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

$75 gift card to switch to Verizon FIOS?

[RevWaldo]

Sure I'll take that deal - WHEN YOU MAKE FIOS AVAILABLE IN MY @%&#! NEIGHBORHOOD!!!

bundle fees have to end

[YesIAmAScript]

Al la carte, please.

You want to know why your cable bill is so high? This is why. Cable stations (and now network stations) charge cable companies to carry their channels. So they get paid whether you watch their content or not!

It is these deals that keep things like Hulu from happening because why would a cable station offer their program for only advertising revenue online when they can get fixed monthly revenue plus advertising over cable/satellite.

And this is why your cable bill is so high. You are paying for channels whether you watch them or not. And due to big bundles, you're paying for a lot of them.

Meanwhile, the cable (and satellite) companies make these big bundles so they can hide the cost of carrying these channels by making you think you're paying for breadth of content. Mostly, you're actually paying most of it for 5 ESPN channels! And that's great if you want to pay that much for ESPN. But the rest of us need more choice.

Each channel should be individually tallied so you know how much you're paying for each channel. If you feel the channel is worth the price, you pay for it. If you feel it isn't worth it, you can not pay for it. And if enough channels don't get picked up by people, they will realize they can't just get free money, they have to provide content people want to watch, and once they do that, they won't care if they get their viewers from cable companies or Hulu.

This would be preferable to seeing larger and larger bundles pushed on us.

Re:bundle fees have to end

[cdrguru]

Ala carte cable will probably happen - and then be changed in a twisted way never to be seen again.

The problem is that nobody (and I mean NOBODY) will pay for EWTN. The majority will not pay for BET. A few people, but not enough will pay for the Golf Channel. I don't really see people paying for the Weather Channel either.

OK, so now Jesse Jackson gets in some Congresscritter's face and demands that the discrimination against BET cease. So now there is a BET tax. The Catholic Church sends a few letters and a priest or two about EWTN being discriminated against and how this lack of diversity is affecting people. So now BET and EWTN are somehow subsidized.

How many people will actually pay for Spike when they have to make an individual choice? Better put, how many married men will be able to convince their wives that Spike (with Manswers) is a good thing to spend money on? Not enough to keep Spike on the air, that's how many.

I suspect SyFry will go the same way - some people pay, just not enough. As will be the case with about 75% of the channel lineup. It isn't that anyone will make a decision to eliminate these, just that there isn't enough people paying to make it possible to continue to operate. What made the Golf Channel possible was selling it to the cable and satellite companies, not selling it to individual subscribers.

The end result is there are maybe 20 cable channels left. Oh, 22 - I forgot BET and EWTN. At that point the whole cable TV idea is pretty pointless and developing a new channel is next to impossible - you don't sell the cable management, you have to sell individual subscribers.

I am sure I am not the only one with this vision. Just the threat of the discrimination lawsuits would be a serious obstacle. The market shrinkage is nearly provable and would easily make it next to impossible to get this done.

Re:bundle fees have to end

[dirk]

This is a great idea if you REALLY want to devolve into total crap. Everyone (especially geeks) like to complain about all of the crap on their TV. There are too many crappy reality shows and not enough good content. If TV went al la carte, this would truly be the case. The reason most of the smaller niche channels, the ones that have the good original intelligent programming, can survive are because of bundling. It is, unfortunately, also the reason there are 7 ESPN channels and 12 religious networks, but I will put up with them to have the good content. Channels like G4, the Science channel, the National Geographic channel, the lesser music channels that still show music such as VH1 classic and Palladium, the History channel, and Ovation wouldn't be able to exist without bundling. Instead, all that would be left is lowest common denominator TV like MTV and E. We would lose probably half the channels, but int hat half would be the ones that are willing to take a chance and show interesting niche programing instead of showing reruns of American Idol and the Real World.

I will happily keep paying for bundles to make sure there is actually something I want to watch available on my cable system.

Re:bundle fees have to end

[vlm]

People will be unhappy about paying $25/month for one channel and a competitor will come along that only charges $12 for that channel, and people might pick that one up instead. It's called competition. Similarly, if you say only 3 channels cost $25, then all those other channels will be pretty cheap, won't they? So why do you suddenly say I'll only have 3 channels if all the others have to go down to pennies a channel in order for me to pick them up?

Oh my. I'm not seeing any way in which ala carte would benefit the consumers.

1st) Here, cable is a regulated monopoly based on contracts with individual municipalities. There is only one cable company in the area. There will be no competition. Its like saying police brutality isn't a problem because a competing police station will set up shop and put the bad one out of business, uh no thats not possible. In a way its good, ala carte would cost a lot to bill, and all that cost can be passed along by the local monopoly onto the customers. On average they'll just end up paying more, for more complicated billing / more support calls to add/remove channels.

2) The "individual channel cost" is currently a pretty arbitrary marketing number. The channel costs are made up, so as to achieve a total corporate income of $X, our rigged non-free market price of 300 channels is $X. So, you'll simply have the ala carte market manipulated by the very small number of sellers into, the cost of your 3 channels also happens to be $X. After all, you were willing to pay $X for the 3 channels you watch out of the 300 available before, and you're not going to disconnect because something you have no interest in is unavailable. There is no free market, there are only a small number of suppliers and there is only one ESPN. I'm mystified by people whom think the big media corporations would accept less money, apparently out of the goodness of their corporate hearts, just because their local cableco changed their billing system. One way or another, a small cartel of non-commodity suppliers will maintain a constant (or increasing) income.

