To pay for [the reported $8B deal], Time Warner is going to charge other carriers (Direct TV, Dish Network, other cable systems) $4 or $5 per subscriber for the right to carry the new Los Angeles Dodgers network they’re operating, with those costs passed on to the other carriers’ customers. This is how all sports TV rights deals go. ...
Many — probably most — of the customers who are seeing their cable bill go up are not Dodgers fans. They just want to watch Nick Jr. or History Channel or BBC America or any number of other channels. But, because you can’t (for the most part anyway) pick and choose which channels you get, the non-sports watchers are helping subsidize the sports watchers.
Joe Flint and Bill Shaikin of the L.A. Times ... talk to one former TV executive who thinks that such a pattern is unsustainable:
As I wrote about here, bundled cable makes a mockery out of capitalism, because there's no mechanism by which the consumer can let the supplier know the true value of their product. To reiterate my example, I pay Verison something like $45 extra a month for their "Basic Plus" package (or whatever meaningless name it's called) just so I can have access to NESN and Red Sox games. I get a shitload of extra channels with that package, but do I watch any of them? Hell no. I'd happily pay for NESN alone, but that's just not possible. Stop subsidizing bad programming! Split apart the bundles and institute a la carte cable pricing and let the market do its work!“[“a la carte”] is the solution everyone should be looking at seriously,” said Derek Chang, a former senior executive at satellite broadcaster DirecTV. Such a move, he added, may be the only way to lower the cost of TV sports. “Ultimately the market for fees would then reset.”
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