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Message: [QUOTE="nzm136, post: 725996, member: 2531"] "the customer never pays for something they don't want with bundling (eg bundling is good or at least neutral to consumers)" WRONG. I NEVER said "eg bundling is good or at least neutral to consumers," nor did anything that I said in any way, shape, or form imply it. When done right, bundling is a more efficient method of extracting value from customers. However, when channels are bundled together, customers do not pay for anything that they do not want. Customers are simply paying closer to their limit than they would under an a la carte model. If I think that ice cream is worth $10, I will pay $10 for it, but I would rather pay $5 for it. Using that as an analogy, bundling gives customers a couple napkins (which they immediately throw away) and brings amount that the customer owes for the ice cream close to $10, whereas a la carte keeps the price to the customer owes close to $5. Under that scenario, bundling is bad for the customer, but they aren't getting an unfair deal or overpaying for anything. They are simply paying what they think the value is of what they're getting. "...money is fungible...it is the total profit generated by that content that matters to the cable company." Although technically somewhat true, this is misleading to the point of being wrong. Money is fungible from the cable company's perspective, but not the customer's perspective. Given that we are talking about the customer's perspective, that's an important distinction. Think about it; would you rather pay for programming via a cable bill or via purchasing goods from advertisers? Carriage fees and advertising revenues are two different revenue drivers and trying to combine the two revenue drivers into one is overly simplistic to the point of being wrong. Also, even from the cable company's perspective, it still matters, because although it does not matter where the money comes from, it does matter how much money there is, and a la carte will affect that number. What affects one will not necessarily affect the other. Advertising revenue will not necessarily increase to the same extent that carriage charges decrease as a result of a transition to a la carte from a bundled system. Your theory that it will is without basis, even for the big networks. Assuming that your father-in-law only cares about PBS and the BBC, he is paying $90/month because he believes that the value of having access to the BBC and PBS is worth at least $90/month. Therefore, he should not mind paying $90/month for it. ESPN has nothing to do with his decision and the price that he pays has nothing to do with ESPN, or what ESPN does or doesn't pay for their content. Somewhere along the line, ESPN negotiated with whoever his cable provider is and during those negotiations, the two parties analyzed market data to determine a rate. When they did that, they examined all major demographics, including your father-in-law's, and agreed on a fair market rate accordingly. The fact that your father-in-law's demographic seems to not care about ESPN caused ESPN's per subscriber carriage rate to decrease. Similarly, when PBS and the BBC negotiated their rate with his content provider, they took all major demographics into account and agreed to a fair market rate accordingly. The fact that his demographic seems to really, really value those channels cause their per subscriber rate to increase. He, and all those in his demographic, are paying a lot for PBS and the BBC, but not for ESPN. If they changed their mind and stopped caring about PBS and the BBC and started caring about ESPN, the carriage rates for PBS and the BBC would crash after the next round of negotiations and ESPN's would shoot up. Furthermore, companies will only pay other companies to the extent that the selling company provides the buying company with value. If ESPN overpaid, ESPN is the one picking up the tab, not the cable company. If the cable company is willing to increase what they pay ESPN, it's because either the content is valuable to the cable company, or because other content on ESPN was undervalued by ESPN during their last round of negotiations. I don't dispute that individual consumers may do better with bundling, but they are a minority and once they stop being a minority, the rules of the game will change to make them the minority again. The bundle lines will be redrawn . There's no reason why content providers cannot reshuffle the bundles at any given time and break them up/merge them together if need be. They can, have, and will continue to cherry pick. Overall, bundling is not good for consumers. A la carte and internet delivery are NOT one and the same. There's no reason why internet delivery can't be bundled. In fact, it's already being done, and has continually been done on a large commercial scale for about 20 years. That's a fact. [/QUOTE]

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