Who do you trust? It depends on your political party

The Pew Research Center for the People & The Press has released a survey of 1,001 U.S. residents ages 18 or older. Of that group, 239 were Republicans, 286 were Democrats and 384 were independents. Keep those numbers in mind, because they're going to be very important in a minute. The top line of the survey, according to Pew, is "Further Decline in Credibility Ratings for Most News Organizations." And, their findings show that the believability of nine of the 13 news organizations rated fell considerably between the last survey in 2010 and the current survey. The average believability of all the organizations fell 6 points in two years, from 62% positive in 2010 to 56% positive in 2012.

Here's the table of overall ratings for the 13 news organizations:

Overall, the most trusted news sources are local TV news and CBS' "60 Minutes", and the least trusted sources are The New York Times, Fox News and USA Today. Many of the reports on Pew's study stop at that point, but they miss the real story: There are huge differences between how Democrats, Republicans and independents trust news sources:

• Democrats trust everyone except Fox News. Every news source except Fox gets a positive believability rating.
• Democrats rate "60 Minutes", ABC News and CBS News (tie), CNN, NBC News and local TV news as most believable.
• Republicans only trust local TV news, Fox News, The Wall Street Journal, and (just barely) "60 Minutes" and USA Today. They distrust every other news source.
• Even though Republicans trust Fox News the second-most, its believability rating has fallen 10 points in two years, from 77% in 2010 to 67% now.
• Republicans and Democrats are closest in their perceptions of local TV news, USA Today and The Wall Street Journal.
• Independents typically fall between Democrats and Republicans--they're less enthusiastic about news sources in general than Democrats, but less pessimistic than Republicans. "60 Minutes", local TV news, The Wall Street Journal, CNN, ABC News and NPR (tie), the respondents' daily local newspaper they know best and CBS News are the news organizations that rate positively with independents.

Here's the overall table:

This is why the overall ratings that lead the survey, while correct, are very misleading about what the survey actually found. The real takeaways are:

• Political views make a huge difference as to people's overall perceptions of news believability and media preferences.
• Republicans, at least in this survey, are too closed to news and opinions that might conflict with their world views.
• Democrats, again in this survey at least, are too trusting of the news they get from most outlets, and perhaps don't recognize that cuts in newsroom budgets since 2008 have led to a deterioration in the quality of news and opinions from most news organizations.
• Independents are the most cynical about believability across most news outlets, and probably represent the best balance of belief and skepticism.

Who's helped by "a la carte" pricing?

The Fox/Time Warner debacle (which was settled last night) has reopened discussion of a la carte pricing for cable. A la carte means that cable operators would be obligated to allow subscribers to choose and pay for only the channels that they watch. Never watch ESPN? You wouldn't have it in your channel list, and you wouldn't pay for it.

Consumers love the concept of a la carte, because it promises to dramatically lower cable costs. Most people have 20 or fewer channels that they watch regularly, and that's all that they'd have to pay for. However, a la carte is Kryptonite to both the cable operators and networks. The cable operators would have to price their services much closer to their actual costs, which would mean significantly lower revenues. They would no longer be able to offset the costs of cable networks that they have to pay for with cable networks that pay the operators for carriage. (For example, cable operators pay Fox to carry the Fox News Channel, but Fox pays the cable operators to carry the Fox Business Channel.)

Under a la carte, the cable networks could no longer get revenue from every cable subscriber, no matter whether or not they ever watch their channel. Disney's ESPN is legendary for refusing to allow its primary network to be moved to a sports tier; Disney insists on getting paid for every subscriber that a cable system has. If subscribers could pick and choose, Disney would only get revenue from those subscribers who actually want to watch ESPN enough to pay for it. ESPN's viewership numbers, and its advertising revenue, would likely drop significantly.

ESPN and Fox News are very popular, so they'd probably survive in an a la carte environment. The survival of marginal cable networks would be much more problematic. Most cable networks claim all of the subscribers to their cable systems as potential viewers, and set advertising rates (at least in part) based on those numbers. Marginal networks would see their potential viewer numbers drop dramatically under a la carte, and their revenues from cable operators would drop as well.

A few years ago, I interviewed a European IPTV operator that launched its service with a la carte pricing. The service was very popular, but it consistently missed its programming revenue goals, so it quietly replaced a la carte with the tiered pricing model used by US cable operators. The European operator found that it lost few subscribers and significantly increased revenues. (The operator's market was so competitive that even with tiers, its service was only 1/3rd the price of comparable cable or IPTV service in the US.)

A la carte pricing would be the fairest approach for consumers, and it would introduce true supply-and-demand pricing to the cable business, but it would probably also result in the failure of many existing cable channels. The forces favoring a la carte simply don't have the political or financial clout to make it happen in the U.S. at this time.