Cable TV “Gatekeeper” Myths Debunked

by on November 30, 2007 · 12 comments

The big news this week in communications policy circles was the hullabaloo at the FCC over cable regulation. FCC Chairman Kevin Martin suffered a major setback in his attempt expand regulation of the video marketplace when he failed to get the votes he needed to impose new mandates on cable TV operators. Specifically, Chairman Martin was seeking to breath new life into an arcane provision of a 1984 law–the so-called “70/70″ rule–that would have given him much greater regulatory authority over the day-to-day dealings of the cable market.

But the war certainly isn’t over. The day after losing that skirmish, Chairman Martin made it clear he would be pursuing other forms of regulation for the cable sector, including an arbitrary 30% ownership cap on the reach of any cable operator. And the Chairman’s crusade for a la carte mandates on cable will no doubt continue since it has been on his regulatory wish list for some time now, and many other groups support his efforts.

These cable TV regulatory proposals have always been fueled by the same two arguments: (1) cable TV operators have a stranglehold on market entry by new video providers and, (2) because of that, media diversity has suffered. For example, the New York Times editorial board opined this week that: “Twenty-five years ago, cable carriers promised to provide consumers with a wealth of new programming options. Today, the carriers and their packages of unwanted channels are obstacles to choice.” This is the same logic that animates Chairman Martin’s crusade against cable and the efforts of his pro-regulatory allies, most of whom are radical Leftist media critics.

But that logic is dead wrong.

Video marektplace choice and integration


Regarding the first argument… if cable is a supposed “gatekeeper” in the video programming marketplace, then they’re not doing a very good job at shutting down independent programmers! Here are the facts, which are taken directly from FCC reports. As the exhibit above illustrates, the overall number of video programming channels available in America has skyrocketed since 1990, from just 70 to a whopping 565 in 2006. In other words, there is no longer any need to talk about a proverbial “500-channel universe;” we are living in it today. Clearly, therefore, cable operators have not restricted the amount of video programming options. We have more options than ever before.

But–the critics claim in response–even if the overall number of channels has been increasing, cable operators have still limited the ability of independent voices to get a slot on cable distribution systems. Hogwash! In fact, as shown above, the numbers tell the exact opposite story. The greatest share of the growth in the multichannel video marketplace has come from independently-owned video networks. Since 1990, the number of cable-owned or affiliated channels has increased slightly, but it it pales in comparison to the growth of independently-owned and operated video networks. In real terms, therefore, the percentage of the overall video marketplace controlled (i.e., owned and operated) by cable has plummeted–from 50% in 1990 to just 14.9% today! Therefore, as far as vertically integrated industries go, it is impossible to conclude that this one could be characterized as being controlled by “gatekeepers.”

OK, the critics say, so perhaps there are more channels, and perhaps most of them are being created by independent programmers. But it’s all just the same crap! This argument just kills me. The argument that today’s multichannel pay TV universe lacks real program diversity simply doesn’t pass the laugh test. Seriously, have the critics spent any time flipping through the lineup of channels on TV? My finger usually gets sore after the first 150 or so channels, but I sometimes like to see how long it takes me to scan all the stuff out there just to see if there is any human interest or hobby that is NOT currently covered by some video network. As the table below illustrates, the diversity of programming available currently on cable, satellite or telco-provided video networks is simply staggering:
____________________________________________________________________________
The Expanding Video Programming Marketplace on Cable and Satellite TV

News : CNN, Fox News, MSNBC, C-Span, C-Span 2, C-Span 3, BBC America

Sports : ESPN, ESPN News, ESPN Classics, Fox Sports, TNT, NBA TV, NFL Network, Golf Channel, Tennis Channel, Speed Channel, Outdoor Life Network, Fuel

Weather : The Weather Channel, Weatherscan

Home Renovation: Home & Garden Television, The Learning Channel, DIY

Educational: The History Channel, The Biography Channel (A&E), The Learning Channel, Discovery Channel, National Geographic Channel, Animal Planet

Travel : The Travel Channel, National Geographic Channel

Financial: CNNfn, CNBC, Bloomberg Television

Shopping: The Shopping Channel, Home Shopping Network, QVC

Female-oriented
: WE, Oxygen, Lifetime Television, Lifetime Real Women, Showtime Women

Family / Children-oriented
: Animal Planet, Anime Network, ABC Family, Black Family Channel, Boomerang, Cartoon Network, Discovery Kids, Disney Channel, Familyland Television Network, FUNimation, Hallmark Channel, Hallmark Movie Channel, HBO Family, KTV – Kids and Teens Television, Nickelodeon, Nick 2, Nick Toons, Noggin (2-5 years), The N Channel (9-14 years), PBS Kids Sprout, Showtime Family Zone, Starz! Kids & Family, Toon Disney, Varsity TV, WAM (movies for 8-16-year-olds)

African-American: BET, Black Starz! Black Family Channel

Foreign / Foreign Language : Telemundo (Spanish), Univision (Spanish), Deutsche Welle (German), BBC America (British), AIT: African Independent Television, TV Asia, ZEE-TV Asia (South Asia) ART: Arab Radio and Television, CCTV-4: China Central Television, The Filipino Channel (Philippines), Saigon Broadcasting Network (Vietnam), Channel One Russian Worldwide Network, The International Channel, HBO Latino, History Channel en Espanol

Religious: Trinity Broadcasting Network, The Church Channel (TBN), World Harvest Television, Eternal Word Television Network (EWTN), National Jewish Television, Worship Network

Music: MTV, MTV 2, MTV Jams, MTV Hits, VH1, VH1 Classic, VH1 Megahits, VH1 Soul, VH1 Country, Fuse, Country Music Television, Great American Country, Gospel Music Television Network

Movies: HBO, Showtime, Cinemax, Starz, Encore, The Movie Channel, Turner Classic Movies, AMC, IFC, Flix, Sundance, Bravo (Action, Westerns, Mystery, Love Stories, etc.)

Other or General Interest Programming: TBS, USA Network, TNT, FX, SciFi Channel, Spike TV

Source: Federal Communications Commission, various Annual Video Competition Reports
___________________________________________________________________________

In sum, the evidence makes it clear that plenty of independent voices and video programmers have access to existing cable platforms. And diversity is flourishing. As the FCC concluded in its 2003 Media Ownership Proceeding: “We are moving to a system served by literally hundreds of networks serving all conceivable interests.” And any cable operator foolish enough to refuse desirable new programming options will likely lose more customers to satellite or telco providers that will be happy to offer those channels.

Thus, Chairman Martin and other regulatory proponents will need to find a new theory on which to base their proposals because there just isn’t anything to the old “gatekeeper” rationale for regulatory activism by the FCC.

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    The greatest share of the growth in the multichannel video marketplace has come from independently-owned video networks

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    I'd rather have him play basketball than choking on a pretzel while watching NBA

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  • http://www.backgroundcheckspot.com/ Jamil Wright

    so what is the solution with this issue??

  • http://pdfoxy.com PDFoxy

    Cartoon Network, Anime Network, Discovery Channel are my fav. cable tv program

  • http://www.reverse-phone-directory.net/ Gina Keen

    Adding more channels doesn't equate to improved content. We need programs with more substance and less reality shows.

  • http://www.reverse-phone-directory.net/ Gina Keen

    Adding more channels doesn't equate to improved content. We need programs with more substance and less reality shows.

  • http://www.reverse-phone-directory.net/ Gina Keen

    Adding more channels doesn't equate to improved content. We need programs with more substance and less reality shows.

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