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TheStreet Open House

Useless Things You Are Forced to Buy

Stocks in this article: NMSFTAAPL

BOSTON ( TheStreet) -- We often hear that "You get what you pay for," but it's just unfair when you're forced to pay for what you do without.

It is inevitable these days that anything you buy that isn't food will come with the cashier's sales push for an "extended warranty." And at least with those marginal insurance policies you have the ability to just say no. Many other purchases -- large and small -- come bundled with either things you don't need or that force you to buy additional items.

Here are some frequent offenders:

Does anyone watch the Archery Channel?
A well-known and much despised aspect of cable television is that you end up paying for channels you may never watch. In fact, on most cable systems, sports channels such as ESPN account for 40% of programming fees -- bad news if you could care less about baseball or the Lumberjack Olympics.

In a study last year, the media and communications analysts at SNL Kagan found that fees paid for sports programing typically exceeded those charged to systems by more-watched networks such as Nickelodeon and USA. ESPN amounted to more than $4 of the average cable bill, compared with 8 cents for The Food Network and 21 cents for SyFy.

That matters a lot by the individual -- who might be a foodie or sci-fi fan who never watches sports -- or in the aggregate. For example: In the just-past low-sports week of May 30 to June 5, according to the site TV by the Numbers, among cable channels in prime-time hours ESPN was ranked 19th, immediately behind The Food Network (No. 17) and SyFy (No. 18). Is EPSN really worth 5,000% more than The Food Network month in and month out?

Plenty of people don't think so, but consumer calls for a la carte pricing have been rejected and dismissed by networks and cable companies.

The old-school business model could be disrupted as more and more people "cut the cable" and instead use Netflix (NFLX) or go online to stream Netflix or to such online-only services as Hulu and Apple (AAPL) TV for their favorite shows. This week, at the E3 conference, Microsoft (MSFT) announced plans to bring live television to the Xbox console.

Industry groups such as the Consumer Electronics Association, however, are not quite ready to concede much impact from those alternatives. A survey released May 31 of 1,256 adults found 76% of respondents said they were "unlikely or very unlikely" to cancel pay TV service; just 10% said they were likely to do so.

Further solidifying the current cable TV business model was an opinion issued June 3 by the U.S. Court of Appeals for the 9th Circuit in San Francisco. In the case of Brantley et al. V. NBC Universal Inc. et al. a three-judge panel ruled against the plaintiffs in the class-action suit and affirmed that "bundling" practices and requirements for "must-have channels" did not run afoul of anti-trust laws.

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