CableTV Companies Forced to Unbundle in Canada

Over the weekend, a Canadian government official said the country was going to begin requiring cable providers to unbundle the television service they offer, allowing customers to pick and choose which stations they’re willing to pay to watch, according to Bloomberg Businessweek.

Despite the efforts of one cantankerous Republican senator from Arizona, the chances of U.S. lawmakers soon following suit are relatively small—even if they, you know, start doing anything at all. John McCain’s Television Consumer Freedom Act of 2013 hasn’t moved since it was introduced in May, and GovTrack.us now gives it a 1 percent chance of becoming law.

The television industry is likely to fight such legislation because the stakes are really high. According to a study published this summer by Needham Insights, half the industry’s revenue (PDF)—about $70 billion—would disappear if people didn’t have to pay for bundled television. The firm thinks only 20 stations would survive the fallout.

 “Consumers in most à la carte models end up paying more or less the same as what they were paying before, and all they have to show for it is that now they have fewer channels,” according MoffettNathanson research analyst Craig Moffett.

Allowing people to buy television channels individually would almost certainly drive up the price of the channels that people actually want. ESPN, for example, costs cable providers about $5.15 per customer each month. But if only the people who watched ESPN were willing to pay, the company would have to charge $13 per month to make the same amount of money.

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