The End of TV and the Death of the Cable Bundle

July 12 2012 - First, Viacom yanked its 19 channels -- including Nickelodeon, MTV and Comedy Central -- from DirecTV after the two companies failed to agree on subscriber fees. Second a federal judge cleared the way for Aereo, an exciting new startup that could bring local TV (NBC, ABC, CBS, PBS) to any device you wish, from a smart phone to an actual TV.

Big deal, you might say, so DirecTV people can't watch "South Park" and techies can get a crappy stream of "The View" on their iPad. That's not a wrong interpretation of the news, but it's too narrow. The bigger story here is the death of the bundle.

Every year, 100 million homes pay for a bundle of cable channels. Like any bundle, it's hard to see exactly what they are paying for. That is somewhat the point of bundling -- to disguise the true cost of the constituent items. If you watch ESPN and 17 other channels regularly for four hours a day, you are probably getting a good deal. And that means that millions of other people are getting a "bad deal" on their cable and are subsidizing your TV experience. For these millions of households -- who don't watch live sports; or only want HBO; or only need their Law & Order, ANTM, and Daily Show fix; etc -- an à la carte option for television would almost certainly be cheaper.