Why Cable Has So Many TV Channels You Never Watch—Explained in 1 Lawsuit

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Have you ever fantasized about suing cable companies for over-charging you for hundreds, if not thousands, of channels that you don't watch? Then please direct your attention to a new lawsuit brought by Cablevision, a cable company, against Viacom, a media company that owns channels. 

Wait. A cable company is fighting on your behalf to shrink its channel offerings? We haven't gone through the looking glass. In fact, this is a crystal-clear lesson in who really wears the pants in the TV business.

When you get mad at cable companies, you are, somewhat literally, blaming the messenger. Cable companies are messengers. They build the infrastructure that transports channels to your television. To buy channels to carry, they make deals with media companies, like Time Warner and CBS. These companies own all the channels you want and all the channels you don't want. Viacom, for example, owns some networks I love (like Comedy Central) and some networks I've never seen (like Palladia, MTV Hits, and VH1 Classic ). When Cablevision signs on the dotted line, it has to carry all of them.

Cable companies can't shop the Viacom store like it's a Best Buy and pick whatever they want. The media companies tell the cable providers to buy and carry all of their channels or none of them. Is that fair, or unfair? I don't know. I just know that your cable menu is a thousand channels long, not because your cable company hates you, but because the companies who own the channels have incredible market power to force cable providers to buy everything they're selling.

Cablevision is claiming that Viacom "abused its market power" by forcing the cable company to buy and carry all of the channels, according to The Verge. Indeed, more than 90 percent of the shows Americans watch are owned by just seven media companies, like Time Warner, Disney, and Viacom. That sounds oligopolistic, but it will be up to a judge to determine whether it's really illegal.

Media companies like Viacom and Disney and Time Warner and CBS have pulled off an incredible trick. They've used their market power to force cable companies to carry all of their channels and avoided public criticism of bloated cable menus. Imagine if Coca Cola forced New York City bodegas to sell each Diet Coke shopper an additional Vitamin Water, Sprite, and Orange Fanta ... and New Yorkers responded by burning down the city's bodegas. That's what I mean by blaming the messenger.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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