TV subscribers an additional reason to defect to the so-called Over-The-Top (OTT)/broadband/streaming distribution infrastructure.

The final reason supporting a la carte, specifically (and arguably a smaller part of the third reason above), is the resultant decrease in the viewing of live, linear, “appointment television.” This loss is replaced by a dramatic increase in the viewing of on-demand content and the accompanying changes in behavioral viewing patterns. Indeed, “binge viewing” is but one example of the new dynamics that support the idea of singular-choice TV.

The Myth of A La Carte

Yet, in that endless momentum toward a business and marketplace equilibrium, there are even more reasons on the side of an equally important question, i.e., Why are a la carte channels and programs also challenged? These, I also posit, are today stronger than those above that support the notion of pure a la carte.

These half dozen reasons are positioned below as “realities,” because these are examples of the real world shining light on a rather idealistic and visionary world that is today’s a la carte. Indeed, this is where Goldilocks’s lofty dreams and visions of simple choice and pure viewing freedom – indeed, her feet, and those of almost every other American video viewer -- are forced to meet the ground.

Personal Realities

Studies show that most U.S. TV viewers regularly covet and watch no more than 15-20 channels from among a typical U.S. mid-level pay TV package of 150-200 channels. The pure a la carte logic is that each viewer should be able to simply select those 17 or so channels, and like selecting 17 separate items in a grocery store, those (and only those separately) are what you pay for.

Unfortunately, for the pure a la carte pay TV notion, the video grocery store is much more complicated than a real grocery store.

In order to provide the most choice for the most people at the best overall prices, U.S. TV has created a forced system of subsidization, which clearly benefits content rights holders and distributors. Yet, it also appears to actually benefit the customer.

That is because by compelling everyone to subsidize other viewers’ channel choices, the selection remains quite large, and the subscription fee wealth is spread to many programs and channels, which otherwise would not be funded and thus not survive.

In this manner, you get your 17 channels pretty consistently. Meanwhile, I (and just about every other viewer) get mine (and they get theirs). In American pay TV today, that’s around 95 million sets of 17 channels.

Furthermore, most people do not want to add yet another set of video viewing decisions to their list of concerns; call that laziness or “other priorities,” if you will. That lack of passion to actually seek out my favorite 17, as a personal matter, also gets in the way of instant a la carte. For many, to get the channels I want – regardless of that other “channels I don’t want” nonsense – is what counts, and thus most just get used to (and accept) paying that overage.

This, then, is major reality # 1 of today’s big bundle vs. a la carte war.

Legal Realities

The “legal realities” backing bundles is a big – and important -- one.

That is because just as we are a country of strong choice, we are also a country of strong laws (which often trump strong choice).

The length of the licensing term for most major program agreements today is typically five years. That is because programmers and their distributors want to make longer-term business decisions, as a form of good business practices.

Another legal reality involves programmers adding terms that require several of their programs and channels to be purchased and shown as a group. This also is seen as a good business practice.

A third legal reality is the restriction from Internet and other IP-based distribution involving the top tier, most popular, programming. Arguably, the basis for this in the past was insecurity as to the copyright protection and thus payments receivable via IP, much of which is now past tense. That said, it still exists.

In the end, outmoded attitudes die hard, and antiquated contract restrictions die harder. This is particularly the case for licensing agreements that typically run those five-plus-year terms. 

Yet, conversely, as the OTT/broadband/streaming market grows, the “old school” licensing deals will fall by the wayside. This includes changes in the top tier, linear, channels, as well.

Market Realities

Producing those top-quality television programs (or movies, or sporting events, or what have you) takes a lot of money.

Bloomberg View’s public policy, economics, finance, and business blogger, Megan McArdle, put this quite succinctly in her recent article “The Fault in John Green’s Cable Logic.” She pointedly observes: “You don't want your cable to be unbundled. You just want to pay less for it.”

So what happens when you unbundle? How much do you have to pay for your channels?

