Cable MSO Cablevision is suing Viacom over the number of channels Viacom requires Cablevision to carry in order to maintain supply. Cablevision says the way the channels are bundled is illegal. Time Warner and DirecTV are supporting Cablevision’s action.
Cablevision has launched its action in a Manhattan court arguing that some 14 of Viacom’s channels, including MTV’s Hits and CH-1’s Classic channels, are unwanted by Cablevision or by most of its viewers. However, the terms of the current Viacom/Cablevision contract, signed only two months ago, requires Cablevision to carry the services.
Cablevision wants that December 2012 agreement cancelled and is seeking the Court grant a permanent injunction barring Viacom from obliging cable networks to bundling all of its channels together without the ability to pick and choose those that the cable operator wishes to carry.
DirecTV, which has more than 20 million subscribers, said in its statement that “there’s no question that the current all-or-nothing system dictated by programmers is completely broken,” and called the bundling practice “shameful.”
“The US 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,” added Chad Gutstein, CEO at arts channel Ovation.
Additionally Cablevision is seeking treble damages and legal costs to be paid. Cablevision says it is happy to carry Viacom’s more popular channels, including MTV, VH-1, Nickelodeon, Spike and Comedy Central.
Viacom strongly defended its position, stating they were helping out cable MSO’s. “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.”