"The concept that the networks will lose viewers is pure bullshit, and the concept that they will lose revenue is ever-so-slightly processed bullshit. So back to your marketing department, ESPN; you'll just have to do better than that."
Except ESPN is a high-demand network. Otherwise, ABC would never have lost Monday Night Football. Say what you will about side sports when things get slow, but when the big sports come along, viewership is still high enough to draw ratings. Some channels you just cannot ignore if you're an advertiser.
As for the channel blocks, remember that this system is analogous to the typical newspaper or magazine: most people buy them just for a section or two, yet one has to buy the whole thing to read them (Otherwise, why aren't newspapers partitioned? It wouldn't be worth the money otherwise). The idea is that of the impulse attraction: you pass by it in your flipping, see something interesting, and stick around. Sure it doesn't work all the time, but like TV ads and crime, they only have to be lucky ONCE.