The ongoing war between cable companies and media companies has finally spilled over into a court challenge between Cablevision and Viacom over an industry practice called “bundling”.
The suit, filed in New York, alleges that Viacom forcing cable companies to buy less popular channels, like Palladia and MTV Hits to get the more popular ones like Comedy Central and Nickelodeon. Those costs are then passed along to consumers, whether they like those channels or not. Cablevision is alleging the practice is illegal.
Viacom says its practices are legal and that cable and satellite companies carrying all their channels get a discount for carrying the less popular stations. Federal courts have tended to side with the media companies in the past.
If the court did side with Cablevision it would turn the media industry upside down. None of the media companies would be able to bundle the crappy stations no one wants with the more popular programming channels. What the courts might not like are all the media companies playing the same game, effectively operating as a cartel instead of an open entertainment market. Media companies have also gotten silly with the number of ancillary networks cable companies have to carry to get discounts, with some requiring carriers to load up with as many as 14 lumps of coal in exchange for one or two diamonds.
Either way it’s in the legal hands of the federal court in Manhattan to sort out.