Cable, TV standoff rooted in federal regulations
Time Warner has pulled plug on WDTN; other stations may follow as consent deals are renegotiated.
Tuesday, October 14, 2008
The growing standoff between cable operators and TV networks over retransmission fees has its roots in government regulation and the changing telecommunications industry.
In the 1950s, Congress granted networks the right to designate a single affiliate station in every market so advertisers would buy into the new medium and consumers could watch free. Decades later, Congress gave a break to another fledgling industry by allowing cable operators to retransmit TV station signals free of charge.
But in 1992, with cable companies firmly entrenched all over the country, Congress overturned that law, giving TV stations the right to negotiate retransmission fees.
For years, TV networks asked little or nothing in return for cable retransmissions, largely because cable was offering them a profitable new stream of advertising revenue.
Today, with the networks competing for dwindling advertising dollars, TV stations want top dollar for their retransmission rights, and cable companies are balking.
Time Warner Cable subscribers in the Dayton area have been without NBC programming since midnight Oct. 2, when the cable company and the owner of WDTN-TV Channel 2 failed to reach a long-term consent agreement.
Those talks continued Monday, Oct. 13.
With about half of the TV industry's consent agreements due to expire Jan. 1, cable subscribers everywhere can expect more station blackouts, says Michael Malone of Broadcasting and Cable magazine.
Barry Faber, vice president of Sinclair Broadcast Group, owner of Dayton's Fox 45 and WKEF Channel 22, said TV stations are looking to minimize costs and maximize revenue like every other business in today's tough economy.
That doesn't bode well for customers of Time Warner, which will soon be in negotiations with Fox affiliates, said Rich Greenfield, an analyst with Pali Research.
Cable executives complain they are forced to pass higher retransmission fees on to cable consumers for programming viewers can get free with an antenna. "We get the blame because we're the ones who have to collect the fees from the consumer," said Matt Polka, president of the American Cable Association.
But TV networks say cable firms benefit plenty from their programming. "The proof is that 95 percent of satellite consumers are willing to pay $5 to $6 extra to get the local TV stations," Faber said.
The TV industry is far bigger and more diffuse than it was when government passed the "non-duplication laws" granting regional network monopolies, cable executives have said. They want the law changed so they can negotiate consent fees with a variety of TV stations transmitting the same programming, whether in Dayton, Cincinnati, Indianapolis or Columbus, Polka said.
Greenfield believes Time Warner has the most to lose — subscribers likely will defect to satellite and phone TV services to get their missing NBC programming, he said.
Despite the Time Warner blackout, Lisa Barnhorst, station manager at Channel 2, said the NBC affiliate is reaching "more than half our market" through other carriers. "It's business as usual here," she said.
Comments
By ann
October 17, 2008 4:41 PM | Link to this
For those die hard WDTN fans, just wait, after they lose money because advertisers do not want to advertise to them, and the 700 club sues them for not reaching the audiance they are paying WDTN to reach, they will come crawling back to TW.
By tired of the mess
October 15, 2008 7:59 PM | Link to this
I will stick with Time Warner, due to the only thing that I really watch on WDTN is Law & Order SVU they really don’t have anything else on there that I care to watch. Not to mention if I really want to watch WDTN that bad then I can switch to antenna and watch it for free.
By Me
October 15, 2008 10:45 AM | Link to this
I just want to know how all this comes into play when we are bombarded with messages about broadcast going digital. Won’t we need someone retransmitting everything for us. You can’t buy a TV with rabbit ears, can you. I think if Time Warner wins this one you can bet that satellite providers will want their share too. Everyone has their hand in my pocket. I think I’ll just shut the TV off.
By OneWhiteDuck
October 14, 2008 9:04 PM | Link to this
Well Dish and Direct are great unless there is a storm or it’s raining or snowing or windy. Then you call for a repair tech. With the dish boys that will cost you. In fact it just doesn’t take much to throw off that picture. If the weather is perfect and so is everything else, the picture and sound is great. If you have a problem with Time Warner the repair is free and part of there service. Rent the shows on DVD, or do what we did when we got the LCD, run the high speed cable to the TV!
By OneWhiteDuck
October 14, 2008 9:04 PM | Link to this
Well Dish and Direct are great unless there is a storm or it’s raining or snowing or windy. Then you call for a repair tech. With the dish boys that will cost you. In fact it just doesn’t take much to throw off that picture. If the weather is perfect and so is everything else, the picture and sound is great. If you have a problem with Time Warner the repair is free and part of there service. Rent the shows on DVD, or do what we did when we got the LCD, run the high speed cable to the TV!
By OneWhiteDuck
October 14, 2008 9:03 PM | Link to this
Well Dish and Direct are great unless there is a storm or it’s raining or snowing or windy. Then you call for a repair tech. With the dish boys that will cost you. In fact it just doesn’t take much to throw off that picture. If the weather is perfect and so is everything else, the picture and sound is great. If you have a problem with Time Warner the repair is free and part of there service. Rent the shows on DVD, or do what we did when we got the LCD, run the high speed cable to the TV!
By jemcx
October 14, 2008 3:19 PM | Link to this
I’ve had dish for almost two years and wouldn’t go back to that money-grubbing time-warner if they paid me.
By loyaltimewarnercustomer
October 14, 2008 3:18 PM | Link to this
I am not taking sides because I think both companies are standing their ground. Time Warner is thinking about their customers nationwide and Lin Broadcasting wants Time Warner to compensate them for their transmission signal. I really don’t care if WDTN is in the channel lineup because I have one tv that has rabbit ears that I can watch my soap opera or I can wait a day to watch my soap opera on Soap Network. Jim, needs to check his facts because it wasn’t Time Warner that pulled WDTN signal.
By loyaltimewarnercustomer
October 14, 2008 3:07 PM | Link to this
I am going to stick with Time Warner with or without WDTN in the channel line-up. I am very happy with Time Warner and I am going to remain a loyal customer. I have my choice of watching my soap opera on WDTN with rabbit ears or wait a day and be able to watch my soap opera on Soap Network so it really doesn’t make a difference to me.
By thrilled1
October 14, 2008 2:31 PM | Link to this
I got DirectTV because of this mess and I LOVE it! I would highly recommend making the better technology switch.