All numbers are made up but it works like this. Network XYZ has a very popular "channel" that everyone watches. They can get $5 per month for every subscriber the cable company has. Network XYZ has a not so popular "channel" that very few people watch. Network XYZ wants more people to watch this channel and have a larger reach for advertising money. They offer the cable company the popular channel for $4 per month/person as long as they also put on the less watched channel on the same tier for $.50 per sub.

Say this cable company has 10 million subscribers. This cable company can save $5 Million a year in costs by taking this deal.

Dont even get me started when the US Government tells a cable company that they MUST carry a specific regional sports channel (MASN) on a specific channel Tier and that channel will get $x.xx per subscriber. I can say that when this was done the cable company I work for increased everyone's bill by $x.xx the next month.
[Post edited by Virtual Hokie at 05/18/2016 1:22PM]