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!!!

Re:$75 gift card to switch to Verizon FIOS?

[tophermeyer]

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

Ditto. I actually receive promotional snail mail the tout the wonder of FIOS, but they do not offer it in my area. They actually mail advertisements to addresses they know they do not support.

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

[TClevenger]

Exactly. And why the fuck am I watched 19 minutes of commercials an hour when my cable company is already paying you $40 million?

Re:bundle fees have to end

[garcia]

Your cable bill is so high because consumers continue to allow cable companies to charge what they do. I dropped "cable" TV (I had DirecTV for a couple of years too) in 2008 and I have been much better off for it. We read more, we listen to more music, and we don't spend hours in front of the TV. I find it to be a win but I understand that entirely too many people do love their TV. Thankfully there are options:

1. OTA

This is what we have now. We watch some shows there and the quality is fine, when it works, and when the dog isn't walking in front of the antenna (I still don't understand how digital TV "upgrade" was a good compromise--at least when the signal didn't come in for the old way you could still see something or at least hear something).

2. Hulu/other streaming availability by network

We watch the majority of what we want to watch via Hulu. Yeah, I realize it's not the greatest option and not every show is on there but to be completely honest, you shouldn't be watching as much TV as you are anyway. Go outside or something ;)

3. Movies/Internet

We used to spend $60 a month on TV. Now we have upgraded cable Internet (I run a website out of my home and needed business class anyway) and we use the Internet a lot more (my masters program is all online) and we spend about $3 a month on Redbox. $57 extra dollars is worth it people.

---

As for the bitching about not being able to catch the Oscars... Go to a friend's house, go to a bar, get an antenna, or just wait till the next day. Believe me, you're probably not missing much.

Re:bundle fees have to end

[blackraven14250]

I think GP was referring to "pick channels individually" rather than "pay per time watched on a given channel".

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.

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

[TClevenger]

Jesus, major grammar fail.

Re:bundle fees have to end

[LazyBoy]

Al la carte, please.

...

And this is why your cable bill is so high. You are paying for channels whether you watch them or not.

Regarding a la carte:
You feel you're subsidizing everyone else, but everyone else is subsidizing you too. Everyone asking for a al carte thinks they are going to be the ones that pay less.

Here's how it would play out. A less popular cable station gets only $.20/household. When 19 of 20 households can drop them, they'll need $4/subscriber to make ends meet. Will the remaining N people pay $4? No? Then they'll need to charge even more or chop programming. Death spiral until it's off the air.

This will happen to the more popular stations as well, but the numbers will be different. You'll have vastly fewer channels when it's done (or vastly more info-mercials).

OTOH, the cable companies are getting bundles pushed on them by the content providers.

Maybe the best thing the cable companies could do would be pass through the bundles forced on them. Give us an ABC/ESPN/etc. bundle and see who buys it.

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.

Re:Poor ABC

[Manip]

If you're going to tell the story at least get it right.
Virgin was about to launch competing channels to Sky One-Three and Sky didn't like that too much and tried to up the cost and Virgin didn't back down and just pushed forward their launch. As a result all of the "free" Sky channels got pulled (Sky One-Three, Sky News, et al).

Sky Sports and Sky Movies never got pulled from Virgin's services since they ran on entirely different agreements (plus Sky and Virgin make far too much on those premium channels).

There was no "big sports event" since no sports channel got pulled. I think this was just before a 24 season start however.

Wow, this sucks.

[Waffle Iron]

I know I'm just dreaming up science fiction here, but if only there were some way that ABC could send their signal directly through space to our TVs and bypass the cable companies completely, we could avoid this horrible situation. Maybe one day it will be possible...

Re:Wow, this sucks.

[cdrguru]

We've pretty much obsoleted that model with the new digital broadcast. Now, instead of coverage areas that extend far beyond cities, the coverage pretty much ends in the suburbs.

The benefit is of course that there are no more snowy pictures - everything is either crystal clear or blank. However, as someone with a home in a rural area we went from five stations that could be picked up and a sixth that was rather iffy we now get one digital station. This is with a 10-foot mast on top of the house with a rotator. Of course a big VHF/UHF antenna is pretty much a waste anyway with the new signal frequencies.

Cable was the obvious choice and allowed moving from fringe-area DSL (384K) to cable Internet.

If you live in a city or close-in suburb OTA is still a reality, at least for now.

Re:wow.. i dont believe it

[Jackie_Chan_Fan]

now now...