That's right: typically the same $150 as with pay TV. You aren't cross-subsidizing the channels you don't watch, but all those other people aren't cross-subsidizing all the channels they don't watch. So, you have to make up for that lost revenue if you are going to continue to pay for your favorite programs. Obviously, with fewer viewers to justify higher ad rates and subscription fees, that lost revenue has to be replaced in order to retain the shows and business models. That means higher subscription fees. The price for each channel goes up in the a la carte model, until you're paying about what you were before in your traditional bundle model.

According a not-so-recent-but-still-viable econometric study done by Harvard’s Dimitri Byazolov and printed by UC Berkeley’s Haas School of Business, households would save, on average, some thirty-five cents from their current monthly bills in that a la carte world.

Noteworthy is the fact that the 2008 Byazolov study cites a parallel 2008 theoretical study by Crawford and Yurukoglu that concludes unbundling substantially benefits consumers, however, the data, models, and assumptions are different enough to call it a wash. The point here seems to be that unless the “A La Carte Study” conclusion is clearly and consistently that consumers do better with a la carte, the industry is going to very likely continue supporting the bundled model.

Realizing this “market and business reality,” most consumers can more easily accept the 90% waste, 10% subsidization argument, and look for other ways to address video choice.

Thus, there is at least a valid argument that video cross-subsidization appears to work.

Economic Realities

Possibly the best way to define why the existing pay TV bundles work is to compare them to bundles offered by other industries.

In the hospitality world, for example, few, if any, hotels charge you by the towel, or bar of soap, or by the sheets for a multi-night stay. And fewer hotels now charge separately for wi-fi. Can you imagine a world where someone brings his/her own towel to avoid being charged separately for using those from the hotel? Sometimes the pure a la carte model doesn’t work.

The same holds true in the airline business, where most folks like me chafed greatly at the idea of paying separately for bags checked, use of the toilet, and even paying for access to food, entertainment, phone, Internet and food service.

Or in the car-buying world: one questions the ability to charge separately for tires, or gas caps, or bumpers, or in-dash systems. The American auto is a great comparison to the American pay TV bundle. Both support strong arguments that the bundle works (and will thus take a long time to significantly alter).

Plus, splitting things up often means much more effort and resources expended overall, because people have to be paid separately to do things and to purchase things separately, that make a la carte happen. This then adds an a la carte cost that then gets passed on to the consumer.

Business Realities

To put this in context, the global pay television market was about $269 billion in 2014 (ABI Research). Considered without context, OTT/broadband/streaming is doing gangbusters when you consider where it was five years ago. But OTT/broadband/steaming today doesn’t amount to 5% of the total pay television market. Thus, some moderation in the over-the-top hyperbole appears to be in order.

Stated another way, video providers today are unlikely to jettison big-to-medium-sized bundles that support traditional pay TV payments in big dollars, in place of OTT/broadband/streaming services that support payments in small pennies.

Viewing Realities

Perhaps one of the best measures of the current friction between traditional pay TV bundles and alternative OTT/broadband/streaming alternatives is Dish Network’s new Sling TV model. Some would say that it is good evidence of the weakness of traditional pay TV bundles.

But, most interestingly, the channels offered by Dish on Sling are not the same channels as those offered on the pay TV channels. Yet, per channel, consumers pay about the same for ESPN on Sling TV as they do on Dish. Nor can the SlingTV consumer buy only the five or ten or 17 channels that are his or her favorites. Is this then closer to the reality of a la carte – or merely an offer that satisfies the economic need to pay less?

Conclusions

The realities of the enormous business that is pay television make it practically impossible for each of us to realize our “a la carte” dream.

Until there is better proof that unbundling-toward-a-la-carte saves consumers real money, unbundling will proceed slowly and cautiously. Until businesses find viable business models that will hold up a la carte, they, too, will resist that change.

Conversely, there will be a few company breakaways, and rare contracts will be written that leave the established norms, during the next few years.

Indeed, we will get a lot closer to a la carte, but it will take many years. Instead, for now, at least, the logical conclusion is that most viewers will likely end up as Goldilocks did: choosing a bundle somewhere in the middle. This means a grouping of channels and shows not too big (like today’s bundles); not too small (like a la carte); but somewhere in the middle (like hundreds of new possible channels and shows, from old and new media, and a plethora of other new video combinations).

