So far, so good for Shaw's a la carte bundling
Last month, Shaw Communications boldly went where no other major North American MSO has gone before by announcing it was offering a la carte selections to its subscribers.
Shaw is letting its customers add a la carte choices to pre-set bundles, which isn't exactly the full-blown a la carte Holy Grail that former Federal Communications Commission chairman Kevin Martin evangelized several years ago, but it's a start.
Cable operators have long maintained that they can't offer a la carte programming to subscribers because they need the more popular channels to subsidize the less popular offerings.
On the other hand, cable operators are working diligently to provide "any content, anywhere, to any device" because that's what customers want, and that's what competitors are willing to do in order to eat into cable's traditional video revenue pie.
So cable operators are faced with either letting their basic video subscribers continue their churn to other providers or match the video offerings by competitors through online or on-demand content. A la carte pricing is a third option, but since it kills the current cash cow model for cable operators, it's not one that gets talked about a lot right now.
The early results for Shaw's a la carte bundles have been encouraging.
"I can just share anecdotal information," said Dennis Steiger, group vice president of engineering for Shaw Communications. "I guess we shouldn't be surprised, but customers certainly respond very well to having more control over the choices they can make and taking a more a la carte approach to things. When people are looking for value in their purchases from Shaw, giving them as much choice as we can really helps. In many cases, we actually see people spending more than they would otherwise because they have the ability to focus on what they want."
For now, most major MSOs seem content to let Shaw test the uncharted waters of a la carte-type bundles. But eventually they may need to go a similar route in order to truly give their subscribers what they want, or to not charge them for what they don't want.
"People are wondering if there's going to be any significant impact – will customers care?" Steiger said. "We are having a bit of a soft launch with it, so it's not widely publicized right now, but the people who are getting exposed to it do seem to like that approach."
Giving customers what they want never seems to be a bad business decision, but in the end, the decision by cable operators to go to a la carte pricing will be driven by both the economics and the subscribers themselves.