for the more popular networks to subsidize the less popular channels
No, it allows them to "compete" by claiming to offer more channels and to make more profit. E.g. justification of prices for Sky UK priciing and bundles.
In days of Analogue Access cards they only could do bundles. Now though the card can have any mix of channels, Satellite and Cable operators deliberately have bundles because it's more profitable.
Pay TV is stunningly bad value in UK and Ireland since over 96% of what Irish & UK Pay TV subscribers watch (based on time watching) is Free Channels. That's not even counting content that was Free To Air repeated on Animal Planet, Gold / Dave etc.
See BARB (UK) and Nielsen (Ireland Figures). USA is different.
Of course compared to 1980s there is far too much mediocre USA content in Europe and BBC/ITV/RTE too much soaps/RealityTV/Xfactor style etc garbage.
Multichannel is killing decent TV content. Too much fragmentation.
Also BBC & RTE too much enamoured with delivery, web content, digital (esp DAB), twitter etc rather than actually making content to broadcast and doing Journalism.
Traditional Broadcasters risk becoming irrelevant and wiped out by Netflix, iTunes, YouTube etc if they do not concentrate on producing quality content themselves and their own journalism. They can't compete in the future and have a reputation simply commissioning and buying it in.