Jimmy Schaeffler writes about telecommunications and media. He is chairman and CSO ofconsulting firm The Carmel Group, Carmel-by-the-Sea, Calif.

While it’s no surprise that most consumers are interested in an a la carte pay TV services model, the ideal number of channels in such a package would consist of 17, according to a new survey from Digitalsmiths, the TiVo-owned search and recommendation specialist.

Digitalsmiths’ Q1 2015 Video Trends Report, which based its findings on a survey of more than 3,140 consumers, noted that 81.6% of respondents said they are interested in a la carte services that can be bought outside the traditional pay TV bundle.

That could bode well for Sony PlayStation Vue, which announced an a la carte strategy this week that will initially be limited to three offerings subscribers can purchase outside the bundle – Showtime, Fox Soccer Plus and a coming premium service from Machinima.

The survey also found that, on average, consumers would pay about $38 per month for their ideal a la carte package.

More than half of those surveyed – 55.7% -- said they were aware of OTT services such as CBS All Access, Hulu, PlayStation Vue and Sling TV.  Of those, the majority (51%) were aware of Hulu, followed by Sling TV (11.9%), PlayStation Vue (11.4%), and CBS All Access (10.5%).

The report also found that 7.7% of respondents switched providers in the last three months, a 2% year-on-year increase. Over the next six months, 15.3% said they plan to either switch (3.1%), change (7.4%) or cut service altogether (4.8%). About 32.4% said they are on the fence and might need to be enticed to stay.

Sony used its presser at E3 Monday night to announce that it is launching PlayStation Vue, its over-the-top pay TV service, in two more markets: San Francisco and Los Angeles.

Sony Computer Entertainment CEO Andrew House paired that with word on new national a la carte offerings that won’t require a multichannel bundle, starting with Showtime (announced last week); a channel from Machinima (more than half of Machinima’s U.S. audience owns a PlayStation platform, according to a statement from Machinima CEO Chad Gutstein); and Fox Soccer Plus, a premium service that’s also offered today through MVPDs such as DirecTV, Cox Communications, Time Warner Cable, AT&T U-verse, Verizon FiOS, Frontier Communications and Cablevision Systems, among others.

House also announced that PlayStation Plus subscribers will also get access to discounts on programming packages, but did not elaborate.  

The PS Vue launches in Los Angeles and San Francisco (more detail about the lineup of regional sports channels in those two markets was not immediately known) follow the service’s initial debut in March in New York, Chicago and Philadelphia.

Update: Sony revealed pricing on its initial slate of a la carte options and provided more detail on its TV lineup in San Francisco and Los Angeles. 

Early on, Sony’s OTT-TV service features three tiers -- “Access” for $49.99 per month; “Core,” which includes local sports channels, for $59.99 per month; and “Elite,” an offering that includes everything in Access and Core plus more than two dozen additional channels. To prime the pump, Sony lets new, qualified users try PS Vue for free for seven days.

PlayStation Vue is currently supported on the PlayStation 3 and PlayStation 4 and via a recently launched app for the iPad.

Expect to hear more about PlayStation Vue this Thursday (June 18), when Dwayne Benefield, vice president and head of PlayStation Vue, speaks at the Multichannel News/Broadcasting & CableNext TV Summit & Expo at the Loews Santa Monica Beach Hotel.

With each new announcement of a service going “over the top” of traditional cable systems, investors and consumers, persuaded by the national media, start to believe the breathless confirmation that this time we are witnessing nothing short of a TV revolution — a new way to buy and watch the medium.

When HBO and CBS recently unveiled plans, the august New York Times called the moves “a watershed moment for Web-delivered television, where viewers have more options to pay only for the networks or programs they want to watch.” Not hardly.

The reality is much more mundane, and if the cable industry doesn’t make strategic missteps, the bundle will continue to dominate the pay TV-buying public’s appetite for years. The hopeful fantasy that somehow consumers can one day choose to buy channels on their own at an affordable price is just that — a fantasy. It’s not a real business that will rival cable operators.

Cracks are appearing in the bundle for sure, but the current spate of pronouncements about OTT are simply defensive plays by programmers claiming their space in the streaming future, not a sign of true disruption.

