...But - the cost of delivering content has dropped dramatically. Extremely - but the cable companies have not passed along this price drop (mainly because they are slow moving and monopolistic) - but Google is probably making them all their pants. Your logic around bundling will be fine, but only after the massive price drop occurs. Until the price apocalypse hits - look to prices of other digital content for clues, these companies are going to hold on for dear life.
Yes and no... If it's the actual transmission of the signal, then yes. But if we're talking about the cost of the content itself, then it's a RESOUNDING no.
Just 10-15 years ago, most if not all cable nets aired syndicated reruns and other content they were buying on the cheap. Think back to TBS in the 80's and 90's... It was all Giligan's Island, Brady Bunch, I Love Lucy, Bewitched, I Dream of Genie, Andy Griffith, Leave it to Beaver and other syndicated crap that they bought for pennies on the dollar.
That's what all the cable nets did - Cheap programming across the board.
Now, with the need to attract eyeballs and JUSTIFY the carriage fees, all the cable nets are broadcasting original content - LOTS of original content.
And that stuff aint cheap.
A typical hour-long reality show on Discovery, Bravo, Tru, A&E, TLC, and other similar nets costs anywhere from $300-450,000 PER EPISODE right off the bat. If the show becomes a hit, the cast can and always does demand pay raises - HUGE pay raises which often double the initial budget to over $600,000 per ep - with some hit shows topping $1 million per episode.
For example, the cast of "Here Comes Honey Boo Boo" TRIPLED their salaries to $20,000 per family member PER EPISODE immediately after the show became a smash hit.
On "Jersey Shore" the cast members made less than $1,000 each per episode during season 1 - meaning the show wasn't too expensive. In season 2, they each got a bump to $10,000 per - this probsably increase the episode budgets by %20-30. By season 5, their salaries were: Snooki: $150k, The Situation: $150k, Pauly: $150k, JWOWW $100k, Vinny $90k, Ronnie $80k, Sammi $80k, and Deena $40k - PER EPISODE.
Just today, the women on "Real Housewives of NY" demanded huge raises from Bravo or they'd quit. This happens all the time.
So yeah, the cable nets can bounce the signal around much more efficiently than in the good old days of cable and satellite's infancy, but it's not cheaper than back then.
I think the right price, btw - for a channel like ESPN will probably settle in at about $2-3 a month. Let's check back in about 7-8 years and find out. The smart distributors can make up some of the difference with more targeted and interactive advertising solutions. I am not crying for them.
ESPN will be back at $2-3 a month right around the time they go back to their late 1970's heritage and broadcast roller derby, ping pong, and overnight marathons of two guys playing catch in their back yard.
But if you think ESPN is gonna drop it's per subscriber fee AND keep showing MLB, NFL, NBA, NCAA Hoops, and NCAA Football - along with all the other top sporting events and studio shows they broadcast - you're insane.
ESPN will NEVER again be cheap.
And the providers know the must pay whatever ESPN demands because the first carrier that drops ESPN is gonna lose more than half their customer base to a competitor - overnight.