Well this is interesting: New York-based cable company Cablevision is suing cross-town content partner Viacom. The lawsuit is over Viacom’s requirement for Cablevision to carry a bunch of channels its users don’t watch, in order to have access to a bunch of channels they do.
The idea behind the lawsuit is basically that Viacom has eight core channels that Cablevision wishes to carry, but Viacom bundles in a bunch of channels that viewers don’t watch and its customers don’t care about. Even though those ancillary networks don’t actually have any viewership, Cablevision has to pay for them anyway. And that, in effect, drives up the cost of cable TV for everyone.
According to the press release — a redacted version of the lawsuit itself won’t be available until later — Cablevision is accusing Viacom of violating antitrust laws, by “illegally” forcing Cablevision to carry and pay for 14 low-rated ancillary networks. Those include channels that you’ve never heard of, like Centric, Logo, and Palladia, as well as some ham-handed add-ons attached to popular brands, like MTV Hits, MTV Tr3s (WTF?!?!), Nick Jr., Nicktoons, VH1 Classic, and VH1 Soul.
The lawsuit states:
“The manner in which Viacom sells its programming is illegal, anti-consumer, and wrong. Viacom effectively forces Cablevision’s customers to pay for and receive little-watched channels in order to get the channels they actually want. Viacom’s abuse of its market power is not only illegal, but also prevents Cablevision from delivering the programming that its customers want and that competes with Viacom’s less popular channels.”
Cablevision is claiming that Viacom “abused its market power over commercially critical networks” such as Nickelodeon, Comedy Central and MTV. And by doing so, the content company allegedly coerced Cablevision into taking an unfair deal by “threatening to impose massive financial penalties” if it didn’t agree. Like, making an offer Cablevision couldn’t refuse.
And here’s what Cablevision really wants: The lawsuit seeks to void its 2012 carriage agreement with Viacom. You know, the one that it signed under duress at the 11th hour to avoid a blackout of the networks. And the ability to renegotiate that deal under different terms, without having to carry stuff like MTV Tr3s. (Seriously, what is that?)
But more importantly, Cablevision is seeking a permanent injunction that would bar Viacom from requiring carriage of ancillary networks in order to also have MTV, Comedy Central, and the like. And this is where things get tricky. Because if the court rules in Cablevision’s favor, it will be setting a precedent not just for Viacom, but for any of the big media conglomerates that bundle their must-have programming with a bunch of crappy channels that no one watches.
If that happens, Disney will no longer be able to package “The Ocho” with regular ESPN, and Comcast won’t be able to make other cable companies carry NBC just to get USA Network or SyFy. (That’s a joke, guys!) And, the content guys will tell you, their business models will collapse, there will be pandemonium in the streets, cats and dogs will start living together, and Western Civilization will cease to exist as we know it.
Well lookit that! Viacom responded:
“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.”
Cablevision Systems Corporation is a telecommunications, media and entertainment company. Cablevision’s portfolio of operations includes a full suite of advanced digital television, voice and high-speed Internet services, publishing and interactive media, world-renowned entertainment showplaces, professional sports teams, and popular national and regional programming networks.
Viacom, short for “Video & Audio Communications”, is an American media conglomerate with various worldwide interests in cable and satellite television networks (MTV Networks and BET), and movie production and distribution with Paramount Motion Pictures Group. The new Viacom conglomerate was finalized in September of 2006 is considered to be the “high-growth” side of the much larger former Viacom. The former Viacom was renamed CBS Corporation, from which this firm was split off on December 31, 2005.