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October 28, 2013
Advertising + Pay-Per-Channel = Awesome
 
Cable and satellite media companies are fighting the inevitable.

In a world where consumers can customize the way they digest and receive information in any format they please, what makes cable, network, and satellite providers really think that their services are protected?

Guess again.

Yes, the only reason why channels are not offered a-la-carte now is because of the strong media lobbies and their influence on Capitol Hill and the FCC. If that wasn't the case, we would have seen this years ago.

There are some significant advantages and disadvantages for creating pay-per-channel services. The biggest disadvantage, in our opinion, is that smaller channels and networks will struggle because they will no longer be bundled with bigger operations; with no economies of scale, carrying full costs could prove to be too much for certain stations that have very small audiences. Another disadvantage is that when channel surfing, consumers will not "discover" anything new. No, consumers will be able to create their own "echo chambers," where all the TV they watch reinforces the opinions and ideas they already have.

Unless the consumer willingly chooses to pick stations that regularly challenge their thinking. But who would do that?

The biggest advantage? It would be an advertiser's playground. The money and support channels with specific audiences, or dynamic shows, would receive would be outstanding. Would AdLand end up spending more? Absolutely. But the return on investment, the kind of recall that would be created, would be a dream. A pay-per-channel system would guarantee eyeballs, and would create an environment where murky eyeball numbers and rate cards would not be able to exist. There wouldn't be "passive" audiences, because the people we would be targeting chose to carry this channel.  

We can hear the consumer and information advocates out there now — advertising would be ruining the freedom of information. 

It is here where the ethics in advertising must be discussed. Does advertising have a role in maintaining the good in our social fabric? We would lean to the affirmative. So then, if AdLand is to benefit society, should we advocate for this kind of system? We believe that there is a strong debate there. For if this system is technically "fair" for consumers, how can it be damaging for society? But if it is fair to consumers, why should AdLand be against it?

Are we even prepared to discuss this? When this happens — because it will — will we even talk about the impact of creating such a fragmented view of our world?

Probably not.

But we will most definitely talk about the advertising. That, my friends, is a guarantee.

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Dwayne W. Waite Jr. is partner and principal at JDW: The Charlotte Agency, a marketing and advertising shop in Charlotte, NC. He enjoys consumer behavior, economics, and football.
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