Could cable case increase bundling’s appeal?
It can be the bane of many cable subscribers: to get channels they want, they must pay for channels they don’t want. This business model of bundling channels has worked well for the cable industry, which save for select premium offerings, rarely allows for singe choices. But as more television shows become available on the internet and new technologies such as Apple TV emerge won’t consumers prefer to create a la carte picks for their viewing pleasure? Without a reading on the attached antitrust aspects, could bundled services go the way of the tube radio or might this approach spread to other businesses?
The Ninth Circuit Court of Appeals has offered some answers when it left standing a lower court’s dismissal of a lawsuit that contended that NBC Universal, Fox and other TV programmers employ their market power to force consumers to accept bundled packages of channels.
Now that the appellate judges have sided with a dozen media giants in this class-action suit — which sought to bar the practice of bundling multiple channels — are the doors open for other media to take up this revenue model? Rather than selling a TV show episode by episode, as occurs now, could internet vendors bundle their offerings for higher prices, to give more prominence to lesser known shows and capitalize on popular streams?
Possibly. The courts have tussled for a time now with cable bundling litigaiton in various states but the appellate judges in this latest instance observed: “Tying arrangements, without more, do not necessarily threaten an injury to competition…plaintiffs must also allege facts showing that an injury to competition flows from these tying arrangements.”