We are seeing a merging of media firms. For example, companies like Verizon now provide phone, cell, TV and internet. A common form of selling services involves putting them together in packages or “bundles” and offering them for a lower price than if the services were sold separately. For example, Verizon may offer a deal for phone, TV, and internet services. Also, firms bundle TV channels in different packages. All of these practices have become controversial.
Questions:
1. Do you think that the government should limit the bundling of TV channels by cable companies?
2. Is bundling a good idea for consumers? Explain your answer.
3. Explain the economics of bundling, both from a consumer and producer prospective.