Viewers may face more TV outages
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Viewers may face more TV outages
Fights over fees likely to continue
By Deborah Yao, Associated Press | March 9, 2010
PHILADELPHIA - Stay tuned for more fee disputes threatening local television stations on cable TV lineups.
Broadcasters hurt by declining ad revenue are demanding more fees from cable and other subscription TV providers to carry the stations. The providers are resisting, and in the latest tussle, Walt Disney Co. pulled the signal of its ABC station in New York from Cablevision Systems Corp. in the hours leading to Sunday’s Oscars telecast.
More such blackouts loom as several networks and various providers across the country have contracts set to expire this year, including one covering major ABC stations in Time Warner Cable Inc. markets. All signs point to down-to-the-wire talks that could leave viewers scrambling for other ways to watch their favorite shows and major sporting events.
“There’s a lot of money at stake,’’ said Robin Flynn, an analyst at SNL Kagan. “There are a lot more fights coming up.’’
Such disputes used to be limited to cable channels such as CNN and ESPN, as they have long been paid per-subscriber fees by the providers.
But in recent years, stations that are broadcast for free over the air have demanded such fees from cable TV and other providers.
That began first in smaller markets, with affiliates that are not owned by the networks but carry their programming. Now, the networks are demanding such fees for the stations they do own, especially in larger markets such as New York and Los Angeles.
More than 3 million Cablevision customers in New York, New Jersey, and Connecticut lost New York’s ABC station on the day of the Academy Awards, one of the year’s most-watched programs. It wasn’t restored until Disney and Cablevision reached a tentative deal. Viewers missed the first 15 minutes of the awards show.
The major broadcast networks, such as CBS, ABC, NBC, and Fox, used to give cable TV and other operators those rights in exchange for getting some of the providers’ slots for commercials, which broadcasters resell to advertisers. Sometimes, the providers agreed to carry new cable channels owned by the network’s parent in lieu of a cash payment.
But the TV networks, looking for new income as advertising revenue weakens, are increasingly saying they should be paid cash for their programs. Although the 1992 federal cable law made it possible for broadcasters to demand fees, the networks didn’t start doing so for their stations until recently. It started with CBS Corp. in 2006.
CBS chief executive Leslie Moonves told analysts last month that such fees were growing and provided “substantial secondary revenue stream.’’
Flynn expects fees for network-owned TV stations and affiliates combined to reach more than $1 billion this year. That’s up from more than $750 million last year and $500 million in 2008.
Fights over fees likely to continue
By Deborah Yao, Associated Press | March 9, 2010
PHILADELPHIA - Stay tuned for more fee disputes threatening local television stations on cable TV lineups.
Broadcasters hurt by declining ad revenue are demanding more fees from cable and other subscription TV providers to carry the stations. The providers are resisting, and in the latest tussle, Walt Disney Co. pulled the signal of its ABC station in New York from Cablevision Systems Corp. in the hours leading to Sunday’s Oscars telecast.
More such blackouts loom as several networks and various providers across the country have contracts set to expire this year, including one covering major ABC stations in Time Warner Cable Inc. markets. All signs point to down-to-the-wire talks that could leave viewers scrambling for other ways to watch their favorite shows and major sporting events.
“There’s a lot of money at stake,’’ said Robin Flynn, an analyst at SNL Kagan. “There are a lot more fights coming up.’’
Such disputes used to be limited to cable channels such as CNN and ESPN, as they have long been paid per-subscriber fees by the providers.
But in recent years, stations that are broadcast for free over the air have demanded such fees from cable TV and other providers.
That began first in smaller markets, with affiliates that are not owned by the networks but carry their programming. Now, the networks are demanding such fees for the stations they do own, especially in larger markets such as New York and Los Angeles.
More than 3 million Cablevision customers in New York, New Jersey, and Connecticut lost New York’s ABC station on the day of the Academy Awards, one of the year’s most-watched programs. It wasn’t restored until Disney and Cablevision reached a tentative deal. Viewers missed the first 15 minutes of the awards show.
The major broadcast networks, such as CBS, ABC, NBC, and Fox, used to give cable TV and other operators those rights in exchange for getting some of the providers’ slots for commercials, which broadcasters resell to advertisers. Sometimes, the providers agreed to carry new cable channels owned by the network’s parent in lieu of a cash payment.
But the TV networks, looking for new income as advertising revenue weakens, are increasingly saying they should be paid cash for their programs. Although the 1992 federal cable law made it possible for broadcasters to demand fees, the networks didn’t start doing so for their stations until recently. It started with CBS Corp. in 2006.
CBS chief executive Leslie Moonves told analysts last month that such fees were growing and provided “substantial secondary revenue stream.’’
Flynn expects fees for network-owned TV stations and affiliates combined to reach more than $1 billion this year. That’s up from more than $750 million last year and $500 million in 2008.
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Win Butler
Win Butler