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THE MORNING BUZZ: May I see the a la carte menu, please?

14 May, 2002 By: Holly J. Wagner

"Once you try digital satellite, you'll never go to the video store again!"

There's a sales claim from my satellite provider's endless customer service phone hold queue that's no threat until some providers clean up their acts. I have yet to get passable customer service from a cable or satellite company and they're only getting worse.

Meanwhile, I'm starting to see that the real threat of video-on-demand (VOD) is a la carte.

What cable and satellite companies fail to do -- even by account of an insider, Starz Encore EVP and chief marketing officer Mike Hale -- is break their services into desirable modules. They shove shopping channels down subscribers' throats on the way to any premium package. The way these companies offer service is as if the butcher made each customer buy a side of beef every time he or she wants a few ribs or even soupbones.

Hale urged his peers at the recent cable show in New Orleans to break out their programming and stop forcing subscribers to take content they don't want to get programming they do want. He called on them to relegate narrow interest and poorly rated digital basic networks to distant tiers for purchase in bundles, replacing them with a value-priced package of premium movie, sports and local channels, along with a core group of well-known basic cable channels.

"The key questions here,” he said, “are is anyone watching these basic channels and what are they doing for customer satisfaction?”

Cable and satellite companies suffer from the same disease that's gripped the music industry in the last few years: failure to offer their product in the mix-and-match pieces attractive to buyers. In music and filmed entertainment the hits carry the klunkers. So cablers and satellite providers, like music companies, force them into the same package. The goal may be using strong titles to ensure sales of weaker performers, but the result reduces consumer choices and fuels piracy in both industries. The companies just don't get it.

They also share the telecommunications industry's arrogance -- the idea that consumers can only get what we want from them so they can treat us any way they want to. Sell you everything they can, sell your name to other people who want to sell you more stuff you don't want, use your fees to give the service free to a more reluctant consumer -- but heaven forbid they should return a customer service call to an existing customer. Once you're paying the fees, you're no longer a hot prospect, just an account number.

So even as much as I loathe downloading stuff off the Internet, I would jump at the chance to buy the programming I want in the chunks I want, with no long-term entanglements that put me in a loop of eternal disappointment.

It's not hard for video dealers to compete with what cable and satellite providers euphemistically call service. But if VOD providers manage not to make the same mistakes, it could be trouble. Until then, a la carte is a big selling point for home video.

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