A federal judge delivered an important ruling last week in Game Show Network’s (GSN) long-running suit against Cablevision, now owned by Altice USA.
The judge ruled that Cablevision violated its carriage contract with GSN when it moved the channel to a less popular programming tier in 2011, according to an order (PDF) before the FCC. The channel restructuring required subscribers to pay an extra fee to continue viewing the GSN channel, and GSN argued that the move unreasonably restrained its ability to compete fairly. Cablevision was ordered to pay a maximum forfeiture of $400,000 by FCC chief administrative law Judge Richard Sippel.
Cablevision, at the time controlled by the Dolan family, gave more favorable treatment to We TV, a channel with a similar women-focused target audience, Sippel wrote in the order. The $400,000 penalty is “a small portion” of the amount that Cablevision has procured as a result of its “discriminatory conduct”—an amount redacted from the filing.
According to the filing, in November 2010, GSN was distributed to about 73.5 million subscribers nationwide. On Feb. 1, 2011, the effective date of Cablevision’s channel retiering, GSN’s distribution dropped 96%.
“As a result of Cablevision’s discriminatory retiering conduct, GSN experienced a decline in the sought-after New York DMA of 60 percent in household viewership, as well as a decline of 80-90 percent decline in targeted female viewership,” the order states.
In addition to the $400,000 forfeiture, the order prohibits Cablevision from discriminating against GSN in the terms and condition of its video programming distribution.
“We respectfully disagree with the [judge]’s decision and fully intend to appeal,” Lisa Anselmo, senior vice president of communications for Altice, wrote in an email to FierceBroadcasting. Altice declined to provide details or indicate whether GSN received another benefit in the reorganized tiers that could have counteracted its loss of viewership.
Bloomberg reported that the ruling could affect other companies that are creating stronger links between video programming ownership and distribution.
“This could put some muscle behind the Davids of the world and make the Goliaths offer them some access,” said Jamie Court, president of Consumer Watchdog, a Santa Monica, California-based consumer advocacy group, in the Bloomberg article.
The ruling is noteworthy considering pay-TV companies are working to offer scaled-down packages of content offerings, generally by slicing and dicing available channel packages into smaller, more targeted bundles. Those in the media industry worry that these tactics will ultimately cut into the businesses of smaller, niche channels that might be unable to generate sufficient revenues without being bundled into a group of more popular channels.