In a statement, Viacom said, “Cablevision is crying foul over a standard business practice that expands choice and lowers cost for consumers — a practice they use extensively to sell their own services.”
Viacom and other media companies have argued that bundling allows creative minds to start new programming with less risk. The approach seeded channels such as the Food Network and Bravo, which eventually produced the “Real Housewives” series.
The offerings on television now seem endless. On average, consumers watch five to 10 channels regularly, said Jeffrey Kagan, an independent telecommunications analyst. But a cable service can easily pump more than 1,000 channels into the living room. Meanwhile, bills have tripled in cost over the past decade.
Streaming-video services offer more-limited programs at a lower cost and have a growing appeal for younger audiences. In the last three months of 2012, Netflix, the leading streaming-video provider, added 2 million subscribers, bringing its total to 27.5 million. Meanwhile, Comcast, the nation’s largest cable operator, saw the number of subscribers drop to 21.9 million at the end of 2012, compared with 22.3 million at the end of 2011.
Upstarts such as Aereo are offering live television through streaming Web connections. The practice has drawn the ire of companies such as News Corp., which owns Fox, and Walt Disney, which owns ABC. They and other media firms are suing the company in federal court, accusing it of copyright infringement.
Founded by IAC/InterActiveCorp founder Barry Diller, New York-based Aereo serves more than a dozen markets and won a first round of court battles.
“Aereo is very interesting and could be very disruptive because young people are not as wedded to the cable bundle and increasingly used to getting entertainment online,” said Andrew Schwartzman, a telecom media lawyer.
But Schwartzman cautioned that consumers should not expect cable companies to loosen their grip on their pay models too quickly. And traditional television, for now, still has appeal.
“Just watch, two weeks from now, when the NCAA tournament heats up . . . there will be another reminder of the pull traditional TV has and what a long way there is to go for changes in the industry,” he said.