There are two main reasons why a la carte cable will never take off. Both relate to the exceptionally strong position of content creators – its not anywhere near the “ideal market” of many widget makers selling interchangeable items.
First, because of the practice of “bundling” by the content creators like Discovery, packaging The Discovery Channel along with TLC and several less popular channels (Military, Science), and offering cable companies a take it or leave it deal. If they don’t accept the less popular channels then they don’t get the very popular channels. Likewise, Disney does this with ESPN and all the ESPN family of networks – you get all of them whether you like it or not, and if you don’t, prepare to face the wrath of your own customers when you drop ESPN as they flee to other providers like DirecTV.
Second is because of the lack of competition and regulation. Disney/ESPN could offer the same deal and conditions to all television distributors and there is nothing anyone can do about it (other than manage to start a highly successful competitor to ESPN and manage to steal their mindshare). Even If the FCC or local regulating authority were to force a la carte on cable and satellite companies, ESPN and other large content creators can tell the cable company that they’re going to pay $2.50 per month per subscriber, regardless of whether or not the subscriber actually chooses to subscribe to ESPN or not. This means that regardless of what subscribers choose, on average they’ll end up paying the same price for less content.
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