Monday, August 05, 2013

CBS vs. TWC

Oh no! I can’t watch UNDER THE DOME tonight on Channel 2! Oh no! I can’t watch NATIONAL LAMPOON’S ATTACK OF THE 5’ 2” WOMEN on SHOWTIME.

CBS and Time-Warner Cable are embroiled in a war over rights fees that has resulted in CBS channels and SHOWTIME channels being blacked out on TWC systems in Los Angeles, New York, Dallas, and elsewhere.

Oh, the humanity!

Where do I stand? This is one of those heavyweight prize fights you don’t care who wins but you hope goes all fifteen rounds.

It’s Goliath vs. Goliath. Or more like General Zad vs. Bane. Who do you root for – the gazillionaires at Time-Warner or Sumner Redstone's Viacom? What’s fun is watching the public cat fight.

CBS wants TWC to pay a huge increase, claiming their network is number one and viewers should pay accordingly. TWC says the increase is outrageous (600%) and they have to draw the line somewhere. CBS claims that number is fictional but hasn’t released what the real number is.

Here’s the truth:

TWC recently spent billions – that’s right, billions – on securing the rights in Los Angeles to the Lakers and Dodgers. They’re not exactly poor. And yet, good luck when your cable goes out. For all their riches they seem to have two guys in one repair truck covering all of Southern California.

The network TV model no longer works as it once did. Top rated shows commanded the biggest dollars in advertising revenue. But now those top shows aren’t getting the numbers CHEERS did when it was in last place in 1982. And with DVR’s, commercial skipping, and other portals to see your favorite shows commercial free, Don Draper isn’t shelling out the big bucks anymore for the Nielsen top ten. Networks such as CBS have to find new revenue streams.

Oh, and like most giant conglomerates – they’re both greedy. Their primary concern is profits. Their secondary concern is more profits.

So it’s hard to pick a side. And now both opponents are trying to get you to do just that. CBS has commandeered their big Jumbotron boards in Times Square to blast TWC. TWC is taking out ads painting CBS as the dastardly villain and them as innocent little Nell. TWC was telling customers how they could get CBS for free via other portals. CBS then cut broadband service to any customer trying to access CBS.COM via a TWC provider. TWC then yelled, “Hey! That’s not fair!” CBS is telling TWC that they don’t care about their subscribers and are holding them hostage by denying them CBS programming. The goal is for you to apply pressure on one side or another. 

Will CBS take a significant ratings hit being blacked out on these systems? Yes. TWC controls 19% of New York viewers and in LA – a whopping 37% (including people in the industry who don’t like to be inconvenienced). In Dallas it’s 25%. But wait! There’s more. Some TWC customers with lose CBS in Boston, Pittsburgh, Detroit, and Denver.

So my question is: it’s getting pretty ugly. Just how ugly can it get? I must say I find it fascinating watching two titans play hardball with each other. We’ve had PR volleys. We’ve had a blackout. We’ve had Times Square propaganda. At what point are there riots in the streets because folks can’t see their RAY DONAVON? When will we see a million angry people at the Washington Monument all chanting: “WE WANT OUR JULIE CHEN?”

But here’s what I really don’t understand. Why have the blackout now? Why not wait a month? If CBS can’t rollout their new fall schedule that’s a huge blow. Big advantage to TWC there. But once September rolls around the NFL is back. If customers can’t see their NFL games on Sunday they’ll go berserk. Advantage: CBS. Either way, the stakes are raised. This reminds me of Writers Guild strikes in years past that would begin in March. The TV season ended in March. We’d be on strike for four months before producers even knew we were out. The last WGA strike was right in the middle of the production season. You can argue whether the strike was successful or not, but at least it got Hollywood’s attention. We’re missing reruns.

There were no negotiations all weekend and none were scheduled. But that can change quickly. And when forces are motivated to move they can react very quickly. We could go from impasse to settlement in one hour. Or this could drag on. The deciding factor will be money, not us customers (despite all the spin). We’re just pawns. And eventually, things will be back to normal – lousy cable service and 2 BROKE GIRLS. Except however it shakes out, we’ll be paying more.

38 comments:

Robert Pierce said...

This is exactly why I created my own startup, one that will deliver free, ad-supported shows/movies online.

I'm getting fed up with paying $1200 a year for cable, and quite frankyl, I'm fed up with paying $8/month for Netflix when their content either stays the same or dimenishes.

I just don't understand why content providers and cable companies are not willing to provide more. Just imagine, if you were CBS, staying with cable would mean you are restrained to 24 potential hours of programming/day. By going online, you have an unlimited # of hours/day for programming. Instead of showing 15 shows a year, you can show 30 or 40, etc.

