Time Warner Cable – CBS Standoff Drags On: Will NFL Games Get Blacked Out?
Tiger Woods’ dominating performance last weekend at the Bridgestone Invitational was invisible to Time Warner Cable Inc. (TWC) subscribers in New York, Los Angeles, Dallas and Denver, after a bitter fee dispute blacked out CBS Inc. (CBS) programming on the Time Warner network Friday night.
Will the standoff drag on long enough to keep football fans from enjoying CBS’ heavy slate of pro football games come the start of the regular season in a month?
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It’s doubtful that Time Warner and CBS will continue playing chicken over CBS’ demands for larger fees for its broadcast signal quite that long, if only because NFL football is the most lucrative TV programming on the planet for all involved.
Yet this isolated, mostly regional skirmish in a long drawn-out war between cable carriers and networks over content costs might just represent a preview of the endgame ahead for the current pay-TV “ecosystem.”
For decades, cable companies have paid networks for their programming, and bundled it for sale to monthly subscribers. For a while now, it’s been common to predict the imminent breakdown of this arrangement. Networks were paying too much for sports rights and other content, charging pay-TV providers ever-escalating fees, which were passed along to consumers, who constantly groused about their outrageous cable bills.
Yet it has worked fine to date, because Americans love their TV, cable outfits have invested in high-speed networks to convey broadband services to the home and it has remained cumbersome or expensive to match the “cable bundle” by purchasing shows or network streams a la carte.
Now, though, with the likes of Netflix Inc. (NFLX) offering a broad menu of shows and movies to 30 million streaming customers and counting, and Amazon.com (AMZN) getting aggressive in the same market, and with nearly every tech company working on a TV device to scale the cable-and-satellite wall, the reckoning point may be near. Meantime, CBS has set the tone for networks with an aggressive posture in demanding more for its content – to the point where some believe regulators might take a dim view of the stance as consumer-unfriendly.
These are the dynamics that led Cablevision Inc. (CVC) Chief Executive James Dolan to tell the Wall Street Journal that “there could come a day” when his company, serving much of the New York suburbs and other markets, stops offering TV service and becomes a broadband utility, charging merely for high-speed network access.
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