Mario Gabelli: 'Unbundling Is Going To Be Engineered By Cable Companies'

With Apple Inc. AAPL rumored to be starting its own streaming service, the "unbundling" pressure on cable companies seems to have increased. Mario Gabelli, Gamco Investors Inc GBL founder, chairman and CEO, was on CNBC to share his thoughts on this and to discuss the battle among media companies for content and viewers.

Unbundling

"Bundles have to be broken down," Gabelli said.

"First the video content – video content says, ‘I can get 500 channels, but I got to pay X.' I don't want 500 channels."

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Pricing Based On Demand And Quality

He explained, "I have a house that I am paying $18 per month to get basic cable and that's the Cablevision. In addition to that, I am renting this set-top box, paying another $7. So I am paying $25."

He continued, "If I want to add services to that, I add it a la carte on my own initiative. So, the cable guys can do that. Efficiently, you put the bundle in.

"I hate sports and I don't want to pay ESPN. So, I will delete, why should I pay them $6 a month? So, that unbundling is going to be engineered by the cable companies when they are ready to do it."

On how content pricing must be, Gabelli remarked, "Sirius [Sirius XM Holdings Inc. SIRI] charges you $12, okay? Apple is going to charge you $X. Could they price it ‘on demand' based on the quality of their programming, and that's what people will pay for?"