[newbie789]

That's an interesting perspective, but it kind of looks like a lot of graphs saying "You should pay for stuff you don't want because otherwise it would incentivize the sellers to price gouge you for the stuff you do want"

I'm kind of confused, if it's an adversarial relationship where the seller is going to extract as much money from you as possible in either scenario, wouldn't some consumers prefer to pay specifically to starve out content they'd prefer not to see?

Maybe I'm not understanding this page, but it looks like it's "good" for me because instead of paying $9-10 for the History Channel alone I'll be paying $11.70 for History Channel + ESPN (which I will literally never watch)?

I'm not a calculus genius but I'd prefer to spend less money and only have what I want. This model assumes that I'd be willing to spend $3 per month on ESPN, but how does the graph look if I were willing to spend $0 per month on it? Or hell, since pricing is arbitrary, I'd like to pay -$3 per month as a courtesy for having to scroll past content I genuinely do not want to consume let alone subsidize?

[ridaj]

The argument is not about your buying preferences as a consumer. Of course if you had a choice between (a) paying X for watching stuff, or (b) paying Y for the ability to watch exactly the same thing, but Y is overall less money because it is somehow dependent of the amount that you consume, that is the better choice.

However, the economic equilibrium of a perfectly unbundled system is not that you get to watch the same thing for less money. It is, in the general case, that you either get less content, or pay more, or both.

To take your example, realize that it is outlier behavior to be willing to pay $9/mo for History and $0/mo for ESPN. If you took History channel, with the content that it has now, out of the cable bundle and tried to sell it $9/mo, or even $1/mo, there would be way too few interested customers to make such a proposition economically viable.

In a perfectly unbundled world, content such as the History channel does not exist. You only have marquee content like ESPN, movies for rental or purchase, or (if lowercase history is your thing) highly produced documentaries, i.e. the kind of content that willingness to pay for is high enough to justify the high customer acquisition cost. You do not have content like History channel because it lies in that tier of things that many people are kind of interested in watching, but only if it comes with something else more valuable that they already paid for.

One can debate the societal value of the existence of content such as the History channel to begin with, but that's what the argument is about, not about the consumer's individual preferences in a hypothetical world where it would be possible to watch the same content for cheaper.

[angry_octet]

This misunderstands the market. I would pay for the History Channel but I wouldn't pay for ESPN. And I won't pay for a bundle because then 'analysts' will think I'm getting it for ESPN.

History Channel is cheap to make compared to sports, would definitely be able to pay for itself with cheap subscriptions.

Cable TV with bundling is just a local maxima established decades ago. The long tail of interest that drives regular youtube is the proof.

[ridaj]

If this misunderstands the market, I'd be interested in a positive proof of a channel like History making it as an independent offering. I don't personally know of any.

[FeepingCreature]

> You do not have content like History channel because it lies in that tier of things that many people are kind of interested in watching, but only if it comes with something else more valuable that they already paid for.

This seems like you're saying "bundling mis-serves the customer." If the History Channel would not exist if people could pay for it directly, then why should it ought to exist?

[Jweb_Guru]

The idea the article is trying to get at is (I think) that people are willing to pay for the history channel, but as long as they're more willing to pay for some other channels, studios will just jack up the price of the other channels to the point where their funds for discretionary spending on television are exhausted very quickly. This is because it's cheaper for the studios to get people to pay more per show while producing fewer shows, as this increases their profit margins to the maximum they can get away with. The argument that this is bad for consumers is pretty straightforward, but I will point out that these incentives only work so long as consumers have no choice about their cable provider. i.e., the problem is that cable providers are monopolies, not the bundling specifically. Moreover, we've clearly seen over the last two decades that these monopolistic practices have driven huge numbers of people away from television... unfortunately, usually the competition requires the internet, and the same cable companies control internet access, so there's no particular reason for them to change their business model.

[ridaj]

That's what I meant by, we can debate the merits of the History channel to begin with. I only took challenge to the notion that there is a world in which unbundling happens and consumers get to watch the same content for less money.

Whether or not it is "mis-serving customers" depends a bit on whether there's abuse of monopoly power, which is an argument one can make about the cable companies, but not so much about the over-the-top services like HBO Go, Disney+, Netflix, or Prime, all of which are structured as a bundle. I'm not sure Prime customers, for example, are unhappy or feel mis-served by being able to watch TV shows on top of being able to order items with fast, free shipping. Bundling can be used for nefarious value-extraction in a monopolistic market, but it can also bring consumers value, so we shouldn't conflate the two.

In many competitive markets, bundling is often a consumer's preference that does serve customers well. For example, most coffee shops don't charge for sugar, creamer, and other condiments, and you maybe have some aggrieved consumers complaining that they should get a discount for drinking only black coffee. It's likely that coffee creamer companies would go bankrupt if people had to pay for condiments at every coffee shop, and we can debate whether it's even a good idea then. But on the whole, I don't think that turns into an argument that coffee shops are mis-serving customers by providing condiments that are free of charge, that is to say, bundled with the price of coffee.

Personally I live in an almost perfectly unbundled world of content already, because I tend to buy or rent the TV shows that I'm personally interested in. This works for me because I have little time to watch, don't like ads, and have enough disposable income that I'm not thinking twice about cost, but I'm not sure that many other consumers would be satisfied with the kind of entertainment experience where they have to pay $2 per episode of their favorite show.

[s17n]

You aren't going to be able to spend less money though. Since there's zero marginal cost to adding extra channels, you should assume that the price you're getting charged isn't actually based on the number of channels you subscribe to.

A better way to think about bundle pricing is that the channels you really want cost $50, and they throw in a whole bunch of other crap for free. Why turn down free stuff?

[newbie789]

If those channels are free (and by that reasoning, not actually factored into the price of my package) then why am I unable to get individual channels or create my own bundle? Either I'm subsidizing stuff that I don't want to watch, or I'm not.

Is your point that I can't spend less because... they're going to get $50 out of me either way? Except that's impossible because there is no other way so there's literally no way of knowing a theoretical cost so it's safest to assume it's going to be $50 or more?

[Ruthalas]

The parent comment lists a specific reason why they'd turn directly the 'free' stuff. It requires more effort to then access the content they want to get to when they have to navigate around the cruft.

Whether that factors much into your personal value assessment or not, that is a valid downside to having a bunch of extra channels you don't intend to watch.

[lotsofpulp]

People don't turn down free stuff. It's just that they no longer value the content provided via TV channels at the price they are asking. The fundamental problem is content that used to be delivered via TV is no longer worth what it once was.

[s17n]

If that's the case, then the prices should go down for bundled content (and this does in fact appear to be what is happening).

A la carte makes no sense.

[baddox]

Except this article is about YouTube TV adding more channels and charging everyone more.

[s17n]

They're announcing these things at the same time for obvious reasons, but you can assume the prices would have gone up anyway.

[baddox]

That seems like an awful lot of assuming. Even if it's true that they needed to raise the price of their existing channel offering, and only added new channels to help justify the price increase, that still counts as bundling being used to increase the price.