Well, this is certainly an interesting development in the disruption of cable TV. Cablevision has sued Viacom for “illegally forcing Cablevision to carry and pay for 14 lesser-watched ancillary networks its customers do not want.”
Interesting. Especially when you consider that Cablevision and Viacom signed the deal in December 2012. So what’s the implications of the lawsuit? Probably not a whole hell of a lot.
All that said, if the case does go all the way through the court system and ends up in Cablevision’s favor, then we might finally see real change in the pay-TV world: You could imagine a scenario where pay-TV providers and their customers end up paying Disney for ESPN, but not ESPN 2 or ESPN3. Or the Disney channel. Or where News Corp. (which owns this website) wouldn’t be able to require Fox News viewers to take the FX channel as well.
It’s also possible that, given all those choices, consumers might end up choosing the bundles anyway, since pay-TV buyers could experience sticker shock when they see the “real” price of unbundled programming. If ESPN is currently getting more than $5 per subscriber when it sells as part of Disney’s bundle, it’s going to have to charge a multiple of that in an on-demand world — or cut its programming costs way, way, way down.
And even that scenario will take years to play out. Which means that, in the meantime, anyone who’s looking to get into the pay-TV business right now — like, say, an Apple — is still going to have work with the bundle. That’s what Google has already worked out as it steps cautiously into the pay-TV world, and that’s what Intel is doing as it prepares its Web TV subscription service.
Here’s the thing though: If everyone buys ESPN and the demand is high then it can charge a reasonable price — perhaps $10 per month. Would people want to pay $XX a month for cable if they could mix and match channels like they do apps on an iPhone? I say yes. Maybe there are a few basic bundles each costing $10 per month, then a few channels you get for $2-$5 per month and a few you end up splurging on like HBO and ESPN.