ABC Pulls Channels From Cablevision

wkurzius writes "Cablevision and ABC have failed to come to an agreement after two years of negotiations, and as a result ABC has pulled all their channels from the Cablevision lineup. The dispute is over $40 million in new retransmission fees that Cablevision says they won't give to ABC. On the other side, Cablevision has been accused of not being fair to their customers despite pocketing $8 billion last year. 'The companies immediately published press releases Sunday morning, blaming each other for failing to reach a deal. Cablevision subscribers on Twitter expressed their frustration, saying they shouldn't be deprived of ABC shows, including the Oscars on Sunday, because of a multi-million-dollar deal gone awry. Competitors such as Verizon Communications took advantage of the dispute. The company launched television, newspaper, and online ads offering Cablevision customers speedy installs to subscribe to its FiOS television service along with $75 gift cards, highlighting a fierce war for subscribers in the valuable New York market.'"

Comments

Re:bundle fees have to end

[vlm]

Here's some corrections to some factual errors/omissions. I am not even remotely speaking in an official capacity and I don't have a dog in this particular fight, but I do have more insight on the topic that the original poster.

1) Some channels cost, some are free/almost free, some pay. The problem is, you can see the total net cost used to be vaguely low/zero because it sort of balances out, kind of. But that's an unstable situation. A 10% increase on one channel, could result in a total net cost change of like 20%. So the claws really come out in the battle. In an internet era, how well do you think television shopping channels are doing? Hence some inbalance leading to chaos. Essentially pay TV is collapsing such that the only successful channels (sports and news) happen to be channels that historically were expensive.

2) Everything you see on commercial/mainstream media TV comes from about a half dozen corps. You can play games with percentage cutoffs vs number of providers, but "most TV comes from about 6 major corporations" is more or less correct. So there is no financial reason to have more or less than about a half dozen bundles. Bundle size/design is a purely marketing driven confuse-opoly situation, like the cellphone business or whatever. A bundle sends a certain bucket of cash to the Disney empire, and the cableco really doesn't care what fraction of that bucket disney earmarks for ABC vs disney channel vs whatever.

3) Its a zero sum game, to some extent. The providers already know that most subscribers only watch about 3 channels and budget their charges accordingly. On average this works pretty well, since almost everything on TV comes from only a couple multinational corps. So, you can pay the big media corps $75 for 300 channels of which you only watch 3, or you can pay $25/each to only get the three channels you watch. Either way the big media corp total revenue will be unchanged. You're better off with 297 channels available that you MIGHT watch in the future, plus people whom watch more than 3 channels would be really screwed with ala carte.

4) This ties in with #3. If a cableco caves into espn or abc, the problem is not that they've lost ONE battle with one channel. It means they've got to fight perhaps 50 smaller channels to make up the money somewhere else. Hence the claws come out. From the cableco perspective, the job isn't to win a battle with one channel, but not to start a war with numerous little channels. Worst case scenario, since some cablecos are owned partially or in part by content providers, is alliance type activity creating a TV WWI scenario where everyone sues everyone and no one wins or survives but the lawyers. Its a lot easier to fight one big channel to the death, than fifty little channels.

they have to provide content people want to watch

5) Ha Ha very funny dude. Actually, they have to sell eyeballs to advertisers. If all they had to do was provide highly desired content, we'd have about 500 channels of pr0n. But in psuedo-christian america, advertisers would get boycotted for advertising on pr0n. Hence, other than ppv, theres not much pr0n on tv. No one boycotts advertisers on violent shows, hence we're supersaturated with violent TV.

6) Some of it is a pure marketing PR stunt. As a rounded down percentage of the total country population, no one thinks of or watches ABC. But at least today, they got some PR. And theres no such thing as bad PR. Cableco costs go up because of the price of gas, insurance, etc, just like any other business, but this is a very public way of showing an attempt at limiting cost increases, even if its not the real cause of rate increases. Therefore, "Kabuki Theatre" time, and once enough PR interest is generated, we can go back to business as usual. I'd give it a couple days.