The appearance of cord-cutters (still at only 2% to 3%), is testament to the changes coming in video-content delivery, but how fast and how much depends on how you define OTT. Is over-the-top merely the delivery of video signals over the Internet by services such as Netflix, Hulu and Amazon Prime, or is it essentially a la carte TV fare over the Internet, where viewers who cut the cord to their pay TV providers pay for only the programs they watch?

Companies like Roku and Apple have respectively sold 10 million and 20 million streaming-media devices, which allow some form of OTT video to viewers. And at press time, at least three services — from Sony, Verizon Communications and Dish Network — are scheduled to be released over the next several months. Indeed, the market for streaming media players is expected to grow from 24 million this year to 44 million by 2017, according to research firm IHS.

Although some of those offerings will provide lighter packages of programming for lower prices, it won’t be true “a la carte” — the ability to select only the channels you want. Dish’s OTT offering, expected to be introduced some time next year, would cost about $30 a month for 30 channels, according to reports. That’s not exactly a bargain — and it’s not a la carte, because it’s unlikely consumers will be able to pick and choose between packages.

The debate over a la carte service has followed the cable and satellite industries almost since their inception. But it is unfathomable, with the oligopoly now in place, that one day a cable customer will be able to buy Disney Channel but not ESPN, Comedy Central but not MTV, and USA Network but not Bravo and keep the bill at a reasonable level. Giant cable programmers won’t allow it. And MSOs will simply pass the costs along.

Moreover, cable networks would never — repeat: never — risk the hundreds of millions of dollars in affiliate fees from pay TV distributors to make a few bucks on the side via a new OTT player with a more limited reach. A la carte is not here now, and it’s not coming for at least the foreseeable future.

What made the HBO and CBS announcements different is that they weren’t simply carriage deals with a new OTT provider — Viacom already did that with Sony in September — but were instead the first examples of individual networks selling directly to the consumer.

Beyond the hype of those announcements, the offerings are actually quite limited in terms of how they can be accessed and what they will offer, at least at the outset.

Why will the OTT newcomers, buoyed by consumer antipathy towards cable and satellite operators, fail to be a real business rival to the entrenched cable and satellite and telephone monopolies? Here are five reasons:

OTT offerings will always be weaker. While HBO and CBS have unveiled offerings that at first glance seem to be freeing, they are carefully geared toward maintaining the status quo. In announcing the HBO OTT service at parent Time Warner Inc.’s Investor Day earlier last month, HBO chairman and CEO Richard Plepler said it was “time to remove all the barriers” to HBO. Problem is, shortly after making that statement, Plepler spent a goodly amount of time pointing out all of the barriers — it would at first be marketed to the 10 million broadband-only customers of its cable and telco-TV affiliates; operators would handle all billing, customer service and customer control; and the service would be sold in partnership with distributors.

The CBS offering has its own restrictions — there will be no sports available through the service. And to get any live streaming, customers must live in one of 14 cities with a CBS-owned-and-operated station. So, for $5.99 per month a customer can get access to their local news if they live in a CBS market, can watch next-day airings of 15 primetime shows such as The Big Bang Theory the day after they air, access full past seasons of The Good Wife, Blue Bloods and Survivor and stream 5,000 episodes of such older shows as Cheers and Star Trek already available on other subscription-VOD services such as Netflix, Amazon Prime and Hulu.

For other programmers thinking about going the direct-to-consumer route, there are other barriers, mainly in the existing subscription VOD deals they already have with existing OTT players for their library content.

According to Sanford Bernstein media analyst Todd Juenger’s recent report, The Dawn of the OTT Era: We Think Not, consumer expectations for a network-delivered OTT service are simple — they would receive everything that is shown on the network, live and on-demand. “But most networks aren’t in a position to offer anything close to resembling that,” he wrote.

Existing deals for library content with SVOD providers like Netflix could restrict what a network OTT service could offer, creating gaps in the programming day. Non-exclusive deals for content also could lose their luster in the future.

“We doubt Netflix will have much interest in programming that is also available on an SVOD platform directly from the network,” Juenger wrote.

