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Marianne Paskowski



Comcast & CBS: Next Retrans Battle

February 23, 2007 2:52 PM

CBS just scored a major victory with nine small cable operators who agreed to pay the network about 50 cents per cable subscriber to continue to carry the signal, during a retransmission consent negotiation.

Cable subscribers in those undisclosed markets should be mad as hell because cable operators will be forced to pass on that increase to them. So don’t be mad at your cable operator. Instead, give CBS chieftain Les Moonves who is at the head of this charge, an earful when you see your cable bill soar, just to see a free, over-the air broadcast network.

Soon CBS will tangle with Comcast Corp., the nation’s largest MSO with 23 million subscribers. Comcast has vowed that it will not pay cash to carry any over-the air broadcast network. But the law is on the side of CBS here. I predict Comcast will ask for a 30-day extension, in the opening salvos of the next war between broadcast nets and cable ops.

The timing is interesting, for both sides have a lot to lose. After all, the wildly popular March Madness college hoops tournament is right around the corner. CBS cannot afford to lose 23 million viewers and nor can Comcast afford to face the wrath of its subscribers either, if the MSO has to pass out rabbit ears to carry the signal.

Who will win this battle between two giant corporate egos?

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Comments (21)

Ron Inman:

Marianne,

No blame need be assigned here. The customer can still get it free, just not through a 3rd party processor like a cable company or satellite company. Customers gave up the right for free television a long time ago when they decided to purchase their TV. Broadcast programming is certainly more valuable than USA, Lifetime TBS, MTV etc. Otherwise the cable and sat companies would not be recognizing the value equation has changed.

Ron

I think this whole dispute is ridiculous. It is very difficult tpo get a clear signal for most of the broadcast stations where I live. You have to have either cable or satellite. Comcast better get its act together and agree to pay something to CBS.
Since CBS is the top-rated network and not carrying it would be a huge public relations dsiasterfor Comcast, I predict Comcast will quickly fold.
Thanks.

Aaron A:

If Comcast pays (and ultimately they will!) then they should be allowed to show the cost on their customer's bills as CBS Surcharge. It is insane that the so called "Free TV" folks want to charge cable because their finacial metrics went south with the success of the cable networks.

Lastly, the FCC just doesn't "get it" and should be taken to task for not reforming the so called Must Carry statutes a long time ago. Our Tax dollars at work( or not!) folks.

Marianne Paskowski:

Ron,

I am philosophically opposed as a cable (Comcast) subscriber for getting a pass through charge for a free over the air network, CBS, to the tune of 50 cents. Frankly, I don't care if CBS goes dark on Comcast during March Madness, the only sporting event I love because I'm always in a pool where all of thos teams march to the middle square. But I digress.

I'll put out the rabbit ears. But I won't give CBS, indirectly, through Comcast, another 50 cents a month for a network that exists as free spectrum, thanks to government largesse.

And I didn't sign up to cable years ago to watch the Big Three. I wanted CNN, MTV, HBO and was willing to pay the price. But not for CBS.

Thanks for getting the ball rolling here.

Marianne

Marianne Paskowski:

Phillip,

What you say is true, and I'm kinda in the same boat on Cape Cod. Hard to get reception without cable or satellite. But cable ops in Idaho, tough reception problems with the mountain, are getting month by month extensions with broadcas network affiliates. Just talked to once since I wrote this blog.

I think it's unfair to stick it to people who pay for TV just because two giant media companies are on the verge of World War III. If Comcast caves, and pays 50 cents to CBS for carriage, and Comcast in turn passes that charge on to me, I will simply subtract it from my monthly check to the cable company. I am not paying. Sounds like chump change here, and it is. But guess what I'm not gonna be the chump paying the freight here.

Great hearing from you,
Marianne

norm network:

Ironic how ota broadcasters have flip flopped over the decades on this issue.
Over the air stations went to court in an attempt to force cable systems to DROP their signals. Then, they flipped and insisted that cable systems MUST CARRY their signals. Then they flopped and insisted that cable not only MUST CARRY the signal, cable has to PAY for the mandate (not I did not use 'privelege')

I vote that Comcast see how CBS does on its own in the land of rabbit ears

Marianne Paskowski:

Aaron,
Man you get it. The broadcast economic model went south decades ago, a single revenue stream, ad sales. Broadcast networks by law can either opt for must carry or retrans. This is the year of retrans, which tells you the broadcast model is really broken.

Sinclair Broacasting put the boa constrictor around the neck of tiny MSO Mediacom, forcing it to pay 50 cents a sub. CBS's chieftain Moonves is more cocky than ever.

But Comcast will duke it out. I would like to see the NCTA take a position on retransmission consent. So far it has been "neutral" because it's membership consists of MSO's and cable programmers. Many of those new cable nets are on cable because they were chips in earlier retransmission consent negotiiations. But by and large, those new nets are fully distributed, and no longer valuable chips, as they once were.

Yes, the FCC is to blame. But so is the NCTA for being so namby pamby here. It is, afterall, a lobbying group for cable MSO's. But it seems gelded on this debate.

