As media providers like Hulu continue to offer highly customized and unbundled entertainment options, Rob Pegoraro writes a timely article on a la carte cable pricing. I agree with Pegoraro, and his argument for a flexible cable pricing model highlights an important trend that affects many industries.
The decomposition of a product or service into discrete parts, or what many call the “great unbundling,” developed recently in modern business. We have all witnessed traditional bundles: a music CD, a newspaper with many sections, and a cable package with hundreds of channels. Implicit in these bundles is the decision about what gets bundled together in the first place. Rob rightly notes one bundle does not fit all. I don’t like the style section in the newspaper, I don’t like the game show network, and I don’t like the 13 songs on a CD that aren’t the hit single. Fortunately, successful enterprises such as Apple’s iTunes have discredited this anachronistic approach to product bundling.
Unbundling has a powerful implication: personalized aggregation. Examples of personalized aggregation include Google reader for news, Boxee for media consumption, and Amazon MP3 and iTunes for music. With these tools the consumer assembles a custom package of content, cobbled together from a variety of sources. Personalized aggregation empowers the consumer to pay for only what one chooses to consume. The cable industry should note that companies which honor this philosophy will ultimately thrive.
P.S. – Let's not be rash and unbundle the Oxygen channel. Hidden Gem.
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