Joe Nocera had a provocative column in the NYT on Saturday, headlined "Bland Menu if Cable Goes à la Carte". We shouldn't be allowed to pick and choose the TV channels we want to watch, he says: that would be no less than "a consumer disaster".

Now I'm no expert on the economics of cable TV. But I'm not in the slightest bit convinced by Nocera's argument, and I don't even understand what he means when he says that "when we pay for the cable bundle we are, in effect, subsidizing those channels for everybody — including ourselves."

To his credit, Nocera does a reasonably good job at laying out the case for the prosecution: that it's unreasonable to ask people to pay for cable channels they don't want. (Or, in the case of many on the religious right, actively want not to receive.) And he quotes a number of grandees coming out in defense of a la carte pricing, including Gene Kimmelman, of the Consumers Union, and Kevin Martin, the chairman of the FCC.

Nocera's weaker when it comes to defending the status quo. His main argument is that the cost per channel would go up, sometimes by a very great deal:

Unmoored from the cable bundle, individual networks would have to charge vastly more money per subscriber...
Take, for instance, ESPN, which charges the highest amount of any cable network: $3 per subscriber per month. (I’m borrowing this example from a recent research note by Craig Moffett, the Sanford C. Bernstein cable analyst.) Suppose in an à la carte world, 25 percent of the nation’s cable subscribers take ESPN. If that were the case, the network would have to charge each subscriber not $3, but $12 a month to keep its revenue the same. (And don’t forget: with its $1.1 billion annual bill to the National Football League alone, ESPN is hardly in a position to tolerate declining revenues.)
And that’s one of the most popular channels on cable. What percentage of cable subscribers would take Discovery, or the Food Network, or Oxygen, or Hallmark — or the many, many more obscure networks that you can now find up and down your cable box? Five percent? Ten percent? According to Mr. Moffett’s analysis, if every African- American family in the country subscribed to the Black Entertainment Network, it would still have to raise its fees by 588 percent. He adds, “If just half opted in — still a wildly optimistic scenario — the price would rise by 1,200 percent.”

Now I haven't seen the Moffett research note, but those percentage figures seem silly to me. If BET currently receives, say, 15 cents per subscriber per month, then a 1200% rise would still come to less than $2 a month per subscriber. Which is not very much. Scary four-figure percentage increases are a way of hiding charges which are still low on an absolute level.

And why on earth should cable TV's subscription structure be set up so as to ensure that ESPN's subscription revenue is unchanged? There's no ironclad rule of television saying that ESPN has to receive billions of dollars in subscriptions only to turn around and pay them straight out again to the NFL for television rights. If ESPN's subscription revenues fell, NFL games would still appear on the television – either on ESPN (for less than $1.1 billion, if it could no longer afford that much money) or elsewhere. Either way, the consumer would still be able to see the same game on the same television set connected to the same cable box. Is it possible that the NFL would lose some revenue? Yes. Is anybody going to lose sleep over that? No.

Nocera also says that the present system encourages channel-flipping:

One of the nice things about the current system is that once a station gets on extended basic, it can be discovered by viewers — and that wouldn’t happen in an à la carte world.

It wouldn't? I don't see why not. In the a la carte world, all you'd need to do is mandate that cable providers give free access to any channel willing to waive subscription revenues. If there were a problem with that model, it would be that there would be too many channels wanting to go free, not too few. When Fox News launched, it paid cable providers $10 per subscriber in order to get into as many homes as it could as quickly as possible. At 15 cents per subscriber per month, it would take well over 5 years just to recoup that initial investment. Much better for all concerned that the channel just be free from the get-go. Any individual subscriber, of course, should also be allowed to ban channels he doesn't want in his home – technologically, that can't be too hard.

Indeed, it should be pretty easy, technologically speaking, to implement a fully-fledged pay-as-you-go system, where consumers pay only for those cable channels they actually watch. Cable providers could provide all the channels they like, from the networks through to HBO and other premium channels, omitting only those that the consumer specifically elects to bar. Consumers could then channel-flip to their heart's content, and if they watched more than say half an hour of any given channel in a month, they would be charged the subscription rate for that channel – or the pay-as-you-go rate for the individual programmes they watched, if that turned out to be cheaper. Any consumer who didn't want to risk running up a big cable bill by watching expensive channels could just bar those channels from being provided in the first place.

Would that system cost consumers more than the present system? It would cost me more, that's for sure: I'd actually sign up for television service if I didn't need to pay through the nose for channels I don't want and never watch. And I'd be happy to do so. The big question isn't whether an a la carte system would be cheaper: it's whether an a la carte system would make consumers happier. And the answer to that, I think, is an unqualified yes.