New Challenges Chip Away at Cable’s Pillar of Profit

[Commentary] 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. On April 22, that bundle seemed to be fraying on all fronts.

The threat was most visible 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. Clearly, much is at stake in the current bundling arrangement, which has some powerful backers, but a future where consumers will be able to assemble an à la carte menu of entertainment suddenly seems much closer.