In this week's Media Fall Preview conference, hosted by Merrill Lynch, a News Corp. (NYSE:NWS) executive showed how much better the company understands the new-wave digital media market these days -- and how much it still has left to learn.

Too much monkey business
You'd expect a certain degree of savvy about the demands of the changing media market, given that Rupert Murdoch's media empire owns MySpace, the single most popular site on the entire Internet. So when COO and President Peter Chernin says that the current credit crunch is a good thing for the entertainment industry, that's coming from a very consumer-oriented mind-set.

"I certainly sit here and hope that it will really dry up because I think it's been a real negative force on the movie business over the past couple of years," he said. "There's too much easy financing around. It makes the marketplace much more crowded than it should be, both on the theatrical side and ultimately on the video side -- and it tends to encourage stupid deals. There's too much money chasing too little talent, and so there's too many movies being made, too many actors being cast."

The easy financing of the past few years has driven up salaries for the limited pool of actors and directors, he explained, and so a return to tougher borrowing standards should lead to less ridiculous movie budgets and better movies.

That's a brilliantly stated view of what's really ailing the media market, and I couldn't agree more. It's so easy these days to find entertainment from a cornucopia of delivery systems that you just can't expect to push out substandard content and expect it to sell.

If the theater megaplex looks unappealing, we can go home to our home theaters and DVD collections, or turn on the digital cable box with its hundreds of on-demand movies and a few dozen premium movie channels, or turn to the computer, where MySpace, Yahoo! (NASDAQ:YHOO) Video, and Google's (NASDAQ:GOOG) YouTube alone give us access to millions of funny, poignant, or plain weird short-form clips.

One obvious solution to the theatrical weakness of the last few years is to improve the product quality, and some fiscal responsibility could go a long way toward keeping cinema clear of drivel like Daddy Day Camp and Gigli. No script? No money!

Back to the future
But then, Peter took a strange turn back into a bygone era. In response to a question about a la carte cable TV programming, where the consumer could pick and choose which channels to pay for, he noted that such a scheme would probably clean up a bit in our TV listings.

He said that we would "see a lot of channels go away and it would have a negative impact on the launch of new channels and would make some of the very popular existing channels, particularly the sports channels, extraordinarily expensive." And that would be a bad thing. He couldn′t see where it helps the business, or the customer, and certainly not Comcast (NASDAQ:CMCSA) and friends.

Let me address this issue in the language of rock′n′roll.

"I′ve got thirteen channels of [golf] on the TV to choose from."
          -- Pink Floyd, 1979

"57 channels and nothing on!"
          -- Bruce Springsteen, 1992

"I think it′s turning to a crock, but I don't really know."
          -- Matchbox 20, 2007

If the movie theaters are too crowded, then why should we have to live with the bloated television slates? It helps to have a TiVo box or the equivalent knockoffs, because you can set that up to record the stuff you actually want to see and then never have to look at a live schedule again. But even that setup has become a time-consuming chore, wading through several hundred channels, most of which I wouldn't pay a red dime for separately. Three golf channels, including one in high-def? Come on, now.

And if some of these stations don't have a core audience large enough to sustain them as a business proposition, then why should the average cable viewer have to subsidize their existence? There are plenty of niche stations that would be better off shoveling their productions onto YouTube or some other searchable service, where it won't get in the way of our daily entertainment travails.

The good stuff will survive. The big four networks don't have anything to worry about, nor do popular cable stations like Viacom's (NYSE:VIA) MTV and Nickelodeon, or USA Network from General Electrics' (NYSE:GE) NBC unit.

Peter, you can't have it both ways. You've clearly understood what your customers want, and that's quality content in convenient portions. A la carte TV will help with that, and the sooner you see that, the better your business will do.

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Fool contributor Anders Bylund is a Google shareholder but holds no other position in any of the companies discussed here. You can check out Anders' holdings if you like. Foolish disclosure always knows what's up.