Restricting Consumer Choice

The following is a message from my cable provider:

Unfortunately the channels you have outlined are mostly bundled together in the Basic Cable and Cable Plus Combo packages and we are unable to remove specific channels from those packages and modify the price. We apologize for any inconvenience this may cause.

Suppose you visit a supermarket to buy some cornflakes and are told that you can only have the cornflakes if you also take a can of beans and a pack of frozen peas. Store policy dictates that cornflakes are only sold in a bundle with beans and peas. Or suppose you want to buy some screws in the hardware store and you can only buy them if you take a can of paint and a hammer. The absurdity of these purchase conditions is exactly what you do when you buy cable TV services. You cannot pick and pay, that is buy the individual channels you want. You are offered a bundle of channels among which may be one or two you want but others you never watch.

The reason for this policy in Canada is that viewers watch US and other foreign services such as the BBC and there is concern by some that Canadian channels
which may be more likely to carry Canadian content will not attract viewers. The fact that viewers may only watch the foreign channels in the bundles with domestic channels means that you can force channels to be carried by cable services but not force viewers to watch them. Note the declining audience shares of CBC television audiences: the CBC is supposed to be the flagship for Canadian content.

Cultural nationalists in Canada have supported this policy along with subsidies for the production of Canadian content and lobby for its continuation. Agriculture and culture remain among the last bastions of protectionist trade policies. However, the end is in sight. It will be technology rather than economic arguments that will destroy this fortress and introduce competition to the benefit of consumers.

The combination of DVDs delivered by mail or online and internet TV services will put the consumer in the driver’s seat to decide what they want to watch and when. The PVR has already done this by allowing viewers to time shift and watch recorded programs while fast-forwarding through the commercials. Computers with access to the internet can be linked to a TV screen so as to watch material from the internet, and TV sets will have built in internet access to facilitate this type of viewing.

Luckily for viewers technology will give them the benefits of competition that politicians and certain interest groups refuse to allow. Imagine the day when you are able to choose to watch exactly what you want similar to the way you do when you go to the movies, select a book from the library or bookstore, buy your preferred newspaper and magazine and select your favourite CD. Shortly, you will be able to decide when you watch video content and the menu of choices will be much greater. There will be issues of copyright to sort out but this always happens when new technology occurs as it has for print publishing and music.

Technology also offers a good news story for the creators of content. The internet provides new content producers with the opportunity to air their material without depending on the traditional channels of distribution and many are doing so. Established producers benefit from traditional channels. A vibrant cultural community is one that encourages entrepreneurs and new entrants.

Although cultural nationalism may have been motivated for understandable reasons, the resulting policies harm the interests they seek to promote. We can now look forward to the time in video when you want beans you no longer have to buy turnips as well. It has been an absurd situation but the end is nigh.


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