This article in the NY Times is a good read about cable pricing. Why would rates increase?
- Because ESPN charges $3 per subscriber that Bright House has. But maybe only 25% would subscribe a la carte, so the rate would be $12. ESPN would want to make the same amount of money. Something like BET or Hallmark might have to charge 12 times its rate.
- Advertisers would have a smaller audience so ad rates would decrease. Subscriber rates might increase to balance that.
- Channels would need to start marketing their channels to get more subs. (Think about the marketing budget of Showtime or HBO).