ESPN doesn’t like the idea of Americans getting cheap cable packages. It really doesn’t like the idea of these packages no including its premium sports channel. So the sports network has sued Verizon for alleged breach of contract. The lawsuit was filed in New York Supreme Court.
The dispute is over Verizon’s “skinny bundle” option, which gives consumers the ability to choose packages of cable channels which can be swapped in and out every 30 days. The bundles offer more flexibility than the standard cable bundle, which has a large number of preset channels.
ESPN’s lawsuit represents the opening salvo by content companies whose business models revolve around pricey cable packages. Both cable companies and content creators are dealing with a shift in viewing patterns as consumers increasingly opt to watch video online and on their own schedules.
Some viewers, known as cord-cutters since they’ve cut the cable TV part of their service, are forcing content companies to look at how they distribute their programming. Their also forcing cable companies to change how they’re selling packages of channels.
“ESPN is at the forefront of embracing innovative ways to deliver high-quality content and value to consumers on multiple platforms, but that must be done in compliance with our agreements,” said an ESPN spokeswoman in a rather disingenuous statement. “We simply ask that Verizon abide by the terms of our contracts.”
ESPN, owned by litigation-heavy Disney, stands to lose the most from the changing cable landscape. It commands the largest royalties of any core cable TV package, by some estimates over $20 per month per cable subscriber.
Verizon of course defended its new bundle strategy. “Consumers have spoken loud and clear that they want choice, and the industry should be focused on giving consumers what they want,” a company spokesman said in a statement. “We are well within our rights under our agreements to offer our customers these choices.”
The New York telecommunications giant has shown a willingness to explore different models as it deals with customers abandoning traditional pay-TV service in lieu of online options.
It’s likely this battle will be long and arduous given the stakes are basically life or death for the companies. It would not be surprising if more of this litigation crops up around the nation, especially as the cord cutting trend picks up steam.