FAMILY TIME

Several news reports surfaced last week that some cable TV companies were considering family-tier programming packages as a way of appeasing the concerns that FCC Chairman Kevin Martin has about indecency in cable TV programming. Cable TV providers and programming developers publicly disputed the reports, though it was said that some of them privately were piecing together such strategies. (Curiously, the FCC under a previous chairman had dismissed such tiered packages as an inefficient way of dealing with the indecency issue, so maybe politics are at play.)

The cable TV companies previously have rejected the idea of offering tiered packages, and most of them likely still would balk at anything that would have them abandon a proven revenue model that involves selling massive collections of channels — regardless of genre, age-appropriateness or anything else — to consumers. Also, selling channels à la carte could wreak havoc with the power position that cable TV claims as a distributor of entertainment content. It would end the forced-feeding to which this industry has become accustomed.

But in a strange way, the pressure the cable TV companies are coming under to provide family-tier programming ultimately may better prepare them for life as a telecom service provider in the 21st Century. Under the new rules of the service-provider business, the path to potentially greater revenue and stronger customer relationships lies in the ability to treat defined customer niches as markets all their own.

Mobile carriers are currently most familiar with that concept. Competitive mobile virtual network operators are emerging to target every conceivable demographic niche and special interest. The implication of the value lying within these niches is that all mobile service providers must learn to be more flexible and more directly responsive to the needs of specific groups of customers. (Curiously, most mobile carriers currently offering mobile TV services don't offer tiered or à la carte packages, but maybe they're still learning, too.)

Maybe some people have a problem with tiered packages because they are in the cable TV industry, and they are afraid their rates and margins will slip. Maybe others will have no problem at all with the idea. We will likely find out in the weeks ahead whether or not a large number of cable TV companies will change their age-old models. The most important thing they should consider in deciding what to do is not how it will affect their ability to compete with other cable TV providers, but how it will allow them to compete in an expanded and more complex competitive arena, one in which cable TV firms, telcos, mobile carriers and others are all vying for the almighty entertainment dollar. That dollar will be spent however the individual consumer sees fit.