Cablevision Systems Corporation (CVC)’s Lawsuit Has Major Implications for TV: Viacom, Inc. (VIAB), DIRECTV (DTV)

Conversely, it could also end up harming Netflix and similar services. While Netflix currently offers quite the bargain, if cable providers can offer channels incrementally it may close the gap. That may be exactly what DIRECTV (NASDAQ:DTV), Cablevision and the rest are hoping for, giving them the opportunity to reach households that refuse to pay for bloated, expensive packages. While such a change would likely reduce revenue per customer, these firms could potentially benefit from a much larger customer base, particularly if consumers could pick and pay for just a handful of channels.

It also opens the door for premium channels to become much more accessible, potentially undercutting the draw of streaming services. For example, once cable packages are broken up, HBO becomes a very interesting standalone channel for Time Warner. A standalone, streaming HBO service could do serious damage to current streaming businesses. This already seems to be something Netflix CEO Reed Hastings is worried about: he’s gone on record to say his job is to turn Netflix into HBO before HBO can turn into Netflix.

In the end, a verdict in Cablevision’s favor has the potential to reshape the TV landscape. If it does, more than just consumers stand to benefit and it could serve as a major catalyst for all parties involved. The losers will likely be the weaker content developers and the winners will either own the best content or distribute it. It is definitely worth keeping an eye on for any investors in this space.

The article Cablevision’s Lawsuit Has Major Implications for TV originally appeared on Fool.com and is written by Chris Moore.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.