[carsongross]

Fallacy 1: There is a linear relationship between the area the author calls "consumer surplus" and the total happiness of customers.

Fallacy 2: There is no relationship between the act of bundling and the happiness of consumers.

Fallacy 3: The additional money saved by consumers if the goods were not bundled would not be allocated to higher happiness inducing products.

And so on.

There's an argument to be made regarding the paradox of choice and the inconvenience of micro-payment systems, but I don't find this one very convincing.

[dangoldin]

Another argument is the negative feeling you get from adding each additional channel. Saying let's pay another $1 for channel X 30 times has a higher negative perception than saying - oh $30 for 30 channels.

[larrys]

True. Same reason if you go to a restaurant and they started charging for the tap water a fee, even a nominal fee, you would have a negative reaction (unless of course all restaurants did that and it for some reason became accepted practice).

People don't want to pay for something that has no value to them but they will accept features that have no value if they feel they are included in a total price of what they are buying (except of course when they can compare products and make a decision not to buy a product because a competitive one is cheaper etc.)