3) A free market only works if its free. Err, wait, cable is a regulated monopoly, not a free market. How will the regulatory groups handle free channel market pricing, they can barely handle annual increases? Cableco can't sell ESPN for $20/month for a year at a time if that's the wrong price in that market. Think of other confuse-opolies of endless mysterious little added charges like cellphones. Is there any confuse-opoly out there that benefits the consumer? No. They all result in MORE money being sent to the big corps. So, how does setting up ala carte, aka a big confuse-opoly, benefit the end users?

4) Also, to be honest, whom really wants to wait on hold for two hours to "subscribe" to the history channel to watch one program and then another two hours on hold to try and "unsubscribe"? I'm seeing it as an unholy annoyance no one will like.

I will concede that, for the 1% of tv watchers whom only watch EWTN 24x7, they will have somewhat reduced bills. But, overall, looking at a metro area, ala carte could only result in more money being extracted in total from that area.

OTH?

[hackstraw]

I skimmed the article, and the summary seems pretty good. So, isn't ABC still broadcast over the air? I didn't see a list of the other ABC channels, but most everything focused on the main ABC one like Lost, Good Morning America, Oscars, etc.

Also, this seems to be a trend with ESPN and other companies and cable providers having standoffs. Yes, I'm one of those that got rid of cable and haven't bothered with hooking an antenna to my TV. Even with a DVR, the commercials and lack of good content just makes watching too much effort (and cost) for the reward.

To the people saying A La Carte is the answer

[boguslinks]

Sirius Satellite Radio rolled out an A La Carte program in 2008 (under pressure from the government), and the number of subscribers that have chosen it is tiny.* Really really tiny. Mel Karmazin grits his teeth every time it's mentioned to him, the high cost it took to implement it and the tiny subscriber adoption.

So it appears many consumers really do like flipping through a zillion channels, for both radio and TV. I'd say it's a small Slashdot-style minority clamoring for A La Carte programming.

*I will say, Sirius does not exactly go out of its way to promote the A La Carte offering. But it does exist.

Re:To the people saying A La Carte is the answer

[RoFLKOPTr]

So it appears many consumers really do like flipping through a zillion channels, for both radio and TV. I'd say it's a small Slashdot-style minority clamoring for A La Carte programming.

The push for a la carte isn't about flipping through a zillion channels. It's about price. People don't want to pay $80/mo for 1000 channels if they're only ever gonna watch 10. Sirius costs $10/mo.... to perhaps reduce that to $8/mo isn't even worth the hassle of going through and choosing all the Rock and Jazz channels and never being able to listen to Reggae if you're in a tropical mood.

Re:To the people saying A La Carte is the answer

[koick]

Your example illustrates to me a difference between radio and TV however.
I, probably like many folks, enjoy a wide array of music: industrial, rock, jazz, talk, reggae, electronic, 80's, etc.
However, there is a much smaller array of TV show genres I enjoy: the major networks, PBS, science (like Discovery/TLC), Food, Syfy, and History. I will NEVER want to watch: online shopping, soaps, Spanish/foreign language, sports, kids (Disney, Nickelodeon), MTV, CSPAN, BET, E!, Fox News, Golf, Halmark, etc. Making me pay for these is a waste of my money.

Re:abc is not reasonable

[Gothic_Walrus]

i dont think people care the much about losing abc.....

The millions of people who watch Lost and Grey's Anatomy would beg to differ. So would everyone who's planning to watch the Oscars tonight.

It may not be your cup of tea, but it's kind of stupid to say that people don't care about losing one of the major national broadcast networks.

Re:wow.. i dont believe it

[OS24Ever]

Verizon is Different from ABC and Cablevision how?

Re:I've said it before, just two words... last mil

[vlm]

ABC is going to have this coverage of the Oscars. Why do I have to pay for ABC crap content 24/7/365 to watch it?

Why do you have to pay ABC to watch the Oscars?

TV networks are becoming obsolete, just like RIAA/MPAA.

The death throes of the dinosaurs are violent and earth-shattering, for awhile, and then we move on with life, with a new business model.

Senator? Congresswoman? if you're listening, I'm holding YOU accountable.

You're "holding them accountable", they're sending the reelection campaign buckets of their customer's cash.

Re:wow.. i dont believe it

[ottothecow]

I dunno...it always sounds like there are two groups

One is like you, saying that the crappy big commercialized movies beat the really good films.

The other camp says "nobody even saw any of these movies" when they see the list of nominations.

At some level, these arguments are opposing each other--if all the nominations are going to the smaller, more serious films that were not big blockbusters, then you can't have the equivalent of the grammys where every song that is even close to getting nominated is some trashy top 40 piece. I think this years decision to have 10 best picture nominees is actually an attempt to get it out of the "nobody has seen any of this" camp and into having some more "popular" movies show up (I also think this was the idea behind pushing for an animated feature category).

My view is that the last couple of years have generated a bunch of best picture nominations that got more public interest *after* their nomination than they had had at release--of course you may still not agree with the film that wins...but if this was like the grammys, the winners would be Mall Cop and Night at the Museum

"pocketing $8 billion last year"

[ortholattice]

Why is it that reporters seem incapable of distinguishing revenue from profit?

I'm no fan of Cablevision, but let's get the facts straight. $8 billion is their revenue. The actual amount they "pocketed" i.e. kept (the rest going to expenses) is their net income or profit, which was $285 million. This still is a pretty large amount, but the $40 million ABC wants represents a very large chunk of that income, paid to a single programming supplier. I'm in no position to judge whether or not this is fair, but it is natural that any company would look very carefully at such a large percent of their profit.