[groby_b]

There's something odd about those numbers - if really _all_ of those channels, including ESPN, are too expensive to be financed by just their viewers at the current cost level, and each household would pay more for just the things they want... Where exactly does the money for those channels come from?

The logical conclusion would be that large numbers of people never watch their cable TV at all and just subsidize entertainment for the rest of us. I don't think I believe that, given U.S. entertainment consumption habits.

[nemothekid]

My hunch is OP's calculations are right, but his numbers are just wrong. I have a tough time believing ESPN only penetrates 4% of American Households.

Looking at his sources I think OP's error comes from the fact that he is using Primetime viewership as a metric. I'm going off assumptions here, but I would think that ESPN's major value add is huge number of people watch ESPN at all times of the day. SportCenter, for example, doesn't air during primetime, but airs continually throughout day.

Looking at the Primetime numbers, The History Channel scored higher than ESPN. However I would guess at all other times in the day, ESPN has a much, much higher viewing audience at other times of the day.

[monkbent]

Yeah, I should have been clearer. It would lower the a la carte price, but it would still be a pretty unsustainable number.

[groby_b]

At the very least, you also need to look at how much of the programming is original vs. reruns of already existing content.

I have a strong hunch that if we actually did these numbers, we'd see that there are a few programs that are way more expensive to produce than others. (ESPN and sports licensing fees come to mind).

Which means bundling artificially props up overpriced content - I'm really not sure how you can come to the conclusion that that is good for everybody.

[jaibot]

Behavioral economics. People are willing to pay $50 for 24/7 access to 40 channels, but they won't pay $1 each for the 50 things they actually watch.

[groby_b]

Hm. Apple TV/Amazon Instant Video/GoogleTV seems to put paid to that idea.

At the very least, there is a group of people who are willing to pay for unbundling.

[pbreit]

Apple TV mainly used for Netflix/Hulu. Amazon mainly for Prime bundling. So even the online players are going with bundling.

[groby_b]

Do you have numbers to back that up? (Not doubting it, just curious - there's not much reporting on that issue)

[monkbent]

It works the same way roads and bridges work; collective payment.