Cable MSO Time Warner Cable and DirecTV, the #1 satellite TV company in the nation, have voiced their support for Cablevision’s lawsuit against Viacom. Cablevision alleges that the content provider’s “bundling” requirement is a violation of anti-trust regulations and is unfair not just to the pay TV providers, but to consumers who don’t want to pay for channels they will never watch.
Viacom owns some of the most popular channels on cable TV, which includes MTV, VH1, Comedy Central, and Nickelodeon. According to the lawsuit, Viacom forces distributors to accept low rated channels as part of the price of carrying the more popular channels. This practice is known as “bundling” in the industry, which is usually standard operating procedure for large content distributors who own the most sought-after channels. However, Viacom is seen as the most egregious “bundler”, which is why the company was singled out in Cablevision’s lawsuit.
Bundling wasn’t too much of a problem before until broadcasters started asking higher fees, especially for sports networks. The majority of pay TV providers lost customers in the last quarter, because of rising monthly bills and stiff competition from video streaming services such as Hulu, Netflix, and Amazon Prime.
DirecTV released a supportive official statement, saying that “there’s no question that the current all-or-nothing system dictated by programmers is completely broken,” and added that the practice of bundling is “shameful.”
Time Warner Cable noted that the Cablevision lawsuit “raises important issues, and we look forward to their resolution in the courts.”
Smaller programmers are applauding Cablevision’s lawsuit, since they are often the first to be eliminated from distribution, as they don’t have the leverage large content providers do. Independent programmers are also feeling the pinch in pay TV cost cutting, since the practice of bundling forces cable and satellite providers to carry low rated networks for the privilege of carrying the higher rated networks. Because the bundling leaves no room for pay TV distributors to drop law rated channels owned by large programmers, that leaves smaller content providers vulnerable to elimination.
Recently, the Ovation Network was dropped by Time Warner Cable, because the cable MSO was looking to cut costs by dropping channels unbundled low rated channels. “The U.S. TV market is not a free market and we support Cablevision’s effort to draw attention to the anti-competitive practices that keep independent networks like Ovation from competing on a level playing field,” stated Chad Gutstein, COO of Ovation.
Brad Siegel, vice chairman of GMC TV added, “The aggressive stance taken by large media conglomerates leaves less room and money to go around for independent, vibrant programmers that serve smaller, but passionate audiences.”
Either way, pay TV providers and consumers alike share common ground with Cablevision’s lawsuit. Hopefully, the judge and jury will do what’s right—and that’s to uphold the right to only pay for what you want.