You can also do so much more with advertising online than you ever could via the television. Imagine watching an ad for the pizza place down the street (because we can track where you're watching from) and by just clicking a button on the ad, the pizza shows up 20 minutes later. Or watching an ad for Olive Garden and being able to reserve a seat all through an ad. Mind you, I'd want the reservation to be transferred to my phone, and have my phone remind me when to leave for the reservation, taking into consideration any traffic on the way.

And imagine companies being able to sell their products directly to the viewer through an ad. The ad plays, the viewer clicks the buy button, and boom, there goes the middle man markup.

All of this, because you put television online.

Any thoughts?

Anonymous said...

What does CBS have in common with China, Iran, Myanmar, Syria, Tunisia, Vietnam Iran, Oman, Saudi Arabia, Sudan, Tunisia, UAE and Yemen? They all block websites. I am forced to side with TWC for the simple fact that CBS blocked TWC internet customers from the CBS website. I don't have cable, but I do have high-speed internet from TWC (the only provider in my area). I like to watch shows that are posted to the website, but because I'm associated with TWC, I cannot. Can't believe CBS is allowed to do this.

Colin said...

Seems to me TWC is in the bad spot here - eventually there will be a Roku, AppleTV or Hulu device and content will stream to the box on a personal subscription model, like magazines.

Currently viewers who want to take Road & Track and Popular Science also pay to get Brides and and Highlights. (Do they still publish Highlights?)

If TWC wants to survive then giving viewers the ability to subscribe to the content they want, rather than being force fed what the conglomerates want to bundle, will make the most sense. Give viewers the options and make the networks perform.

Scooter Schechtman said...

It's the Disgusting Irresistable Force vs. the Putrescent Immovable Object. The winners will be Flo from Progressive and the Gieco lizard, and we know who the losers will be...

Jim K said...

I understand the game. We've seen it all before.

What I did not understand was why my Showtime channels (Dexter!) are currently blacked out (in upstate NY) but the other CBS channels are still airing. I watched golf yesterday on CBS. Probably be able to watch 'Dome' tonight.

Why are we getting more, or less, than other markets? Not really looking for an answer - just griping.

Bob Summers said...

Let's face it: Time Warner comes out on top.

Why? Any way you slice it, viewers aren't going to fork out more money just to have CBS in the lineup.

Miss your CBS favorites? A deal with Netflix can be structured. They can't prevent the DVDs from going into the stores. And those are free of ads.

NFL? Buying the Sunday Ticket from your provider may be the best option, if TW doesn't block those as well.

Watch online? I doubt it. People just bought dumb digital TVs and aren't likely to get a smart one just to watch CBS or anything else. Once it's been free for so long, attitudes will not change.

Eager said...

Interesting that no one has mentioned the most obvious option, at least for CBS itself: hook up an antenna.

Obviously, this isn't a good option for everyone, but most people should be able to receive OTA signals just fine with a decent antenna.

Mork said...

No offense to Ken, but I still think the best description of this whole stupid thing came from Mark Evanier: "This is, of course, a dispute between two corporations that each make eighty truckloads of money per hour but want to make 81."

Rory W. said...

On a smaller scale, DISH Network (satellite TV) and my local CBS affiliate (Raycom Media) are also in a dispute which has resulted in CBS being unavailable.

The only thing I'm missing now is Craig Ferguson, but if this isn't resovled by the fall, I'll need to get my Big Bang Theory fix elsewhere.

Johnny Walker said...

I know it's an overused joke, but: #firstworldproblems

Robert: I think Hulu, Netflix and all the other big players in the online subscription TV space are completely aware that lack of content is hurting their services. The problem is that I don't think the content owners are particularly trusting of this technology or of the revenue stream. Online advertising sells for a fraction of its TV counterpart for a reason: It's nowhere near as effective.

This is why Netflix, desperate for new content, and trying to establish themselves as a serious alternative to TV, have begun making their own shows. (And from what I've been told ORANGE IS THE NEW BLACK is the new SOPRANOS, so they're doing something right.)

Subscription services, while undoubtedly having a place in the future, are still suffering from Spotify syndrome: Not offering enough in the way of payment to keep the copyright holders happy. Until someone figures out a way to keep both them AND the customers happy, I think online TV subscription services are going to remain lacklustre.

Good luck trying to solve things!

benson said...

CBS, ShmeeBS...

My fiance has ATT/U-Verse, and they dropped Hallmark Channel, so it looks like she'll be missing all their Christmas specials. That is going to be one pissed off woman.

Joseph Scarbrough said...

OH, Time-Warner Cable... I thought you were talking about The Weather Channel, stupid me.

Gee, can't Time-Warner Cable get along with anybody?

DonBoy said...

Anonymous (comment #2): the difference is that CBS is blocking other people's access to THEIR OWN web site, which they are perfectly entitled to do. It may not be wise, but they aren't a totalitarian state. Come on.