Thanks for your insight.,Marianne

Marianne Paskowski:

Hi Norm,
Thanks for your historic point of view. But as of 1992, I must remind more it became an either or for broadcasters: MUST carry or retransmission consent.

And I'm with you. I hope Comcast takes a stand. The NCTA has not. I think Comcast can spring for 23 million sets of rabbit ears.

So let the games begin, and I'm not just talking about March Madness.

Marianne

Greg B:

I'm already paying $80 a month for my cable...how is another 50-cent charge going to cause my bill to "soar"?? And if all the networks got 50 cets a month from me, it would still be less than ESPN is getting!
Marianne, when did cable's ability to retransmit broadcast signals free get added to the Bill of Rights? This is a business issue, not a constitutional one. The plain fact is that without the addition of another revenue stream, over-the-air networks and stations, especially in smaller markets, are struggling to stay profitable. They have been forced to invest millions of dollars to upgrade their equipment fo HDTV, and have virtually nothing yet to show for it.
And speaking of HD...If I were Comcast, I wouln't pass out any antennas to consumers. They're liable to find their customers saving the $80 a month by watching their local CBS station in 1080i, and buying "The Sopranos" on DVD.

Marianne Paskowski:

Oh Greg,
This is not a Bill of Rights or Constitution issue. Buts an arcane 1992 law that allows broadcasters to opt for must carry or retrans. Apparently must carry didn't work for the broadcasters. Ratings down, no, new creative revenue stream. So now that it's renewal time with ops they push the problem down. Frankly, I probably would do the same if I were Les Moonves. But I'm not. I care about customers.

But if he wins, cable subscribers are gonna pay for something that was heretofore free and should remain so. So save your bleeding heart for others, not me about how the poor broadcasters have been forced to invest millions to upgrade for HDTV.

That is not quite right. They've been riding on the government gravy train, still now,and for decades, not paying for spectrum. Cable does in franchise fees.

And trust me, they, broadcassters, won't make the deadline for digital transistion, crying poor boy.

And they are pathetic. I went to a Super Bowl party with a proud owner of an HDTV set. Guess what, it didn't appear in HD? Now who is responsible, the broadcast network which aired the game, Best Buy, where my friend bought the set from, or the cable op, who if asked, would have told Ed, my friend, what it takes to make HD work.

Thanks for sharing,

Marianne

Cliff:

The days of cable TV are clearly numbered. A large variety of content is available on demand over the internet. It is easy to connect your PC/Mac to a large monitor and have it be your broadcast medium even through high quality stero. The arduous menu naviagation of remote controls and recording is out dated and will be lost to the simple clicks of a mouse through your computer.

Cable companies charging for content will end and they may only provide the internet connections.

Internet sites like Brightcove.com (http://www.brightcove.com/) wll be your master channel connection to all the on demand content available. TV shows will no longer exist at fixed schedules of broadcast. They will lose the interest of the up and coming youth to get it when they want it. Content will be released to on demand.

It is already happening and TV and cable better take a look around and make some major changes.

Marianne Paskowski:

Hi Cliff,

You're talking about something different, digital rights management of intellectual property. Remember, Viacom just took down 1,000 hours of its programming from YouTube because it was not being paid for its content.

But your point is interesting. I spend far more time with my computer than TV set. And I'm not alone.

Marianne

Jeff Mulligan:

Marianne,

No one is mentioning the elephant in the room: free spectrum. Cable subscribers get to pay retrans fees because the government is in bed with broadcasters, pepetuating the farce of their free use of the airwaves. A pusillanimous government, FCC and Congress don't dare anger the broadcasters who control their friee on-air access to the voters via biased news coverage. You pay to play, to get the bias trending your way.

Great idea from Aaron A--put the retrans fee on the cable bill in 72 point type as a government-mandated pass through. That should turn up the heat on the pols who allow this retrans fee and must-carry Kabuki theater to continue. Sunshine is the best disinfectant, so let all the dismayed cable subscribers and angered March Madness fans see what's happening.

And while we're at it, let's put, side-by-side, the figures for the political advertising extortion revenue broadcasters receive and the cost of spectrum (market value) they do not pay. The people will see if Moonves needs their 50 cents. Broadcasters have been ripping all of us off for decades!

Angry Jeff

Marianne Paskowski:

Jeff,
I did mention the elephant in the room, free spectrum. When the great switch happens, broadcasters give back the analogue and get digital in exchange. They can split that spectrum into several channels, but it's still a government handout.

I predict the will ask for digital must carry so that cable is forced to air even more broadcast signals. Hope they don't get it. So far not many stations have done much with the new bandwidth, a little local weather here and there.

But clearly the pols love broadcasters who have become masters of pulling on the strings of a puppit.

