For decades, cable television has been an almost magical source of profits, in large part because of the bundle, the packaging of channels that compels subscribers to buy a lot of programming they never watch.
Last week, that bundle seemed to be fraying on all fronts.
The threat was most visible on Tuesday in the Supreme Court, but before we get to those august halls, it’s worth remembering that the bundle has been a robust generator of profits in all manner of industries. Every time you order a value meal at McDonald’s, you are ordering a bundle. You, um, benefit by getting a lot of food — a container of French fries the size of your head — and McDonald’s benefits by selling you more than you really wanted.
My cable bill is the same way. I don’t watch Animal Planet or TruTV, but I pay for them as part of a package that includes the channels I do want.
The cable industry books that inefficiency as profit. It is the lucrative lifeblood of the current entertainment business. Last year, media analysts at Needham & Company estimated that $70 billion — half the total revenue in the television universe — would “evaporate” in an unbundled world, and that all but 20 channels would disappear. (It’s also important to consider that the bundle, for all its shortcomings, helps add a great deal of diversity to cable offerings.)