Cablevision Lawsuit Won't Bring More Than Pyrrhic Victory
So, Cablevision is the people’s cable company, now? It’s fighting for every citizen irate about rising cable bills. It’s standing up to Viacom and saying: “Stop gouging us. You’re giving us no choice, but to take advantage of hard-working Americans – it breaks our heart.”
On paper, Cablevision’s lawsuit charging Viacom with anti-trust violations seems noble. It alleges Viacom won’t let it offer Jon Stewart, “Hot in Cleveland,” MTV and Nickelodeon unless it pays to carry a bundle of other channels few people watch.
Such practice, it says, forces it to pass along the costs to consumers. Further, if it could save the money and shelf space, it could deliver more desirable programming.
With all its profits, it’s easy to mock Cablevision for essentially crying poor and suggesting it wouldn’t pocket cost savings, but use them to put on more networks to “differentiate its services.” The company isn't know to jump at the chance to expand its line-up. Just ask the NFL.
Media companies say they don’t bundle programming as Cablevision alleges. They argue they simply offer discount opportunities in exchange for carrying more networks. Viacom says federal courts have OK’d these types of deals.
But Cablevision may well prevail. The legal process can surely unearth plenty of emails and internal communications between Viacom executives heping artful lawyers make a case.
Still, how much will Cablevision gain from a victory? Its content costs -- its main frustration -- aren’t going to go down. Assume a jury finds Viacom is forcing Cablevision to offer CMT and Nicktoons in order to get rights to flagship networks. Viacom is going to charge more for MTV, TV Land and the six other “core” networks Cablevision wants.
It’s the same argument that permeates the a la carte movement, which sounds so enticing to cable operators and consumers. Believing they'd save money, distributors would like to offer a package with the broadcast networks, ESPN, CNN and maybe a small group of other channels. And consumers dream about one. But the overall costs in the end to both constituencies aren’t likely to go down.
Also, how much do consumers who think they want it, really do? Time Warner Cable (TWC) has offered a slimmed-down, cheaper package tabbed TV Essentials. But as of mid-2012, it had 11,000 takers out of a base of 12 million-plus.
ESPN and Fox News might take credit for the low uptake with neither part of the package. (Actually, while TWC made a big deal about offering the package to help the economically disadvantaged, it hasn’t marketed it much – if at all.)
But here’s the main reason why Cablevision may be wasting its money on legal fees: people love the remote control. Operators need all those barely watched channels simply to fill the dial, so consumers can blow off energy moving the arrows up and down and screaming about nothing being on. The remote control brings power and power needs subjects to rule over.
Narrower packages with 10 fewer Viacom channels seem enticing until the clicking has limits. And, of course, when the bill arrives and the prices somehow, someway still haven't gone down.