As to the main issue: I don't have TWC so don't care from that point of view, but if I did, I think I'd think that I pay TWC, not CBS, so TWC has to either pay CBS what they want and give me what I'm paying TWC for, or don't, and charge me less. Your suppliers are not my problem.

Little Miss Smoke and Mirrors said...

I'm a TWC subscriber in LA, but I'm not affected by the blackout. Reason? I don't watch any of the dreck on CBS. And I certainly don't want my cable rate increased to continue not watching it. So I guess that makes me Team TWC.

Roger R. said...

Last night, I tuned into CBS to see if the dispute had been resolved only to find that it had been replaces by STARZ KIDZ and showing an Adam Sandler movie.

Now I'm mad.

Aaron Sheckley said...

The problem with the alternatives to cable, such as Netflix, Amazon Prime, Hulu, or what have you, is that they are still stuck with getting their content from the very same providers that are in dispute with Time Warner. Netflix recently lost something like 1400 movies because of a dispute with Starz, and the same thing could happen with any of the other media corporations that own these films and TV shows. The moment a media corporation realizes the amount of money they are missing out on (which is what I think happened between Netflix and Starz), you can believe that whatever cable alternative you support will find itself in the same position as Netflix; dropping tons of content because they can't afford it. I don't see how an independent, ad and subscription based content provider would be able to withstand a 600 percent price increase from someone like Viacom.

As for original programming, it's a great idea in theory, but how much original programming can someone like Netflix actually produce? If they or a similar company actually began to become actual competition, someone like CBS would just buy them out and absorb their programming into their own vault.

I don't know what the solution is. I do know that, as long as a select few corporations own pretty much every bit of content that you're watching, you're stuck with them.

Aaron Sheckley said...

@ Johnny Walker;

Normally I hate the term "First World Problem" but yeah, in this case, it really does apply. If someone out there is in a crisis because they can't watch "The Big Bang Theory" (and you KNOW someone is) a trip to a burn ward or a children's cancer hospital might be in order. It's just television, for god's sake....go read a book.

gottacook said...

However this shakes out, I can imagine a time not long from now when there is much less total content produced each year than there is today. People will be doing other sorts of things for entertainment (perhaps more live theater?); they won't understand why their parents - or they themselves a decade or two earlier - would have been followers of anything so quaint as a weekly TV series.

Mike said...

Last night, I tuned into CBS to see if the dispute had been resolved only to find that it had been replaces by STARZ KIDZ and showing an Adam Sandler movie.

Now I'm mad.


That is such epic trolling by a corporation that you almost have to respect it. Almost.

Eric J said...

Television news is about network corporations battling it out. Sports news is about player contracts and sports corporations buying other unrelated corporations. Hollywood is about box office receipts and NASDAQ.

None of it is about what Carla said to Cliff, batting averages or a new supporting actor stealing a movie from an established star.

It's all Roller Ball.

Anonymous said...


Bought a $10, inside, high powered, 1080 antenna (like to watch golf) and it worked fine, even got Hi-def. Good thing to have around anyway, just in case it all goes out.

BigTed said...

Hey Ken, on last night's episode of 'The Newsroom,' we finally found out what happened to Maggie in Africa, and it turned out to be almost exactly like the finale of 'MASH.' (Spoiler alert, if anyone cares...) That is, a child is killed on a bus in a country wracked by violence, and as a result one of the American main characters goes through a personal crisis.

Do you think Sorkin meant this as some kind of homage?

That plot on 'The Newsroom' is being criticized for heavy-handedly using another culture's problems just to show the affect they have on a white American. (Although it could be argued that on both shows, the opposite is true -- the writers are using the American character we're familiar with to help us understand another culture's situation.)

Did 'MASH' get similar criticism for the Hawkeye story at the time, or have attitudes changed since then? (Or do critics really just dislike 'The Newsroom'?)

Anonymous said...

I have a digital converter box and a set of rabbit ears so I won't miss a minute of Sharon Tay!

Wendy M. Grossman said...

The CBS/TWC thing is exactly what all the network neutrality battles are all about, and my view has long been that it's simple antitrust (if antitrust law can ever be said to be simple): the people who own the means of distribution cannot be allowed to also own the content, whether you're talking about movies (the studios being forced to divest theater chains), oil (Standard Oil being forced to divest gas stations), or data packets.

Ken, I also thought you might find this article interesting - it's about the emergency of female power in British comedy: http://www.independent.co.uk/arts-entertainment/comedy/features/funny-business-meet-the-women-running-comedy-8742853.html

wg

Dan in WNY said...

