| 'tptacek claimed that bundling makes perfect sense. And it does, for the same reason that newspapers don't charge extra for the sports section. Bundling happens in every industry with high fixed costs and low marginal costs. I don't want to subsidize any of that crap You are in a shared market. CNN makes around $250 million a year from cable subscribers. Let's say 100 million households with cable just to make the math easy. So each is paying $2.50 for CNN. Now, let's say all those households got to choose yes/no on whether they got CNN, and half those houses don't watch any CNN and half of them watch CNN regularly. They wouldn't be paying $2.50 each. They would, to a first approximation, be paying $5 each, because built-in to CNN's pricing to the cable companies was the fact that only half their customers watched it, and it doesn't cost the cable company any extra to provide it to those people who don't want it. To a smaller degree, this is what happens if you shop at one store in a mall. You are "subsidizing" the other stores in the mall because they have joined forces to reduce their shared, fixed costs. But those other stores are also "subsidizing" you. |
And why should this concern me?