An OTT a la carte service would cost too much. Were the pay TV industry one day to magically convert to an a la carte business model, the annual revenue would be cut in half, to $70 billion from $140 billion, according to Needham & Co. media analyst Laura Martin. Others have said even that figure is conservative.

The problem with a la carte is that it completely unravels television’s existing business model, currently anchored in the ability to sell networks to a distributor for a fee based on the number of subscribers that distributor has, whether individual subscribers watch the channels or not. For instance, in an a la carte world, ESPN wouldn’t cost a consumer the $6.04-per-month license fee paid by the local cable company — it would cost perhaps $30 per month. What is often left out of the a la carte conversation is that networks aren’t going to move to a model that makes them less money.

So ESPN, which is expected to receive an estimated $6.9 billion in affiliate fees alone this year, based on the 95 million homes in which it is available, will simply kick up that fee to more than $20 per month for the estimated 30% of TV homes that would be likely to subscribe to the channel.

Add in another $10-per-month charge to make up for lost advertising revenue and that’s already close to half an average monthly cable video charge of $75 per month. And that’s just one channel. Add another $10 per month for regional sports networks and so-called pricey networks like TNT, Disney Channel, TBS, Fox News Channel and USA Network, and the price could rise to $50, not including additional charges for lost advertising. The average cable package has about 150 channels and costs about $75 per month.

“If you piece it out, it [the monthly charge] gets into triple digits,” Wunderlich Securities media analyst Matt Harrigan said.

Robust network OTT services would destroy the very bundle programmers have worked so hard to create. Giving consumers the ability to buy channels individually would leave no incentive to keep a pay TV package with a distributor, so that revenue would essentially evaporate.

Some cable operators have challenged the practice of bundling, in which a programmer lumps lesser-watched networks together with more popular channels. The programmers have countered by saying individual networks are available for purchase by distributors, who say they are priced prohibitively — in some cases buying a single network that was bundled with others would cost significantly more than the whole package, according to some MSOs.

While some cable, telco and satellite-TV providers have said they would welcome a la carte, they don’t want it either. As Juenger put it, why would a company with high fixed costs like cable ever want to move to a model where those costs stay relatively constant, but revenue is cut in half? While broadband has been a profit center for years — margins for high-speed Internet service approach 90% in some cases — a full departure from the video business would commoditize the industry. That would leave operators with only one arrow in their quiver to compete with — price — and make them vulnerable to deep-pocketed competitors that could drastically undercut their monthly charges. (Google, anyone?) While some of the larger MSOs could weather that storm, smaller operators would wither.

OTT a la carte would be too complicated. According to Sanford Bernstein’s Juenger, OTT a la carte would create a “horrible mess of consumer interfaces.” If you think consumers are confused by the TV apps available to them now, just think how dumbfounded they would be if they had to sift through apps for every network, or remember which networks were owned by which network group if they were bundled together.

“There would be no unified search,” Juenger wrote. “No recommendation engine. Compare that to Netflix or Comcast X1, with one unified search and recommendation engine across all forms of content delivery. The a la carte, OTT world would be horribly complex and frustrating.”

OTT a la carte might mean higher broadband prices and more regulation. According to MoffettNathanson principal and senior analyst Craig Moffett, OTT a la carte would require a huge amount of bandwidth, which could finally open the door for usage-based pricing for the cable industry, or at least allow operators to raise prices for broadband to make up for lost video revenue.

It could also give cable operators the green light to charge OTT providers and aggregators for transport, something several operators have already done with Netflix amid some controversy. While that would seem to be a benefit for distributors, Moffett warned “there is a risk here that cable will win the battle, but lose the war.” Higher prices and transport fees could force the Federal Communications Commission to implement more onerous regulation.

“The prize is whether or not you can charge for the transport function in an OTT world,” Moffett said in a recent call with clients. “And if you see OTT start to accelerate, even a little bit, what’s likely to emerge from the regulatory process is a limitation on the cable operator’s ability to respond to OTT threats through the pricing of broadband. You can’t just jack up the price to everybody because the price increases would be unsustainably high, which would invite more regulation.”

That could include a move toward dreaded Title II regulation, which would characterize cable companies as common carriers and would severely limit further investment in infrastructure.