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TWC, CBS End Their Feud

More than a month after it began, the feud between Time Warner Cable Inc. and CBS Corp. is finally over. (See Time Warner Cable Sacks CBS.)

Both companies announced on Sunday that CBS programming would return to the Time Warner channel line-up as of 6.00 p.m. that evening. The timing means that Time Warner subscribers will have CBS access in time for the start of the National Football League regular season, and the new fall line-up of television shows.

Since early August, Time Warner subscribers in major media markets have been without CBS channels due to a dispute over content licensing fees. Time Warner was reportedly paying CBS less than $1 per subscriber before its latest contract expired, but the broadcast network was looking for a major raise before signing the dotted line on a contract renewal. (See TWC, CBS Fan Retransmission Flames.)

The cable provider balked at CBS's demands and subscribers lost access to the network's stations when both companies couldn't agree to terms.

The retransmission fight highlights growing tension between programmers and pay-TV operators as they try to navigate around new competition and new technology threats. (See Time Warner Cable Sacks CBS.)

As part of its ongoing battle against rising content costs, Time Warner Cable has asked the government to step in with measures to prevent broadcasters from threatening station blackouts during content licensing negotiations. In a corporate blog post published after the latest agreement with CBS, the company referenced efforts to get "Congress and the Federal Communications Commission to reassess the 21-year-old rules that allow this sort of broadcaster brinksmanship to happen in the first place."

Meanwhile, Time Warner offered its customers a taste of old-school technology while the blackout was underway. In a promotion designed to placate unhappy customers, the cable company made a gift of free TV antennas to enable traditional over-the-air television viewing. (See Free TV Antennas, Anyone?)

Presumably that gift is back in the box now that CBS is back on the air.

— Mari Silbey, special to Light Reading Cable

albreznick 9/6/2013 | 5:40:47 PM
Re: Settlement Yes, Phil. I agree. Disney and Fox will likely go through the same tortuous negotiations with cable networks, just as CBS just did. the Comcast/NBC Universal talks are likely to be somewhat different, I would think, although I'm not sure if they will be more or less contentious. They could actually be worse because the feds will be watching carefully. In that case, the cable club could find itself a bit torn apart. Will certainly be intersting to watch.  
Phil_Britt 9/4/2013 | 12:10:01 PM
Settlement The settlement prior to the NFL season is no surprise, though a similar dispute between Cablevision and Fox a couple of years ago did cost some NFL fans in some markets to miss out on some games -- at home -- though I'm sure there was a significant increase in business at some of the local sports pubs and restaurants.

The whole business model could be up in the air if Google bids for NFL Sunday ticket, as some speculate. It would also be interesting to know how long this would have dragged out if not for the NFL. Doubt that CBS and Showtime programming would have been enough to seal the deal.

Expect Fox and Disney/ABC to go through similar negotiations with next contracts. It will be interesting to see how Comcast/NBC Universal handle negotiations with other cable networks.
albreznick 9/3/2013 | 2:56:51 PM
Re: Poof I truly doubt the price was worth it. And i can't believe TWC actually started offering free OTA antennas to disgruntled subs. Sheesh. Wonder how many they ended up giving away?  
KBode 9/3/2013 | 2:50:33 PM
Re: Poof I think it's just stubborness. They've been a little tougher in these negotiations than other cable companies, and I think the company (personal opinion from years of writing about them) has a certain bunker mentality and tone deafness when you're talking about the real world versus the meeting room. As a result they tend to care less about public perception than say, a company like Comcast.

Again I'd have to see the hard numbers, but yes what did they really get here? Was a slightly lower price hike worth all of the bad press and customer defections?
albreznick 9/3/2013 | 2:44:11 PM
Re: Poof Yup, I'd have to agree with that. The distrinbutors usually come out looking worse, no matter how worthy their argumrnts might be. That's part of why I'm amazed that TWC held out on CBS for so long. I just don't see what TWC had to gain from that strategy, maybe a few cents per sub per month? Am I missing something here?   
KBode 9/3/2013 | 2:40:21 PM
Re: Poof We'll have to wait and see if anybody leaks the real numbers. I usually don't agree with Craig Moffett on much of anything, but I thought his quote today was spot on, in that Time Warner Cable is really the big loser either way:

"CBS is the winner. Content owners always win these negotiations, it's just a matter of how much they won," said cable and telecommunications analyst Craig Moffett of Moffett Research.

"They have all the leverage. Consumers don't get mad and trade in their channel when these fights drag on. They go looking for a different satellite or telephone company."

We will have to wait and see just how much this hurt Time Warner Cable in terms of subscriber shifts to competitors. Verizon insiders stated they were seeing 5-15% subscriber uptake during the battle. I'd also be interested to see just what kind of impact this had on Aereo signups.



albreznick 9/3/2013 | 2:32:47 PM
Re: Poof Funny how that always seems to happen, eh? So now the big question is: How much more will TWC pay CBS for the channels? Also, how much more do you think the CBS channels are worth? If you were TWC, what would you pay? And was this month-long standoff worth all the bad publicity for either side?
KBode 9/3/2013 | 9:23:45 AM
Poof Like most people speculated, the deal got closed right before the NFL season, which like in retrans fights previously, adds more public pressure and a lot of political grandstanding to the mix. Standing up for poor blacked out NFL customers apparently polls well.

Always enjoyable how the feud is such a massive, ugly, public affair, but then the deal is struck in total secrecy as if nothing every happened.

Now customers can look forward to the second annual rate hike they get regardless of which side "wins" in these ugly fights.
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