More on channel bundling

Explanations why channel bundling may actually be good, since you get more channels for a lower price, over at . This doesn’t address how some channels are only availble in high priced bundles. Maybe it’d be possible to pick what N (5, 10, 30) channels you get?

More plausibly, price discrimination is at work. Consider a simple example with two individuals. John values Disney at $100 a year and FoxNews at $10 a year; Sally has the reverse valuations. Without bundling, the cable company will offer each channel for about $99, and sell a channel to each consumer, reaping $198 in revenue (N.B.: I am assuming that the cable company has a good idea of demand in general, although it cannot identify which consumer is willing to pay how much for what.)