The world of multi-hundred cable channel bundles is deceptively simple if you’re a customer. Pay $XX/month and get a unified access to a very large number of channels.

Some channels are more “successful” in that their shows attract more awards, online buzz, cross-sell merchandise, higher salaries for their cast & crew when they are invited to other productions etc. Some shows have a much higher investment from the production studios.

The channels are sold to the cable networks in bundles – such as, for example, a 24-channel bundle from Viacom. Some bundles have a few very strong channels and a lot of fillers. Some bundles have a more even distribution of their quality.

At the end, it’s a leverage battle between cable networks that aggregate the disparate bundles into their own mega-bundles and the production companies behind each bundle.

Those $XX/month get distributed between the different bundle providers based on whatever terms the sides agreed on. Companies that provide stronger bundles will feel that they have more leverage to negotiate a bigger slice of that $XX/month for them. On the other hand, they wouldn’t want to see their current slice becoming smaller when their bundle is having an off season.

So when one bundle provider uses its leverage to negotiate a bigger slice of the pie, the cable network can agree fully, negotiate or refuse. And here you suddenly have many more players involved, each with its own leverage.

If you (as the cable network) agree to give a bigger slice of the pie, there’s less of the pie left to everybody else including yourself. It either eats into your own margins, or gets deducted from somebody else’s slice – which they won’t be happy with. Or you can increase the pie by increasing the monthly subscription fee – which your customers won’t be happy with. And even if the cable network takes that money out of its own margin, there’s blood in the water. All the other bundle providers see that there’s an extra money to be made, if only they apply their leverage. And you can’t keep these things secret.

So what we are seeing now is just a game of leverage. Viacom feels that their bundle is such a strong offering that they can demand a bigger slice of the pie, or the same size of a bigger pie. DirecTV is using their own leverage of access to the actual paying consumers. Each side is using an arsenal of tricks to portray itself as the “good guys” and inviting the public to apply pressure on the other, “inflexible” side that is withholding the content from the paying consumer.

It’s the 2010 battle of Time Warner vs. Fox all over again. At that time Fox had wanted a $1/customer/month more from each of the $15M Time Warner subscribers. As the time for Sugar Bowl got closer, the sides agreed to the rumored 50-cent increase in Fox’s slice. It’s the more recent disagreement between Dish and AMC, where even the season premiere of “Breaking Bad” was not enough leverage for AMC to get access to Dish’s $14M customer base.