In a deal that may signal the start of a new era of competition for entrenched cable and satellite providers, Viacom has tentatively agreed to let its popular cable channels — like Nickelodeon and MTV — be carried by an Internet TV service that Sony is creating.
The agreement is believed to be the first of its kind between a major programmer and any of the technology giants that are trying to disrupt traditional modes of TV delivery. If other programmers follow suit, Sony’s as-yet-unnamed service would let paying subscribers receive live cable channels the same way they use on-demand libraries like Netflix or Hulu. Intel and Google are working on similar services, but try to make it more user-friendly, perhaps the way Netflix does with personalization features and a fancy interface.
Another attempt to save a dying business model by forcing it to change. Sadly, it’s not likely to happen.
New York’s Cablevision filed an antitrust lawsuit on Tuesday alleging that Viacom has compelled it to pay for 14 cable networks it didn’t want, including CMT, MTV Hits, Nick Jr., Nicktoons, Palladia, and VH1 Classic.
If Cablevision is successful in its lawsuit—which remains under seal—it could significantly push forward an “à la carte” model for cable television.
The companies haven’t said much beyond their stinging public statements.
“The manner in which Viacom sells its programming is illegal, anti-consumer, and wrong,” says Cablevision in a statement (PDF). “Viacom effectively forces Cablevision’s customers to pay for and receive little-watched channels in order to get the channels they actually want. Viacom’s abuse of its market power is not only illegal, but also prevents Cablevision from delivering the programming that its customers want and that competes with Viacom’s less popular channels.”
Viacom, meanwhile, countered that such arrangements had been “upheld by a number of federal courts and on appeal,” adding that the company would “vigorously defend this transparent attempt by Cablevision to use the courts to renegotiate our existing two month old agreement.”
DirecTV Group’s 20 million U.S. subscribers are getting back their favorite shows after the satellite TV provider reached a deal to restore Viacom Inc.’s networks, but the size and scope of the high-profile dispute may have changed the nature of future programming battles.
The loss of 26 networks to 20 million homes for nine full days means the size, length and scope of this programming blackout was unprecedented to date in the U.S. pay-TV industry. Contentious relationships between program distributors and program makers are on the rise as the industry’s growth appears to have peaked.
“The Viacom/DirecTV dispute may be remembered as a critical turning point in programmer/distributor negotiations,” said Bernstein Research analyst Todd Juenger. “For the first time in memory, it was the distributor that won the public relations war.”
While distributors typically take the brunt of the complaints about network blackouts, DirecTV argued that the increasing number of disputes with other distributors had educated customers that they would face the same problems with their rivals.
“By showing their willingness to take a blackout, and arguably winning the battle for the hearts and minds of their customers as a result, DirecTV may extract better terms from other programmers down the road,” said Juenger.
YouTube may be liable for letting users post copyrighted material on its website, the 2nd Circuit ruled, reviving a suit by heavy-hitting media companies.
Under the “safe harbor” provision of the Digital Millennium Copyright Act (DMCA), liability hinges on a party’s knowledge or awareness of specific infringing activity.
The federal appeals court ruled last week that “a reasonable jury could find that YouTube had actual knowledge or awareness of specific infringing activity on its website.”
Viacom International and several other various film studios, television networks, music publishers and sports leagues had sued YouTube and its parent, Google, in 2007 for copyright infringement.
In August 2010, U.S. District Judge Louis Stanton granted summary judgment to YouTube and Google, finding that insufficient notice of the particular infringements entitled them to DMCA safe harbor protection.
The billion-dollar Viacom lawsuit against YouTube/Google trudges on. After a federal judge sided completely with YouTube in summary judgment, Viacom has now filed its appeal to take the case to the next level.
Judge Louis Stanton’s opinion on the case came out last month. The brief opinion agreed with YouTube that the company had a “safe harbor” against such lawsuits because the infringing video clips in question were uploaded by third parties. In the judge’s view, the DMCA takedown notification system was working just fine, and Viacom had no right to go further and seek money directly from YouTube.