You're missing the point.
Sure, most of us only watch 10 channels or so. The salient point is WHICH 10 do you watch?
Like I said, I'm Discovery, History, TLC, Science, Food, Outdoor, etc.
My kids are Disney, Nick, MTV...
My mother like the freaking shopping channels, gardening and crafts
My dad does golf and other sports, Military, etc
Lots of guys LOVE their sports channels
Lots of girls dig Bravo and E
The fact that they're all available on the cable/sat pipe lets us each choose our own favorite "playlists" so to speak, and watch the channels we like.
If providers were forced to pick the ten that everybody had to watch, they'd do it by market share (advertising dollars) alone. ESPN would definitely be one of them. (I HATE EPSN.) CNN, probably. Food? maybe. The Science or Military channels probably wouldn't make the cut, though, nor HGTV.
We're not paying to watch something/anything. In essence, we're paying for the opportunity to find what we want to watch out of everything available.
You're wrong about the bandwidth thing, too. The FCC carefully assigns stations frequencies so that two stations on the same frequency won't interfere with each other. If there were only one market, you could use the whole spectrum, but there are lots of markets with lots of overlap. That means city A can't use channel 15 for ESPN because city B 50 miles away is already using 15 for NBC. Spread that concept out across a flat map and each market realistically has 15 or 20 usable frequencies that would not be in danger of being drowned out by their neighbors. (Sure, sure, very directional antennas and rotors would help this, but then you're getting into the $500+ range for the setup and that's out of bounds for a lot of people. Not to mention that such an expensive system would then become the minimum system required for all people wanting any OTA signal - the extra expense would be required not to get additional channels as now, but to exclude all the noise from the neighbors so you could get anything at all.
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