Media giants score legal victory against foes of bundling channels
Don't look for your cable company to let you pick what channels you want to get anytime soon.
A panel of judges for the U.S. 9th Circuit Court of Appeals in San Francisco sided with a dozen media giants including News Corp., Time Warner, DirecTV and Comcast in a class-action suit that was looking to do away with the practice of bundling multiple channels together and selling them as a package, a long-standing industry tradition.
Bundling is when programmers sells their channels in bulk to distributors. For example, Walt Disney Co.'s ESPN typically cuts deals with cable and satellite distributors for multiple channels. The distributor then sells the bundle as part of a package to consumers.
Many media watchdogs argue that bundling allows big media companies to get distribution for less popular channels in return for carrying the popular channels. A distributor can pay to carry just ESPN and none of its spinoffs. However, the cost is usually higher than if the distributor agrees to carry several ESPN channels. The consumer who might only want ESPN must pay to get the extra ESPN channels too.
In affirming a U.S. District Court ruling in California, the 9th Circuit panel said that bundling is not a violation of antitrust laws. The plaintiffs -- a group of cable and satellite television subscribers -- argued that programmers abused their market power and harmed competition by requiring distributors to sell channels in prepackaged tiers rather than on an individual, or a la carte, basis.
The attorney for the plaintiffs, Maxwell Blecher of the Los Angeles law firm Blecher & Collins, said he will either seek a hearing in front of the full 9th Circuit or appeal to the Supreme Court.
-- Joe Flint