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A legal test of a viewer-unfriendly cable TV practice

March 01, 2013|DAVID LAZARUS
  • Cablevision is suing Viacom, it says, to look out for customers. That's true, to a point.
Cablevision is suing Viacom, it says, to look out for customers. That's… (Mark Lennihan, Associated…)

The cable company Cablevision says it's just looking out for consumers in its lawsuit against Viacom, owner of MTV and Nickelodeon, over bundled programming packages that drive monthly bills higher.

And the company is correct -- to a point.

Cablevision Systems Corp. alleges that Viacom Inc. is violating federal antitrust laws by requiring cable and satellite companies to carry less popular channels in return for paying a reasonable price for the good stuff. In other words, if a cable company wants Comedy Central at a fair price, it also has to take Teen Nick.

The lawsuit is a direct assault on an industry practice that forces the average cable or satellite subscriber to pay for dozens, possibly hundreds, of channels they may never watch. According to the ratings company Nielsen, the typical cable subscriber watches only about 17 channels on a regular basis.

"The manner in which Viacom sells its programming is illegal, anti-consumer and wrong," Cablevision said. "Viacom effectively forces Cablevision's customers to pay for and receive little-watched channels in order to get the channels they actually want."

For The Record
Los Angeles Times Wednesday, March 06, 2013 Home Edition Main News Part A Page 4 News Desk 1 inches; 40 words Type of Material: Correction
Cable TV bundling: A column in the March 1 Business section about cable TV business practices said that AMC Networks features about a dozen cable channels. In fact, AMC Networks owns and operates four channels, along with other media businesses.

Well, well, well. Sure sounds as if the nation's fifth-largest cable company, operating primarily on the East Coast, is saying the same thing I've been saying for years: Cable and satellite subscribers should pay only for the channels they want.

Or is it?

After the lawsuit was announced this week, I spoke with Charlie Schueler, Cablevision's executive vice president of communications. I asked what a legal win for the company would mean for Cablevision subscribers.

Would it mean lower bills? Would it mean so-called a la carte programming -- that is, allowing subscribers to pick their own channel lineup from a menu of options?

"Without forced bundling," Schueler said, "cable providers could tailor smaller and lower-priced pack- ages to specific audiences."

OK, but that basically means customers would still have to buy a package of channels, rather than pick the channels they want.

"We would offer more flexibility to customers," Schueler replied. "We would favor anything that offers broader choices and flexibility for customers."

But you're not saying the words. Will you offer a la carte programming?

"Choice and flexibility are the words I'll offer."

Cablevision's lawsuit against Viacom is a step in the right direction. Props to the company for trying to unravel the fat bundles that programmers such as Viacom, Fox and Disney force down the throats of distributors, which then pass them and the higher fees along to us.

If bundles do indeed violate antitrust law, all cable and satellite companies would be able to renegotiate their programming contracts to allow customers to pay for, say, Disney's ESPN and ditch the company's Military History channel.

But here's the thing about Cablevision's plan for smaller packages: You'd still have to pay for channels you may not want.

It's as if Hearst Magazines could make you buy Redbook if all you wanted was Road & Track.

Other cable and satellite companies have voiced support for Cablevision's legal broadside against Viacom.

"We frequently have pointed out that there are serious problems with the current programming environment," Time Warner Cable said. "We think this lawsuit raises important issues, and we look forward to their resolution in the courts."

Satellite provider DirecTV chimed in by saying its customers "have told us time and time again they don't want to pay for channels they don't watch."

But did either company say it favors taking things to their logical conclusion and offering a la carte programming? Nope.

They want to be able to claim they're helping customers while at the same time maintaining the higher revenue that comes with selling people stuff they'd rather not have.

The spat between Cablevision and Viacom is like a stegosaurus and a triceratops arguing over which is more responsible for their looming extinction. They're both missing the point.

For too long, the entire pay-TV industry has behaved in a blatantly anti-competitive, anti-consumer manner, saddling individual customers with hundreds of dollars in annual costs for unwanted products.

Cable and satellite companies will pocket an average $73.44 per household for video services this year, according to market researcher SNL Kagan. That's up nearly 11% since 2010.

Chances are, your paycheck hasn't gone up 11% over the last few years.

Meanwhile, cable and satellite companies aren't just conduits for other companies' channels. They're also major players in the programming game.

Time Warner Cable, for example, is partnering with the Dodgers for a baseball channel similar to its basketball channel jointly operated by the Lakers.

Comcast owns NBCUniversal and a slew of cable networks, including E!, USA, Syfy, MSNBC, CNBC and the Weather Channel. Cablevision's owners, the Dolan family, hold a controlling stake in AMC Networks, which features about a dozen cable channels.

So there's a very good reason Cablevision says it favors smaller, cheaper packages but won't take the plunge with a la carte.

They still want to make you pay for stuff you don't want. They just want it to be their stuff.

David Lazarus' column runs Tuesdays and Fridays. he also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to

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