I think that this is a better analogy than First World Problems, given the diminishing role of traditional TV in the 21st century: I heard a financial analyst compare TW & CBS to two huge dinosaurs fighting over a bone just before the asteroid hit.bledNEq

Mike Schryver said...

To Jim K:

It's only the CBS owned-and-operated stations that are blacked out. Assuming you're not getting WCBS in NYC, your station is owned by a company that TWC doesn't have a beef with. CBS does own Showtime, so that's blocked everywhere on TWC.

-bee said...

I just heard some 'expert' on an NPR show imply that if you want to get CBS over the air via an antenna - you have to 'give up your Time Warner Cable".

It does not help things that there are people out there in the media itself misinforming the public.

I understand that some of the channels involved (showtime, etc) are not available over the air, but for the CBS channel, all you TWC folks can unplug the cable box and plug in an antenna.

To go back to cable, simply unplug the antenna and plug the cable box back in. It's not that complicated, is it?

-bee said...

(PS in regard to my above post - if you have an older TV without a digital tuner, you will need a converter box, but most newer flat-panel TVs have had digital tuners for many years now.)

John said...

But once September rolls around the NFL is back. If customers can’t see their NFL games on Sunday they’ll go berserk. Advantage: CBS.

To be fair, in New York, WCBS will be broadcasting most of the Jets games to viewers across the tri-state area during the season. So as far as the blackout goes, Advantage: Time-Warner.

Igor said...

"Net Neutrality"

This is not equivalent as a legal matter, but it is as a political matter.

CBS and other content providers scream when they suspect that ISPs (e.g., TWC) are limiting/downgrading access to any content based on where that content is coming from. They all scream for "Net Neutrality!!!"

Okay.

Now, CBS is blocking its own content depending on what ISP is asking for it - on behalf of the ISP's subscriber, i.e., the consumer/audience.

Does CBS have a legal right to do this? Yes. Does TWC have a legal right to block access to CBS.com if it wanted to? Maybe, unless "net neutrality" is applied. And as a political matter - No.

But whoever is doing the blocking, it's the consumer who can't get what he/she wants when he/she wants it. And that is where political equivalence comes in.

Doesn't matter who's doing the blocking. If one day consumers can get CBS.com online and the next day they can't, they don't care if TWC or CBS or al Qaeda is doing the blocking. They don't care about the niceties of "net neutrality" concepts or regulations.

It's simple: Consumers can't get what they want, the feds can do something about it, consumers complain, thus giving Representative X and Senator Y something to act on... And the shit hits the fan. AKA, hearings are held.

CBS has made a political mistake with this.

And as a fan of Capitol Hill comedy, this makes me happy.

James said...

If you live in LA, it means you can't watch Stephanie Simmons do the morning traffic.

If KCBS had the nads to run promos with her that said, "this is what you won't be seeing tomorrow" they'd get more action.

XJill said...

I honest to God never noticed how I don't watch CBS until this happened. I didn't notice until today when I went to set my DVR for Craig Ferguson because I wanted to see if he mentioned the 12th doctor being his friend.

Hamid said...

Friday Question - I knew about your writing work on Cheers, Frasier, MASH etc, but when I read your full credits on IMDB, I was intrigued to see you worked on Mannequin on the Move. I've not seen it but I'm curious to know what your experience was like working on that.

Anonymous said...

And to think...we used to get it all for the cost of a tv. The cable channels I understand as there isn't quite the advertisers. But for the CBS network broadcasts? Just idiotic.

Pam aka sisterzip

chuckcd said...

So glad I have DirecTV

Mike McCann said...

Ken,

I am surprised that you, a sports guy, overlooked a subplot in this drama. With TimeWarnerCable launching cable channels that will become the fulltime home of the Dodgers and Lakers, CBS-owned KCAL-9 is losing a big part of its local programming. So there was already bad blood involving the LA market even before the old carriage deal expired.

Storm said...

@XJill: So far, not a word from Craig about Peter Capaldi. I think this week's episodes were taped last week, because if they were new, there's no way he could contain himself from screaming the fact that one of his oldest and dearest friends, the man responsible for his (Craig's) career ("Mate, you're funny. Forget drumming, get on stage and be funny!") is now the star of his all-time favourite show. The first thing I thought when I heard about it (besides "Oh, thank Bowie! A REAL ACTOR!") was "Oh dude, Ferguson has GOT to be freaking OUT! Maybe NOW he'll get that Doctor Who guest star/cameo spot that he kept asking Matt Smith about!"

Cheers, thanks a lot,

Storm

blackbird4823 said...

Screw then both -- money is the ONLY thing they are interested in! They could give a damn about us.

But I say "let them play -- let them fight it our" every CBS show on CBS can be downloaded from a torrent file and watched WHEN YOU'RE READY TO WATCH IT...........

may the games begin.....