1. Cable is a government protected monopoly, therefore they can set the rules.
2. The 'rules' consist of package pricing only, no ala carte pricing. So, if you want the Oprah channel and nothing else, you have to buy 15 MTV's, 25 ESPN's, a bunch of Discovery Channels, etc.
They can't even offer packages that makes sense. For instance, a 'just sports' package, or a 'just cartoons/kid shows' package, or a just news/weather package, for instance.
The 'basic' package gives you one of each category, while higher level packages consist of a lot more of all categories, never all of one category/interest.
You’re absolutely right. The cable companies have a monopoly on the towns they serve. I am stuck with Charter Communications for cable service and that’s it. I cannot believe this has not been broken up yet in this day and age.
Truthfully the package pricing rules come from the channels not the last mile cable providers. If a cable company wants to offer ESPN they have to put up with the fact that ESPN is a huge conglomerate in its own right that wants them to also carry ESPN2, Des Portes, Classic and News AND is also owned by Disney that’s pushing half a dozen of their own channels. This conglomerate gives a better deal to a cable company that takes everything and puts most of it in the basic package, that all in one deal charges the cable company based on their total number of customers. The cable company could offer a la carte but they’ll still have to pay Disney (and Discovery, and Viacom, and History) based on total customer count.
Until Disney (et al) is willing to be paid exclusively by channel and by the number of people actually wanting those channels the cable companies’ hands are tied. The 10 or 12 most popular channels, the ones that are why people get cable, want package deals, both between them and the cable companies and between the cable companies and us, and therefore there will be package deals.