Copyright 2007 Reed Elsevier Inc.
All Rights Reserved
Daily Variety
January 19, 2007 Friday
By William Triplett
From Lexis Nexis

WASHINGTON - Cable television advertisers could target their ad dollars more precisely and efficiently if cable system operators offered a la carte or tiered subscriptions, according to FCC Chairman Kevin J. Martin.

Speaking to an Assn. of National Advertisers conference Thursday, Martin said under the current model, advertisers know that a subscriber gets as many as 200 channels but have no idea which are actually viewed.

"The sad truth, as both you and your commercial clients know, is that no one actually knows how many people are watching each channel, much less how many are watching each commercial," Martin said.

The only accurate Nielsen measures, he said, are for channels associated or affiliated with major networks.

"One can easily sell ads during primetime, and advertisers have some sense of the audience being reached. At other times of the day, however, there are fewer viewers and less precise measures of shares of viewership even for network affiliates," Martin said.

"Providing cable channels on a more a la carte basis would decrease the uncertainty for advertisers and their clients about the viewership of smaller cable networks not covered or not accurately covered by Nielson," he continued. The National Cable & Telecommunications Association has likened its subscription model to that of newspapers in that it's economically not feasible to sell just, say, the sports or business section to a subscriber. For the model to work, a subscriber must buy the whole paper.

Martin tried to counter that analogy with one of his own.

"Suppose the publishing industry were arranged such that consumers who paid $100 per month would each receive a copy of 200 different magazines. In this scenario consumers could not purchase magazines individually or on the street. You either pay $100 per month for all magazines, or you get no magazines. How would advertisers know which magazines to advertise in?," Martin asked rhetorically.

"Numerous economic analyses, including the FCC's own economists, have concluded that a la carte would harm consumers by driving up prices and eliminating channels that serve minority and niche audiences," responded NCTA spokesman Brian Dietz. "The FCC has also reported that consumers enjoy more choice, more programming and more services than at any time in history. We agree with these findings that the marketplace is working."