Alex Wilhelm is a San Francisco-based writer. You can find Alex on Twitter, and on Facebook. You can reach Alex via email at [email protected] Alex Wilhelm is a San Francisco-based writer. You can find Alex on Twitter, and on Facebook. You can reach Alex via email at [email protected]
Cablevision has announced a lawsuit against Viacom, pitting the cable provider against the content company, alleging illegal antitrust infringements. The gist of the suit is that Cablevision is suing Viacom for, in its view, forcing it to carry fringe channels along with its more popular content.
Cablevision states in its release that it was “coerced” to do so at the threat of “massive financial penalties.” This leads to, Cablevision goes on to state, “[impaired] competition by making Cablevision pay for and carry networks that many subscribers do not want to watch.”
The suit, if it does eventually wind through the courts, and Cablevision wins, could lead to the unbundling of cable channels. This would be a tectonic shift in the economics of cable television, allowing for unprecedented consumer flexibility, and financial hardship at channels that simply can’t hack it on their own.
Viacom, however, sees the suit differently, calling it all but a cheap ploy to allow for a contract renegotiation. As quoted in AllThingsD, here’s Viacom’s response [Bolding: TNW]:
At the request of distributors, Viacom and other programmers have long offered discounts to those who agree to provide additional network distribution. Many distributors take advantage of these win-win and pro-consumer arrangements. Reflecting the highly competitive cable programming business, these arrangements have been upheld by a number of federal courts and on appeal. Viacom will vigorously defend this transparent attempt by Cablevision to use the courts to renegotiate our existing two month old agreement.
If Cablevision is in fact serious about the suit, or is instead merely hoping for a renegotiation of certain rates, will be spelled out by its actions in the coming weeks. It also could be simply looking for a way abrogate its contract and start fresh.
For the consumer with specific tastes, Cablevision could be setting the stage for a television reformation. Let’s hope this isn’t mere grandstanding. Do not get your hopes up too high, however, As Peter Kafka notes, “the suit [could] fit into a familiar pattern in the pay TV business, where programmers and pay TV providers joust with lawyers and via press releases before agreeing to keep the status quo.”
Top Image Credit: Leo-setä
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