Bundle This!

My good friend Dave called me a couple of days ago. After a moment of small talk he told me why he called.

Dave is an announcer at a local NPR affiliate. As you can imagine it's almost genetically against his nature to raise his voice above beautiful, precise and carefully modulated tones.

Dave was mad as hell (in an NPR kind of way) and wanted to know if he had to take it anymore.

The problem Dave outlined was with with our local cable provider.

Seems our local provider had decided to move a few of his favorite channels from basic cable to more expensive service packages. Bundling is a common term for these packages.

After assuring Dave that the best thing to do was cancel his monthly service agreement, I tried to soothe his savage (yet mellow) attitude with the idea that such pricing schemes were doomed in the face of broadband service and selectable on-line content. Happy was I to have such an excellent answer and poor Dave was resigned to pay more or lose his cable.

Did I give him the best answer?

While bundling free online content (like this blog) through free utilities is an easy way to aggregate your own "do it yourself" media menu, pay for play content is a stickier problem. The FCC did a consumer study a few years ago on this very issue. The conclusion? That un-bundling cable service and allowing customers to choose channels would actually add costs and raise the monthly rate to consumers. The report was supported by the cable industry and opposed by Consumers Union.

I'd be happy to dismiss the cable industry from the table and support the Consumers Union but for one fact: itunes.

For just .99 cents you get a song you want from itunes (with use restrictions). The problem? I don't know anybody who likes just one song. If you like hundreds of songs, that's hundreds of dollars in music that you pay for, but don't actually own.

If you have to pay a dollar each for three TV shows you like each day, that's about 90 dollars a month, plus the cost of your broadband service. And who wants to pay hundreds or even thousands of dollars a month for content, just to avoid paying for cable TV?

Especially when there is a better way.

In 1925, BBDO advertising aired it's first hour long radio program sponsored by Atwater Kent radios. This was possible because BBDO had obtained exclusive rights to broadcast Metropolitan Opera stars. A couple of years later and BBDO is the first advertising agency to have it's own radio department.

You know how the rest works. You tune in for free content, in exchange for allowing the sponsor to include their commercial message in the content.

It's simple, it's free, it makes content creation possible because the medium itself has value to sponsors who want to reach the mass market. And it makes the sponsor lots of money.

The cable industry and pay for play is based on an obsolete model. Cable was built because people wanted access to broadcasts they couldn't get over the air. The internet has solved that problem permanently by giving everyone who can connect to it access to selectable, unbundled content from millions of channels all of the time for a single low price.

And as far as monetizing content goes, well, look for the return of the Texaco Star Theater.