reply to Crookshanks
Re: content providers a'la carte only works if it's economically feasible for ALL parties involved. The last DirecTV dispute with Viacom for example brought to light a big hole in the a'la carte model. DirecTV pays Viacom a set price for an entire BUNDLE of channels, not a per channel price, in order to get a favorable rate. That bundle pricing is passed on to the customer, and it's probably written in the carriage agreement that it's all or nothing to the customer anyway.
There's just no way DirecTV could offer that pricing to customers a'la carte, let along CHEAPER pricing.
reply to SunnyD
Well, I always assumed that they signed agreements for bundles of channels, but they could still separate out those bundles into different packages. Want the History Channel or A&E? Buy the A&E package. Want ESPN? Buy the Disney package. Want TNT or CNN? Buy the Turner package. Not as ideal as a'la carte on a per channel basis but it's still better than the "all or nothing" model we have today.
As far as pricing, it's a given that you'd wind up paying more per channel than you currently do, but the hope is that you'd pay less money overall by dropping unneeded channels. It would also allow consumers to see the true cost of different channels/bundles, whereas today they are insulated from it. Connect them closer to this cost and the content providers will eventually see decreased uptake as a result of their never ending price hikes. It would also solve the problem of content providers holding the cable/satellite companies hostage. They can charge whatever they want, consumers will either pay it or ditch their channels.
In the ideal world you wouldn't even have the cable company as the middle man collecting the funds. Imagine a purchasing model similar to the way you select a long distance provider on your POTS line. You deal directly with the provider, work out whatever pricing/contract arrangement you want with them, then they tell the cable company to release their channels to your equipment.