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Message: [QUOTE="cuseinchina, post: 726562, member: 3079"] There are contradictions here even within paragraphs. I am reminded of cable execs about five years ago going to the fcc hearing and talking about all the benefits consumers will get from bundling of services and then the next day same exec goes to an investor meeting and talks about all the monopolistic profits extractable by forcing consumers to buy video with their internet service. Fortunately the fcc saw through the lightly veiled scheme and determined that cable companies and their telco competitors would have to sell stand-alone internet access outside of the bundle. A ruling which by the way takes care of the conclusion of your last paragraph that internet can be bundled by force - not according to the regulators it can't (thankfully). At the end of the day bundles are monopolistic when forced upon the consumer who's only alternative is no access to the content they want. There is nothing optimal about them unless you are A. a cable company or B. someone who wants 300 channels of garbage and wants to be subsidized by those who don't. The question is not whether my father-in-law is WILLING to subsidize ESPNs propensity to overpay for sports rights which is then passed on to people who never watch a game because he wants to get BBC and PBS...it is a question of whether this is morally right in a society that espouses competition and freedom of choice as core virtues. When it comes to consumer pricing and margins for the content providers, you are missing the point. For one thing carriage fees are not replaced by ad revenue, rather they are replaced by subscriber revenue from consumers who will pay for the content they want, not the right to watch many channels. You say that a la carte and alternative delivery of content are separate. But as you have noted a la carte breaks the bundling business model...so if the cable companies offer it there is no reason the content providers would not be open to alternative transmission provided the technology is there to make it successful (see industry forecasts calling for 50% smart TV adoption by 2016). Once you cut out the middle man cable company, consumers and content providers will split the cable company's monopoly take between themselves (in some proportion that depends on the pricing power of the individual content provider). A small proportion will go the content aggregator - whether that is the existing MSO cable providers, the telco, google, Apple, Microsoft, whoever - but without the monopoly that portion of the pie becomes very small because companies like google get massive ancillary revenue benefits by controlling the interface in which the consumer engages the a la carte model - they don't have a big infrastructure investment to maintain or on which they have to show positive returns - rather they have the technology to be better intermediaries between consumers and the content they desire, and have the financial structure to charge much much less than the cable companies for doing so - thus leading to better pricing for consumers and higher margins for producers of quality and niche content because the middle man service becomes a commodity instead of something people are forced to pay $50 or whatever a month for. In short, the cable company adds almost no value to consumers of content in a world where alternative transmission is possible. I say within 5 years this is what the world looks like, you disagree (I guess though tough to tell with the contradictory statements) - how about a wager to see who's right so I can stop responding on here and risking my > 1:1 message/like ratio? [/QUOTE]

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