These kinds of complaints betray an ignorance of business economics. One would expect that from Congress, but it would be nice to think that the American people are smarter (sadly, what with the clamor for "anti-gouging laws" and the like, there's little evidence of it on the ground).

As Peter Suderman points out, the problem is that the cost of adding a cable channel is extremely low relative to providing the service in the first place. Like him (and no doubt many others) I am paying for many channels that I never watch, and will never watch, and wish that I could dump them for a lower satellite bill. But that's not how the business model works.

It's similar to the restaurant problem (which to my mind is one of the causes of the "obesity epidemic" among Americans, to the degree that it exists). The bulk of the cost of eating in a restaurant (unless it's serving larks' tongue pie and pan-fried snail darter) is overhead: rent, lighting, environmental control, power for cooking and refrigerating, wages, benefits, etc. I'm not sufficiently familiar with the business to know the exact numbers, but it wouldn't surprise me if the cost of a meal, at least in a small place, was sixty to seventy percent overhead, with the rest going to the cost of the food itself. Say that it's three quarters. That means that if you provide twice as much food, you only increase the cost of the meal by twenty-five percent (and the converse is that if you provided no food at all, but merely the ambiance and pleasure of having people wait on you, the price of a twenty-dollar meal would still be fifteen bucks).

There are various ways to compete in the restaurant industry, including branding, food quality, atmosphere, service, but one that's of value to a lot of people is food quantity. Based on the economics described above, the latter is one of the cheapest things to increase, and much less costly than hiring better chefs, or classier waitpeople, or investing in a branding. This is particularly the case when you increase the quantities of really cheap food, such as starches and sugar. The fast food industry figured this out a while ago, with "biggie drinks" and "supersizing." Giving the customer an extra potato's worth of fries, or another spoon of corn sugar with flavored water added only pennies to the meal cost, but seemed to many customers to provide a bargain.

This is in fact why Mexican restaurants have such high profit margins relative to other cuisines. You rarely get good-quality meat (and if you do, you pay a lot more for the dish). It's usually bits of chicken parts, shredded beef or pork, or (in some of the less reputable places) "meat"..., disguised in a hot sauce, and wrapped in a flat unrisen bread made of corn or wheat, combined with rice and beans. You can get stuffed with unhealthy high-glycemic carbs. Not to mention, of course, filling you up pre-meal on sectioned deep-fried corn tortillas and a chopped tomato sauce. It used to be that Mexican meals were cheap, relative to others, but once it became trendy, they started to make a killing, particularly the chains, charging as much for this low-cost meal as other restaurants do for meat that you can actually identify (at least as regards to species).

What's worse is that these are exactly the kinds of excess calories that we don't need. If they upped the protein, it would be much healthier for us, but that would cost much more (though even there, they've managed it, with double and triple burgers, but you'll notice that there's a much bigger price jump for these, since the meat and cheese are the most expensive parts of a burger). I've often wished that I could get a cheaper, smaller meal, but like the case of the bundled cable or satellite channels, the economics militate against it.

By the way, it should also be noted that misunderstandings of the difference between fixed and variable costs also lies at the root of many people's ignorance about the source of high space launch costs, even among professionals in the space industry.

Rand, the only one who spouts that crap is John Pike, and given a decade of training I'm sure he couldn't even become a professional at tic tac toe, let alone the space industry.

Why did the words 'John Pike' and 'Jeffery Bell' and 'Greg Easterbrook' magically appear in my head when I read the last paragraph?

Especially John Pike!

With food as with military resources, quantity has a quality all its own.

Your comments on portion size are on target. I think the supersizing trend really began in the stagflation 70s, when restaurant owners were forced to raise prices substantially year after year. It was then that I noticed the portion size increase, usually concurrent with a price hike -- a higher price but a bigger sandwich, or whatever, got less resistance from the customer.

Rand, you described and gave examples of the problem only to people who know what fixed costs and marginal costs are.

The cable television analogy may not work in this case, because you're assuming that the key cost is infrastructure and technology, rather than licensing the channels. The problem is that your cable television company has to pay a fee for each channel it features, and some cost a lot more than others. Because of this, they claim that they have to package the channels, giving you the high demand ones with the low demand ones. And it's a lot more complex than simply the demand-pull--channels are owned by big corporations that force cable companies to take the lower demand channels with the bigger ones.

One can imagine that eventually technology is going to render this moot, as everything is going to come into your house on a thick pipeline and you'll access it like the internet.

As for the complaint that people want to "clean up" their selections, this is a result of poor technology design. There is already a way to block out channels that you don't want to watch on your cable. It should be easy to develop a cable box/remote that allows you to assign a channel any number you want, so that the only channels you watch are 1, 2, 3, 4, 5, etc. But a lot of the graphic interface software for cable, TiVo, DishNetwork, etc., leaves a lot to be desired.

If you're a new start cable (or satellite) channel, you'll probably have to pay service providers to carry your channel instead of having them pay you. This is especially true for niche market channels. You then hope to recoup the costs through advertising. It's similar to how grocery stores are paid by producers for more favorable shelf placement. Placing an item on the top or bottom shelf means it's less likely to be seen by shoppers, so it's less likely to be bought. Producers compete with one another for the best product placement by paying, well, bribes to the grocers. This is especially true for the larger stores.

Rand's point isn't that you can't block channels you don't want to see. It's that you have to pay for them anyway. I'd prefer never having to pay for about 1/3rd of the channels I receive because I never watch them.

"I'm not sufficiently familiar with the business"

Yet, that doesn't stop you from spouting off (and displaying your ignorance) anyhow.