No sooner do I decide to cut my expenses and take advantage of switching to Cablevision for a savings of close to $1000 this coming year than I’m made aware of the growing dispute over carriage rights between Cablevision and ABC, and the threat of pulling NY’s Channel 7 from the channel presentation. This would matter to me if I really cared about ABC. Here’s why I’m both concerned and not concerned.
Foremost, ABC has demanded $40M in additional fees from Cablevision to provide Channel 7′s broadcasting. Now a long time ago, the individual cable companies had the right to decide whether or not to carry a local broadcaster, and all of them exercised those rights under an adopted “must carry rule”. It seems the time has passed that the local television stations and their network affiliates are merely concerned with “mandatory carriage”, using the argument that the cable company is paid a fee by each subscriber for a minimal offering called “Broadcast Basic”.
“Broadcast Basic” is a general term for the cheapest package of cable any subscriber is entitled to receive, and is usually composed of the broadcast channels in the system’s service area, along with public access and perhaps a shopping channel or two (since many of the shopping networks revenue share with their cable partners). Apparently, that isn’t enough for the networks in an economic downturn.
ABC in this case wants a 20% increase in its fees paid only to Cablevision. Cablevision is hardly the largest cable provider in the nation (that honor goes to Comcast, which now owns a large chunk of NBC Universal), so imagine the battle that could ensue between the larger providers that include Comcast, Time Warner, Cox and others. How much will ABC demand from them to show something that their viewers can (perhaps) pick up over the air with an antenna.
Let’s talk about why this is very flawed logic and benefits no one, including the networks at this tactic.
- Pure and simple, it’s greed. When your subscribers are choosing between hamburger and steak, or macaroni & cheese versus gourmet pasta, it’s not a good time to go hat in hand and ask for more money because of poor business practices and lost advertising revenue. They don’t score sympathy points from me for that.
- I pay my service provider — whether DirecTV, Dish, or Cablevision — for clear reception and not fussing with mounting an antenna on my roof, not necessarily for the individual channels. In fact, I switched to cable to eliminate the constant interference and unreliability I had with satellite, and I’m not close enough to the transmitters with a clear line-of-sight that an over-the-air signal is feasible. Oh, by the way, if I’m getting you over the air now, how much would I need to pay for that luxury?
- I cannot remember the last time I watched an ABC program. Seriously. If they wonder why advertising revenues are down, it’s probably because you were so fat and happy all those years you could produce cheap reality TV dreck, and now that those days are over and people want engaging television again (e.g. look how the Jay Leno experiment proved that cheap television begets lower ad rates and fewer viewers), you aren’t offering me much. As for news and programming, I don’t watch Oprah, The View, Jeopardy or Wheel of Fortune. There’s not much left.
- Who is next? Don’t believe for a moment that today’s spat is a simple squabble between ABC and Cablevision Execs. Cablevision is the test case, and they’ve chosen the junkyard dog in ABC’s backyard. If they win on this turf, each of the network’s affiliates would have you believe we should be paying for the crap that ABC programs, and at a certain rate per month, per subscriber. We used to have a name for that sort of network, except that they gave us something worth watching: HBO.
This isn’t the right battle or the right idea, and any subscriber of Time Warner or especially Comcast should watch this closely. Yes, I said the “C” word since they now own NBC (or most of it anyway), so what will ABC’s argument then be? Anti-trust, or just returning to the “must carry rule”? I’d be starting to worry now if you subscribe to Comcast and actually watch ABC.
Personally, here is what I’d like to see happen.
Cablevision should let ABC pull its channel. There go 3.1 million viewers out of around 10-15 million in the largest advertising market in the US. So roughly 20-30% of their viewership goes. Not all of it will take the trouble of putting up an antenna, nor will they all switch to satellite (this is New York, folks, and you can’t have unobstructed satellite reception everywhere in the city, nor do all dwelling associations allow satellite mounting). It’s a given they’ll lose viewers. A lot of them.
The May Sweeps period is coming up soon. Advertisers negotiate their rates based on viewership of programs in a market, and losing 20% of that means — you guessed it — even lower ad revenues for Channel 7 in New York. I wonder what they think of the idea of going from “first to worst” so quickly. Personally, and not to be malicious, I’d prefer to see Cablevision draw out the fight for a few months so that ABC’s “stunt” impacts their bottom-line and ABC recognizes the flaws in their greed. Let it run straight through to June and resume negotiations then when ABC would be begging to return to the bargaining table. Oh and by the way, if Cablevision decides to pull the Disney, ESPN and ABC Family offerings, I won’t be too bothered by that either since I don’t watch any of them. Perhaps Cablevision should walk away from the $200M they pay ABC/Disney now, and rather than being $240M richer, ABC would be $200M poorer and learn a tough lesson from the experience.
The fact remains that since the advent of cable and its improvement over time (and this goes for satellite too, so take note Dish and DirecTV customers, you would be next if ABC wins this), we have programming choices. Maybe we have too many, and maybe they all come at too high of a price for too little of a programming investment.
I’m sure people might think I’d be the last person to stick up for Cablevision, but this is just the first skirmish in what will prove a much longer battle. If ABC wins, the viewer loses because the right message on programming isn’t being sent to the customer. Bring back quality programming that people will watch, and your advertisers will pay the share that your viewers shouldn’t be.
Otherwise, you might consider the business model that has been adopted by another network: PBS.
I'm Andrew Buck, the man behind the words. I'm the blogger for Suburbanites.com, in addition to being the author of "The Corrupt Republic" and "(Not) PMO-in-a-Can", as well as a strategic Project/Program Management practitioner for too many years to remember. More information about me is available in the "About" link, as well as at http://www.generalnational.com