Monday, August 05, 2013
CBS vs. TWC
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.
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.
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.