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Viacom CEO Philippe Dauman Doesn't Expect A La Carte Cable Law

Philippe Dauman

At a New York investors' conference, Daumann defends bundling channels.

Viacom CEO Philippe Dauman isn't worried about proposed legislation currently being debated that would allow consumers to choose channels on an a la carte basis.

In recent weeks, United States Senators John McCain and Richard Blumenthal have circulated drafts of a bill that would require cable distributors to give consumers the right to purchase only the channels they watch.

Dauman believes the proposals aren't going anywhere.

"When you sit down to explain to regulators about what would happen in so-called a la carte world, it’s not good for consumers," he said at Goldman Sachs' annual Communacopia Conference.

He predicted that giving consumers the right to pick and chose would increase price, and says for that reason, it won't happen, at least not via government mandate. "People are fundamentally rationalist," he added. "I would expect that everything that would unfold would be done in a commercial marketplace, not in regulation."

Dauman also defended the bundles of channels that are licensed to distributors, addressing a lawsuit brought earlier this year by Cablevision as having "no merit."

He says that while Viacom channels make up 20 percent of viewership, the programming fees paid to the company are in the single digits. He added that the cost per network, when the entire array of channels is factored, is less than sports networks like MSG, owned by Cablevision.

"There is always room for a negotiation," he says. "We do have distributors who will pay higher rates for fewer channels, but most find it a better buy to have a broader array and take the discount."

Dauman also called the introduction of potential new TV programming distributors like Intel a "favorable development" for Viacom insofar as competition creating a better incentive for distributors to compete with each other for customers.