I hate the rich as much as you do...

but bullshittery is fun.

I enjoy film. I enjoy film making... but I do agree it is a silly event, and ABC and Cablevision are just two rich whining babies fighting over an amount of money neither of us will ever see in our life time.

To think how many people they could help in this economy... all of the out of work people, with health insurance bills...

Instead two media giants will duke it out over nothing that really matters to real people.

Keep your ABC channels... and Fuck Cablevision. People are out of work... The oscars doesnt mean dick anyone. Its an advertisement for the best films to buy... thats all it is... But I do enjoy film so... But lets call it what it is... Its a FUCKING INFOMERCIAL.

FIOS rules ;)

OTA FTW

[2bfree]

I'm so glad I finally got rid of cable. If you leave near a major city where your local stations are located, take a look at getting an indoor HD antenna. (I'm using the Winegard SS-3000, kinda big but works great.)

Re:OTA FTW

[LurkerXXX]

I'd agree, but leave off the part about 'HD'. An HD antenna is no different then an analog antenna that's been in use for many decades. People not knowing any better pay extra money because the box says HD or someone who doesn't know any better tells them they need and 'HD' antenna. They need a TV antenna. Period.

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.

I've said it before, just two words... last mile

[zappepcs]

This whole thing is ridiculous. At face value and and in the deeper business meanings. Stupid, pure and simple stupid. It's 800lbs of stupid.

This should be avoided, and can be avoided if the last mile is not owned by the content provider. The last mile is community infrastructure that is paid for by subscribers, and should be owned by them. Yes, it seemed easier to outsource this laborious task to someone with a vested interest, but in the end it is not. All those Cablevision subscribers should be able to call customer support and have their content service provision switched while they are on the phone. They should be able to demand a la carte pricing too.

Instead we continue to allow the last mile community infrastructure to be owned and operated by those who fix the price of using the service. No, what I suggest is not the perfect answer, but it puts the ownership and decision making in the hands of the local community, not hot-headed corporate officers whose interest is bottom line dollars. When the infrastructure is owned by the community, and each 'service provider' is tied to the network, subscribers can choose who they want, not suffer until a new provider is in their neighborhood. As it is, we pay for multiple half assed last mile networks instead of paying for one damn good last mile network. We are charged stupid fees to use those half ass networks, and are at the mercy of 'service providers' marketing groups as to what bundles we have to purchase to watch the few channels we do like.

This community owned infrastructure would appear to give ABC an upper hand, but it does not. When I'm allowed to choose who I want to pay for service, and choose what channels I don't want to watch, the financing will do an amazing free market thing: kill off content that nobody wants to watch, lower the price of content that people do want to watch, and redirect monies to making content that is worth watching. 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 can't I use the pay per view options?

Television has been made an integral part of American society, and I think it's a sad reflection on that society that it is controlled by so few people, that so little choice is given to the same consumers that have to choose from 400+ options to buy a pair of running shoes. Personally, I think anti-trust laws were created with the intent of stopping this kind of thing. Screw ABC and screw Cablevision, and all their equals. Senator? Congresswoman? if you're listening, I'm holding YOU accountable.

Re:Poor ABC

[Anonymous Coward]

You say that, and yet Comcast (a different cable service provider) made an offer to buy the entirety of Disney a few years ago, including ESPN and ABC.

Don't always assume that just because a company is old it is always bigger than newer competitors - or customers.

Re:wow.. i dont believe it

[OS24Ever]

Verizon is Different from ABC and Cablevision how?

All Internet All the Time

[l0ungeb0y]

I don't watch Hulu. Instead, I settled on PAYING a la carte via Netflix and iTunes. Personally, Netflix Instant-Cue is my preferred choice, but iTunes has reasonable pricing on the Daily Show and Colbert Report as a bundle and offers House, Better of Ted and a couple other shows that I can't get off of Netflix.

I refuse to watch Hulu because it is tethered to my computer, and even if I went through the effort of getting it on my TV, it's still a clunky web interface and not at all the simple TV-friendly interface I want when watching on my TV.

All in all, I pay about $100 a season, get all the shows I want and am quite happy.
This is down from about $120 a month I was forking over to Comcast.
And the joy of it all is I don't have to watch a single commercial.

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

[DanZ23]

Well for starters Verizon will have the Oscars tonight

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

Re:wow.. i dont believe it

[awyeah]

It's lots of fun to watch if you have money riding on it.

"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.