Cablevision (CVC) Takes 'Bundled'-Up Anger Out on Viacom (VIAB) in New Antitrust Suit

February 27, 2013 3:29 PM EST
As reported on Tuesday night, Cablevision is filing an antitrust lawsuit against Viacom (Nasdaq: VIAB) in an effort to change how cable networks are bundled. The practice in recent years has ballooned channel selections while pushing monthly bills sky high.

Content providers like Viacom, News Corp (Nasdaq: NWSA), Time Warner (NYSE: TWX), and others have long put together more networks with lower-rated offerings to promote new programming and boost overall revenue. The providers liken it to "volume discounting."

Cablevision is looking for those bundles to come apart and is receiving support from advocate groups nationwide. Cablevision said it was being forced to pay for the "lesser-watched ancillary networks" which were bundled with certain must-have stations from Viacom.

Providers will be facing a stiff challenge, too, as more and more content is being made available on-demand and over the Internet.

Comcast (Nasdaq: CMCSA) and DirecTV (Nasdaq: DTV) say programming rates are set to increase about 10 percent in 2013. The industry draws in about $170 billion in revenue annually, according to Bloomberg-compiled data.

But, the playing field might not be too level. Time Warner CFO John Martin recently commented that it doesn't force pay-TV providers to buy lower-rated networks in order to access popular channels. Martin said that about 86 percent of "our affiliate fees come from our top four networks."

Shares of Cablevision and Viacom are higher on the session Wednesday.

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