Nickelodeon Goes À La Carte; What Does that Mean for the Future of TV?

     January 29, 2015


The cable-cutting movement has gained another victory.  Although, cable cutting is not really a movement — there’s no organization or definition.  But it is a major trend that’s been steadily gaining momentum.

netflix-logoHulu, Netflix, and Amazon Prime opened a door for low-cost streaming options, where subscribers can get access to a huge catalogue of TV shows without having to be chained to a cable contract.  If you don’t care about watching things live (which, increasingly — because of DV-R and streaming services — is becoming the case), then why pay for an expensive cable package?  Thanks to Netflix in particular, the rise of binge-watching has become the preferred way for many to watch TV.  And when it comes to new shows, there’s the “I’ll just wait until it’s over, and then watch it all at once” approach.

This gradual change in viewing habits, especially those within the coveted 18-49-year-old key ratings demographic, have (and will continue to have) myriad effects.  One of those that’s already become apparent is a new demand for à la carte content.

THR reports that Viacom CEO Philippe Dauman has announced kids channel Nickelodeon has plans to launch a direct-to-consumer service.  This follows the growing trend that has seen HBO, CBS and others take the “subscribe without cable” approach to their content.  And if successful, perhaps there’s also the possibility that Viacom’s other properties, like VH1 and MTV, could be bundled in with the deal.

This kind of announcement also changes the limitation of not being able to watch things live if you just subscribe to streaming services.  Now, you can start to build your own cable package.

sling-tv-logo-largeAt the 2015 Consumer Electronics Show, CNET reported how Dish unveiled Sling TV, a new streaming service that, for $20 a month, will bring you a collection of popular channels: ESPN, ESPN2, Disney, ABC Family, Food Network, HGTV, Travel Channel, TNT, CNN, TBS, Cartoon Network and Adult Swim.  For an additional $5 a month, subscribers can add expansion packs.

This is huge news.  Being able to get ESPN alone without cable is a coup, and Dish — who has been struggling with a variety of cable networks for years over pay scales for content — is really stepping into the forefront of à la carte with the deal.  Sling TV won’t require a contract, and will also work on existing players like Playstation, Xbox, smartphones and tablets, and Roku players.

This all sounds amazing, right?  But start adding up the cost of various streaming services, and you’re getting to current cable-package levels, with fewer options.

Back in 2010, economist James Surowiecki wrote a piece for The New Yorker about the future of cable bundling.  At the time, he didn’t think consumers would go for it, because initially, costs would soar (which seems — if you are looking for variety — to probably be the case).  Slate‘s Matthew Yglesias echoed this in a 2013 piece “A La Carte Won’t Fix Cable.”

mad-men-jon-hamm-amcOn the other hand, these articles were not able to (at that time) take into the account the success of high-quality (or sometimes, just ok-quality) original programming on subscription services like Netflix and now Amazon as well.  But, if things go completely free from cable, that could be an issue.  For those who enjoy niche cable programming that later turns out to be a classic, like Mad Men or Breaking Bad, just look to the weekly TV ratings.  That’s not what most people are watching, or what most people are going to want to pay for from the start.  Without tent-pole shows that get big advertiser bucks, more experimental and creative series might get shoved to the side.

The good news is, consumers aren’t currently being forced to make a choice.  Cable is certainly not budging for now, and in some markets, there’s actually still some competition that helps keeps prices moderate.  But what the Nickelodeon announcement and those like it means is that we’re also entering a new frontier of TV watching.  Whether that’s a good or bad thing for consumers — and TV creativity — remains to be seen.