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October 3, 2014
Let Advertisers Support A La Carte TV Channels
 
With entertainment habits changing rapidly, and the way consumers watch their favorite shows (and only their favorite shows) due to on-demand TV, with streaming and programming continuing to become the norm, traditional TV and its partners need to face the inevitable shift.

The way they do business needs to change.

HBO and Time Warner Cable are already considering it. A couple of weeks ago, it came out that TWC was thinking about unbundling HBO with its other packages and selling it on its own. Why? Because the eyeballs HBO brings because of shows like Game of Thrones are incredibly hard to ignore. Plus, the data probably suggested that these people are getting the show through other means than traditional TV watching.

It's time for the a la carte channel offering to finally be explored.

And that's better for advertising than people think.

Do people still find new things to watch on TV as they channel surf? Yes, they do. But TV viewership is getting just as fragmented as Internet use — people going to and watching things that either reinforce or fail to challenge whatever the consumer is already comfortable with. Providing unbundled channels can not only give consumers the ability to pay for exactly what they want, but it also provides a platform for content providers to give a brand their ideal target market, without any clutter.

A marketer's dream.

Brands should rightfully pay what the market price would be, based on the audience size, purchasing power, and all that good stuff. The advertising support, in turn, creates a lower cost for the consumer.

Everybody wins! Okay, so not everybody.

One of the biggest arguments against this method is that smaller channels and content providers will likely fail because the market they target cannot cover the expenses incurred to provide entertainment. 

There's economics for you. Either 1) grow the market, 2) make the providing cheaper to do, or 3) create enough value that the current market base will cover the expenses

All tough arguments. But if the market can't sustain it, oh well. This isn't "TV for the sake of TV" by any means. 

Look, the worst that consumers would do is continue to choose the bundled services. Why not start offering unbundled options, with advertising support, to see what happens?

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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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