[casca]

The author makes a good point that bundling of services _can_ be of value to both buyers and sellers, but the conclusion that it _is_ of value does not follow.

The example of 2 people, one willing to pay $10 for ESPN and $3 for The History Channel and the other willing to pay $3 for ESPN and $10 for The History Channel disregards the likely majority who would pay $10 for the one and $0 for the other.

The problem with bundles is that they force you to pay for things that have zero value to you. And given that the incremental cost of providing the product approaches zero, this is strongly in the seller's interest.

[grimtrigger]

I agree that "is of value" doesn't flow from "can be of value".

However, the idea that a company can force you to pay for things with zero value is bunk. If you value ESPN at $10 and History channel at $0, then they should charge you $10 regardless of bundling, because that is the profit maximizing price.

[pbreit]

But really no one places zero value on anything which is why your argument breaks down.

[SteveJS]

Actually you are correct it's not Zero. It's negative. If your claim were true, no one would clean the crapware off their windows machines. With respect to tv channels extra channels impose poorer usability for the on screen guides, and degrade a simple channel surfing experience.

(Note I'm not claiming the bundling prevents purchase, just that there is an economic opportunity in non-bundled alternatives, such as Windows boxes without crapware, or solving the problem of a clogged experience due to poor bundling such as Netflix's focus on surfacing desirable content.)

[pbreit]

Unlikely, even if you mistakenly think your provider would only show you the channels you subscribe to.

[dangoldin]

A low value relative to the others doesn't really affect the analysis. I'm sure there are tons of channels people don't go to each month.

Imagine being an English only speaker and getting a Spanish channel - what would you pay for it?

[pbreit]

An extreme example and still totally unconvincing. I don't speak Spanish but would like to learn. My wife's family doesn't speak spanish but their nanny does. My brother doesn't speak Spanish but watches futbol. My dad likes to stop on telemundo periodically. My other sister has a few Spanish speaking friends. And on and on.

[dangoldin]

Everyone has their own utility and I guess we just differ on ours. I don't want to generalize but I personally wouldn't pay more to have a set of Spanish channels. Arguably if there were too many Spanish channels I'd pay less since navigating my TV would be too difficult.

[wink]

Why would I not value a channel I will absolutely not watch at all at $0?