The pay-TV monolith continues to crack from the inside. On Tuesday, Cablevision filed suit in federal court in Manhattan against Viacom, charging the owner of MTV and other networks with antitrust violations for forcing the cable operator to carry “lesser-watched” channels as a condition of licensing Viacom’s most popular networks. Cablevision is asking the court to void the contract it signed with Viacom in December, claiming Viacom had “coerced” it “by threatening to impose massive financial penalties unless Cablevision complied with Viacom’s demands.”
On Wednesday, Time Warner Cable and DirecTV jumped into the fray, issuing statements in support of Cablevision. “[T]here’s no question that the current all-or-nothing system dictated by programmers is completely broken,” DirecTV said. Time Warner Cable said the lawsuit, ”raises important issues, and we look forward to their resolution in the courts.”
Some smaller cable networks, also voiced support. “The U.S. 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,” Ovation COO Chad Gutstein said.
Cablevision likely faces an uphill fight. Last year, the Ninth Circuit Court of Appeals upheld a lower court ruling dismissing similar charges brought in a class action suit by a group of consumers. Ironically, DirecTV was one of the named defendants in that case.
Even if Cablevision loses, however, the lawsuit is further evidence of the stresses building up along the fault line between pay-TV networks and service providers. When that stress is finally released, it’s likely to produce a temblor.