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I think the main reason bundling will continue to be how most television is offered is because it offers easy price discrimination. Which customer will be willi
by salmonellaeater 13y ago
I think the main reason bundling will continue to be how most television is offered is because it offers easy price discrimination. Which customer will be willing to pay more for ESPN: customer 1, who already is subscribed to 200 channels and has more than enough shows to watch; or customer 2, who isn't subscribed to anything? The cable companies and networks know that each additional channel or show offers diminishing marginal returns for the customer, and they want to get as much of the surplus in this transaction as they can. If they unbundle, they'll charge much more per channel, because they know customers will be willing to pay more.
If unbundling starts becoming more common, the big advantages I see for consumers are that people will waste less time watching things they don't care about (because they never subscribed to them in the first place) and money will go to studios that produce quality shows people are willing to pony up for, increasing the overall quality of entertainment. I'd love to be able to not subsidize reality TV.