It seems small beer when compared to the vast markets that Comcast addressed, but this week the relatively tiny Viamedia cable advertising sales specialist has filed a suit suggesting that Comcast is indulging in anti-trust, illegally pushing Viamedia out of part of what is just a $5 billion local US market.
The accusations come down to pretty much a single instance, when Viamedia was representing WideOpenWest and RCN in spot advertising sales, and Comcast deliberately blocked their involvement in a group deal.
This is a $5 billion market in a $70 billion US TV advertising market and relates to the handful of advertising slots that cable companies keep for themselves when they negotiate distribution agreements with advertising based TV channels.
Comcast’s Spotlight operation has slowly built up to a position where it puts lots of cable companies into a group – they don’t compete with one another – but cover the country better that way. By negotiating collective national and regional deals, but leaving Wide Open West and RCN out of advertising campaigns which Comcast controlled, Viamedia found itself ousted, and says that it lost $225 million of business and wants recompense. WOW and RCN instead booked up with Comcast Spotlight in specific markets in Chicago and Detroit, rather than miss out on the advertising that Comcast controlled. Viamedia naturally lost revenue.
This is very much a case of using monopoly power as a large cable company with a lot of sales clout, and in turn using that to get better ad rates, which in turn attracts other cable concerns. This happens in Europe quite a bit with majors like Sky and Canal+, and it always makes regulators a little nervous, and there is intervention from time to time.
Viamedia filed a suit this week in the Northern District of Illinois federal court accusing Comcast Spotlight, of shutting out rivals from ad clients it controls.
Already the Department of Justice has an ongoing investigation into Comcast, into this very practice, but the Viamedia complaint may well sit alone as a commercial anti-trust case without a regulator sponsor, and they often end up getting short shrift in US courts.
Comcast for its part says that MVPD advertising accounts for only 7% of local advertising sales, so cannot see how any anti-trust could possibly be involved. It also said that in the top 50 markets half of what it calls “interconnects” are not run by Comcast.” An interconnect is a collection of many zones, usually run by the largest MSO within a separate TV market, to speak directly to advertisers on how to reach a large swath of local cable households. If Comcast spotlight had included all the MSO in those markets where WOW and RCN plays, it would have been giving Viamedia revenue for nothing, and it is fairly common practice to squeeze out rivals in interconnects. That doesn’t make it right of course.