While anti-bundling advocates purport that a la carte programming would reduce costs to consumers, it simply isn’t true. In a series of posts from his blog Stratēchery, Ben Thompson provides compelling evidence to show that if ESPN was offered on an a la carte basis, it could maintain its current profitability only if individual subscribers paid about $100 a month for it. The assumption that subscribers could support a la carte programming without advertising is further underscored in a recent “Future of TV” report that predicted “~50 percent of total TV ecosystem revenue would evaporate, and fewer than 20 channels would survive in an a la carte world where consumers are required to bear 100 percent of the cost of the channel.” Could pay-TV reduce subscriber fees by taking a smaller profit margin? Perhaps, but that’s a topic for another discussion.
By and large, bundling satisfies the needs of most people in the bell curve–and does so by providing mainstream as well as niche programming. But make no mistake: Subscribers’ fees help provide the funds needed to develop and air breakthrough Emmy-caliber programs like Mad Men as well as niche programs. (In an a la carte environment, each channel sinks or swims according to its individual, rather than bundled, fees.)
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