Missed you, glad you're back,
Marianne

Tim Winter:

Marianne,

I agree with you, and I agree with Mr. Moonves. As you suggest, customers should not be forced to pay for a network that they might be able to get elsewhere for free. Mr. Moonves is right in that his signal adds value to the cable operator's product and he should be compensated appropriately. But at the end of the day, the perfect solution for everyone is Cable Choice, i.e. the "cable a la carte" model. Customers would be able to pick and choose -- and pay for -- only the networks they wanted. They would no longer be forced to subsidize media corporation profits for programming they find unappealing. The cable industry, of course, hates this solution and has openly lobbied congress and the FCC to prevent it. And the industry has overtly lied to the public and to our public servants in an effort to stave off a market solution like Cable Choice. They say it would cause rates to go up. But that is precisely what is happening now. The network carriage battles -- like what we're seeing with CBS and the cable operators -- will, I hope, lead to Cable Choice -- the ultimate solution for consumers.

Marianne Paskowski:

Tim,
I'm almost in agreement with you about ala carte. But not even the broadcasters want that. Let's not forget that ABC owns Soapnet, the Disney Channel, etc. Fox owns Fox News Channel, FX.ETC.

The dual revenue stream for cable, license fees and ad sales would be ruined with ala carte. Yep, I loathe paying for ESPN, which nobody in this house watches. But I like options and the ability to sample new channels, or nets that I usually don't watch.

And that's the real price of choice.

Best,
Marianne

Tim Winter:

I respecfully disagree that we must pay for one another's entertainment in order to have choice. When I go to the cineplex, I only pay for the one movie I intend to watch, not the other nine films being shown. Yet there are films to fit every market segment. And look at the newsstand. When I buy a magazine, the newsstand doesn't charge me for all the magazines I don't want; I only pay for what I do want. Yet there are magazines and newspapers that appeal to every conceivable market segment. The choices are abundant.

Yes, perhaps some cable networks would not survive under Cable Choice, but the very best programming will find a path to market. And the prices that cable networks are paid will be held to the scrutiny of a true marketplace.

Thanks,

Tim

Marianne Paskowski:

Hiya back,

You sound like a disciple of Chuck Dolan, who heads up Cablevisonand and is the only cable MSO head who I know preaches ala carte. He makes the same analogy about the newstand, that you do. Pay for what you want and only that.

Which is interesting, because he also has programming interests that could be hurt or dead in the ala carte world. Some people might pay to see one of his Rainbow Networks, like WE, but I doubt few would.

Mr. Dolan is smart. But he speaks out of both sides of his mouth. His real goal with ala carte, I believe, is to keep the carriage fees for pricey services like ESPN down, because he owns cable operating systems.

But he's also a programmer, and apparently, he's willing to sacrifice the weaker siblings in his holding company.

Thanks for your thoughtful comments,

Marianne

Marianne Paskowski:

Update: Here's something interesting. Just now, I alerted a top Comcast official about this blog as a heads up. He wrote back, privately, an email to me, that there are no upcoming negotiations with CBS. Wouldn't answer if Comcast already got an extension. from CBS. I asked the question. No answer.

So a heads up to you all, there might be some bad or good scoop out there about Comcast/CBS and their deadline. Wish I could tell you more. If Comcast is not in negotiations it will be ultimately with CBS.

So let's see how this plays out.

Cruiser:

Yo, Blondie,

Let's get real. The broadcast content drivel isn't worth paying for in the first place, considering the endless commercial pods and inane programming. At least the long pods on cable nets are the price for being able to see TV tailored to my interests: CSPAN feeds my political wisdom, History Channel finally tells us what happened after all these years, Sci-Fi thrills us space cadets, and Animal Planet caters to my animal magnetism (Ladies, take note).

Cable honchos should instead demand a modest fee from the broadcasters, or just not carry them. Big outcry from subscribers? Where are they going to go? Not satellite. FIOS? Let the telcos pay the broadcasters' extortion and pass on the charges while suffering the opprobrium, or live with shrunken margins. Telcos should join the boycott, to ensure that broadcasters' outsized clout with cowardly pols ceases.

The reality is that the public treats cable subscribership like a birthright, justifying their complaints over every price increase. So the outcry at cable systems being "forced" to drop broadcast channels (or at least the greedy ones like CBS) will get the pols scrambling to fix the must-carry problem.

Because they kowtow to broadcasters just so they can get the sweetheart coverage and votes in the first place, having cable subscribers (isn't that just about all HUT?) griping that the pols "gotta do something" trumps the favorable coverage the pols otherwise hope to buy when they pander to broadcasters.

Cruisin' not bruisin'

Marianne Paskowski:

Yo Cruiser,

Well the reality is that DBS services and telco video newbies, like Verizon FiOS are paying CBS to carry the net's signal. And now some of the smaller cable companies. I like what Comcast is doing.

You say ops are numbly treating cable subs by passing on cost increases. But so far, I don't sense that Comcast is caving to CBS. And somehow, I also sense that the NCTA is gonna --finally--find its backbone and support its dues paying members, who carry the group to lobby in its behalf, to finally do so. I hear things are astir at the NCTA.

We all have to keep an eye on him: Moonves the bright "eye" of CBS. He already sent out the stalking horse, Sinclair, and its dealings with Mediacom to pave the way. He won a small victory. Chump change. For now. But the battle is far from over.

Blondie back to you. And "call me" anytime.

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