Cablevision Files Antitrust Suit Against Viacom For Forced Bundling Of Crappy TV Channels

from the when-big-companies-fight dept

Tue, Feb 26th 2013 3:31pm — Mike Masnick

For many, many years there have been disputes between cable TV providers and the TV companies over what channels the cable (and satellite) guys need to provide. The TV companies often "bundle" smaller channels that don't get many viewers along with the popular "must have" channels. Part of their argument is that this allows those smaller channels to exist in the first place, as they'd be economically nonviable without the subsidy from the super popular channels. Of course, the cable/satellite providers (and many consumers) argue that this is waste, pure and simple, and it means higher bills. It appears that Cablevision is finally trying to do something about this, and has filed an antitrust lawsuit against Viacom for forcing it to carry the channels it doesn't like, specifically channels like Palladia, MTV Hits and VH1 Classic. Cablevision has to carry those if it wants the channels that people actually watch, like MTV, Comedy Central and Nickelodeon.

Oddly, we can't show you the full lawsuit, because it's been filed under seal. You see that sometimes when it involves contractual disputes, since the terms in the contract are secret. However, it's rather unfortunate that they couldn't file the document with the secret stuff redacted. At this time, we just have Cablevision's side of the story via their press announcement. The key argument is that this is an illegal "tying" arrangement. Of course, just last year we had a ruling in a similar lawsuit, in which cable customers filed a similar suit, which flopped in court.

Cablevision may have a difficult time making this claim succeed as well. As Viacom quickly pointed out in response, the bundling is not "forced." Pay TV companies can choose individual channels without other channels, it's just that the price is higher. So, they argue, the bundling actually leads to discounts. Whether or not anyone actually believes that claim may become a key question in the lawsuit. If I had to do an initial handicapping, though, I'd guess that Viacom wins this one, even if Cablevision can make Viacom (and others) sweat for a bit. In the long run, however, this is still about fighting the last battle. The idea of TV channels is an increasingly obsolete concept. This fight is over the way video content was distributed. Not the way it will be distributed in the future.

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Filed Under: antitrust, bundling, cable channels, tying
Companies: cablevision, viacom

25 Comments

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Rikuo (profile), 26 Feb 2013 @ 3:39pm

Glad I avoided this problem entirely. I don't subscribe to any broadcast TV. I get my shows through the Internet or on optical disc.
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Anonymous Coward, 26 Feb 2013 @ 3:47pm

This fight is over the way video content was distributed. Not the way it will be distributed in the future.

Nonsense. It's a fight about how content is currently distributed. How many million subscribers are there? Why ignore reality, Mike?
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sehlat (profile), 26 Feb 2013 @ 4:01pm

Customers Can Always Walk
Back in 1992, my cable company offered me this wonderful five channel deal for $30/month. The SciFi Channel (which is the one I wanted to watch) and four channels whose names I have mercifully forgotten. When I asked about getting the one channel I wanted, I was snottily informed I had to take the bundle or nothing.

I chose nothing, canceled my account with them, and haven't gone back. Not to them, or any other source with the power to try and force content down my throat against my will. When I want to watch a movie, my brother gets it via Netflix and DVD.

It's entirely possible that Cablevision filed the suit because their customer base may well have started doing as I have done. Unless strangled by a bought government, where no competition exists in the commercial arena, it WILL arise.
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Anonymous Coward, 26 Feb 2013 @ 4:13pm

they'd be economically nonviable without the subsidy from the super popular channels

Then maybe they shouldn't, um, exist in the first place?

Or is there something super-obvious I'm missing here?
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Anonymous Coward, 26 Feb 2013 @ 4:24pm

Re:
I'm sure they are giving the jobs, competition, diversity arguement.

In my opinion the only real subsidies that should be handed out should go do stimulate decent competition or things that are necessary (agriculture comes to mind).
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Anonymous Coward, 26 Feb 2013 @ 4:34pm

If the FCC ever gets that high speed WIFI thing going I won't need cable.
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Not That Chris (profile), 26 Feb 2013 @ 4:37pm

Sadly...
Given the tripe that passes for programming MTV, I actually prefer MTV Hits (which *gasp* plays music videos most of the time) and VH1 Classic (because I have a minor addiction to old episodes of Pop-Up Video) to MTV or even MTV2, the channel created to play videos 24/7 when MTV gave it up...that turned into MTV Jr.
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Zos (profile), 26 Feb 2013 @ 4:53pm

Re:
lol. keep telling yourself that. Just because some elderly alzheimers patients are still paying aol bills doesn't mean it's a viable business plan anymore.
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Corwin (profile), 26 Feb 2013 @ 4:55pm

Re: Re:
There are a lot of reasons why agriculture is subsidized; none of them are good.

