Survey: A la carte could fetch $1.50 per channel

US consumers would overwhelmingly prefer to pay for just 19 TV channels at $1.50 a pop than their current multichannel packages, according to a new survey.

RBC Capital Markets found that 92% of over 1,000 respondents are interested in a a la carte TV offering that would cost them far less than the $84 they pay for access to at least 91 channels on average. But the investment research firm's math confirms long-held views by both content companies and MSOs that a la carte economics would dramatically hurt a business that is a major revenue driver to both industries. A likely scenario sketched out by RBC's report envisioned the $34 billion content companies received in affiliate fees last year getting cut roughly in half if consumers could cherrypick channels. "All in all, we don't think the industry (both pay-TV operators and programmers) have much to gain (if at all) from a financial perspective from providing the type of a la carte service the consumers want," the report concludes. While respondents reported currently watching an average of just 14 channels in their current package, the average number of channels they would buy in an a la carte scenario was 19. With $1.50 the average amount they cited as worth paying per channel, 19 channels would return $28.50 to MSOs, or about a third of what they currently collect from bundled packages. Multiply $28.50 by 12 months across the existing 100 million subscriber base, and the total is $34 billion. But MSOs would have to hand over a portion of that to the programmers; if that revenue split was what it is currently estimated to be--approximately 50%--that would give programmers about half of what they current derive in affiliate fees. Then there's the likelihood that at just 19 channels apiece, the 100 million subscriber base would drop precipitously, further reducing revenues.