The solution is simple and not one the content owners want; a la carte programming across the board.  The content owners force a bundle of channels on the cable/satellite providers and usually require those channels to be available to all consumers in the low-end tier.

Take ESPN for example, this channel is available to virtually every single subscriber.  Even if you do not watch it, you are $4.69 to have it and you have no choice but to receive it.  Take TNT, they get $1.16 per subscriber.  If a la carte was offered, the consumer could pick and choose what channels they wanted.  Don’t want ESPN, you can save nearly $5 per month.  Most likely, ESPN would raise their rates if enough people didn’t subscribe and then the sports fans would see it over $5 a month; the same would hold true for other channels.  A la carte would allow the cable/satellite companies to charge a customer fee and then just pass the programming costs directly onto the consumer.  So if the content owners wanted to raise the rates, they are free to do so at any time they want.  What they risk is that the consumer views their programming isn’t worth the price and drops it.  There are many channels that show large amount of paid for programming; the 30 to 60 minutes infomercials.  How many subscribers are going to pay for those?  Not many, so either a station is going to have to get better programming or offer their channel for free just to have viewership.  The content owners are the ones against the a la carte method as then they have a harder time making money.

"Content" in the abstract may be king, but 99% of all content is replaceable and interchangeable to some extent. Spongebob addicts are already moving on to other distractions. Content owners that overestimate their value usually find that their self-awarded crowns are made of base metal and paste.

So when a bunch of hotels get a lot of complaints from consumers, and they go back screaming to DirecTV -- from whom they are buying service - will DirecTV decide it's more important to keep its customers happy, even if it hits the bottom line?

I think this is a case of who blinks, the content owners or the distributors being asked to pay more.

The same battle is raging between pay TV providers and the broadcasters, who are asking for retransmission fees. Some small providers are getting totally squeezed by content costs - more than one smaller telco has abandoned IPTV because content costs were so high they can't make a profit.

Right now, the content owners think they are sitting pretty. Is Breaking Bad so important to its audience that they'll switch providers to see it? Or will they just watch something else?

Probably the only programming I would switch providers for is live sports.

I think content is king, actually. I'm sitting in a hotel room in NYC and not seeing about half the channels because of the DirecTV dispute. 

Weirdly, my first thought isn't about the channels or the content creators. I'm first upset with the hotel and the TV service. Why aren't they delivering me the service I was promised?

ph

Yep, seems like they're all shooting themselves in the foot if they make it normal to premier big shows like Breaking Bad via online stream.

Content Creators, Content Owners, Content Agregators and Content Distributors need to understand the new paradigm and embrace it, or be relegated to the scrap heap with the Dinosaur. Consumers are rapidly embracing new methods of consumption and will very easily "go around" attempts to draw more $$ from their wallets for non-differentiated services.  IP distribution is rapidly ruling the day and schedule based / distributor based programming will die even more swiftly if the ecosystem does not rapidly respond to the fact that the Customer is King.