I'm going to go seek for a blog on that subject, hopefully I'll find one as interesting as TechDirt.
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Anonymous Coward, 26 Feb 2013 @ 5:06pm

Re: Re:
Yeah, a hundred million subscribers and a hundred billion in revenue is nothing.
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Anonymous Coward, 26 Feb 2013 @ 5:25pm

Re: Re: Re:
And what happens when the AOL subscriber base of "people who don't know what AOL is" dries up?
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Anonymous Coward, 26 Feb 2013 @ 5:36pm

Re: Re: Re:
"a hundred billion in revenue"

more like two billion but who's counting. Down from $4 billion in 2008. EBITDA margins have been cut in half over the same period.

pretty good trajectory
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Jake, 26 Feb 2013 @ 6:09pm

Oi! I used to like VH1 Classic. It actually played music instead of crappy celebrity gossip and reality shows.
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Jay (profile), 26 Feb 2013 @ 6:12pm

Elephant in the room
Still waiting for the people in TV broadcasting to figure out that YouTube content is growing and disrupting their business models left and right...
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Anonymous Coward, 26 Feb 2013 @ 7:02pm

Re: Re: Re: Re:
I'm talking about cable/satellite subscribers. Mike claimed that TV channels were a thing of the past. They are very much a present thing and will continue to be so for quite some time. In Mike's mind, the internet has already taken over all old media. In reality, that's not the case at all. Mike's just impatient, I'm gathering.
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Anonymous Coward, 26 Feb 2013 @ 7:26pm

Re: Re: Re: Re: Re:
TV channels? No. TV shows? Yes. This is the picking and choosing that cable fears and abuses most with their "carry this package of one strong channel and weak others" type thinking.

I detest Fox and their backward thinking (can't FF thru ads OnDemand - which I fecking pay for, btw - amongst other anti-viewer crap). But I love Justified on FX.

I only know of the channel because that's how it's set up to find these shows. Otherwise, I could give a damn. Advertise it and show me where to find it, who cares what "channel", means nothing.
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Anonymous Coward, 26 Feb 2013 @ 7:26pm

Well, seems more and more are getting the idea and joining the bandwagon as the economic times tighten. I guess it was 10 years ago when I cut the cable and today I don't own a TV. Nor do I want one.

I've had it with crappy programming, humor dumbed down to the lowest common denominator (you know it's bad when they have to use canned laughter to tell you where the punch like is), programming that serves merely as a vehicle to give you commercials (that I absolutely hate), and get you to pay for it on top of that.

Honestly I've been without one by choice for so long, there's nothing to miss on the tv. With the net if there is something I wish to see, it's readily available, within the time frame I wish, and I can find it without commercials.

Maybe mainstream hasn't caught up to that yet, hey I'm good with that, but sooner or later, it's coming.
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Anonymous Coward, 26 Feb 2013 @ 7:28pm

Re:
"If the FCC ever gets that high"...lulz!

We'd get everything that makes sense, probably.
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Anonymous Coward, 26 Feb 2013 @ 9:05pm

Youtube gives me most of the programming I want to watch. I don't really bother with television anymore. I watch Crash Course for fun educational programming, tons of lets play's and DBZ Abridged for comedic programming, Bravest Warriors for a nice new cartoon, tons of origional and remixed music, all for free on youtube. For the rare other times when that isn't enough, I sit down for some classics from my earlier years like Danny Phantom on Netflix.

What I like most about Youtube content is that it is not victem to the timeslot wars that TV stations go through. Most of my favourite shows from the past few years have been cancelled after only a season or two, because they were underpromoted by the parent station and were given timeslots that competed against far more popular programs that have been repeating themselves ever since the third episode...

We are to late to save the likes of Firefly, or The Cape, or Loonatics Unleashed, but a new future is dawning, and only we can make it better.
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special-interesting (profile), 26 Feb 2013 @ 11:44pm

For the Bundling of channels I wonder if this is not a 'middleman of culture' type of thing.

My middlemen of culture post (quite acidic): http://www.techdirt.com/blog/innovation/articles/20130224/22344422088/why-does-entertainment-industr y-insist-that-it-can-veto-any-innovation-it-doesnt-like.shtml#c795

Cutting the (cable) cord is becoming a popular option as the Internet enters mainstream use. (comment #2) I think both of you can be correct at the same time) current cable use still makes cramcast (and the like) a lot of money but its good they offer Internet connections for future business viability. It would be wise if the bandwidth and band-volume (download volume. Nice to separate that isn't it?) increased but I suspect overt manipulation of band-volume to force one side or the other.

Want to say smart TV channels will adapt but because of the band-volume limits will (for now) want to put up an antenna for local content. Cable has always been a false promise to me (they said there would be no commercials. Hahaha) Although I do miss MythBusters.

Firefly was a loss... and wow does TV/Cable programming battles for time slots constituent shooting themselves in the figurative foot(s)? (thanks #19)

For my part... Go, GO Cablevision. Yayyyyy. (waves 'individual choice' flags)
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Ninja (profile), 27 Feb 2013 @ 3:13am

Cable needs to reinvent itself. Or it'll die.

I think in the future you'll have only on demand content with a few advertisements along via your internet connection. How the current cable tvs will deal with it to survive is to be seen.
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Zos (profile), 27 Feb 2013 @ 5:22am

Re: Re: Re: Re: Re: Re:
i understand they still have AM radio stations too. how much relevance do they have these day?
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Anonymous Coward, 27 Feb 2013 @ 6:26am

Re: Re: Re: Re: Re: Re: Re:
Well, it would really suck if I couldn't listen to my free OTA baseball games on AM radio (what with opening day just weeks away).
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Zos (profile), 27 Feb 2013 @ 7:59am

Re: Re: Re: Re: Re: Re: Re: Re:
i'm sure you could find a stream of them somewhere.
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bjimba, 27 Feb 2013 @ 7:40pm

I'm a real nowhere man
Every blog post I've seen on this subject says at some point that no one watches Palladia. I do. In fact, nowadays it is probably the only channel I watch with any regularity. Hey, everybody who watched MTV or VH1 when they were music channels? That's Palladia now.
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