Roundup: Time Warner Cable vs. CBS, and the 3 Million Blacked-Out Viewers Caught in the Middle

Roundup: Time Warner Cable vs. CBS, and the 3 Million Blacked-Out Viewers Caught in the Middle

Time Warner Cable customers can forget seeing Stephen King’s “Under the Dome” or “60 Minutes” on CBS or Showtime’s “Ray Donovan” for the foreseeable future. In the latest round in their Battle of the Titans, Time Warner Cable CEO Glenn Britt has sent a letter to CBS CEO Leslie Moonves to resume negotiations immediately with the network and to cease blocking CBS.com content — a move that CBS calls a “sham.” 

Since Time Warner’s black-out of three million customers in Los Angeles, New York and Dallas over CBS programming fees, the web has been quick to point out that neither of these companies are exactly hurting for money, and viewers shouldn’t be put in the middle of the fight. Below, a roundup of opinions on these — as the Daily Beast puts it — “Bickering Behemoths.”

The Hollywood Reporter:

While the letter from Britt seems to be an olive branch, he
also pokes at CBS by adding that Internet customers should not be blocked
“given that CBS uses free public airwaves to broadcast that content and
has public interest obligations that it is plainly flouting.”

UPDATE: In response, CBS issued the following statement:

“Today’s so-called proposal is a sham, a public
relations vehicle designed to distract from the fact that Time Warner Cable is
not negotiating in good faith.  Anyone
familiar with the entertainment business knows that the economics and structure
of the cable industry doesn’t work that way and isn’t likely to for quite some
time. In short, this was an empty gesture from a company that is expert at
them.”

New York Times (David Carr):

Blacked-out Time Warner Cable customers were confronted by
the following propaganda on their screens:

“The outrageous demands from CBS, the owner of Showtime and
TMC, has forced us to remove it from your lineup while we continue to negotiate
for fair and reasonable terms.”

“Forced us. . . .” Really, Time Warner Cable? It seems more
like the business negotiation you were having with a supplier did not yield the
desired result and you’ve chosen to turn up the heat.

Not to be outdone, a statement from CBS made sure everyone
understood that the network was really doing the people’s work in responding to
the news:

“CBS remains resolute in the pursuit of fair compensation
for our programming and will use the full resources available to us to make
sure that Time Warner Cable subscribers are aware of its shortsighted,
anti-consumer strategy.”

Here’s an idea for both parties: Leave us out of it.

The Daily Beast:

Never mind that Time Warner Cable is a $33.5 billion
enterprise that in the second quarter of 2013 posted $481 million in earnings,
exceeding Wall Street’s expectations and sending the stock soaring. Yet a
couple of days ago, TWC chief executive Glenn Britt argued that “if we paid CBS
what they are asking, the next broadcaster or programmer would ask us—and
others like FiOS, AT&T and DirecTV—for even higher prices next time. Cable
TV bills would skyrocket. You’d be mad. We’d be mad. It won’t end well for
anyone.”

CBS, a similar-sized company whose second-quarter earnings
exploded in a record $476 million (and whose CEO, Leslie Moonves, made $62.2
million last year—more than three times Britt’s compensation package), is also
apparently suffering terrible abuse.

New York Times (Alessandra Stanley):

As a subscriber in New York, I felt like the child who walks
into the house to hear Mom explain that Dad is gone and can be visited on
Wednesdays and alternate weekends. Children don’t care why, or who was wronged;
they just don’t want divorce to change anything, and they especially don’t want
to commute across town to see their father.

Plenty of people don’t love “Under the Dome” and rarely
watch CBS (“The Big Bang Theory” reruns can be found on other channels), and
relatively few prefer “CBS This Morning” to “Today” or “Good Morning America.”

But people don’t like to be told they can’t watch CBS
because Time Warner Cable doesn’t want them to.

TIME:

Late Sunday, a resolution to the dispute remained elusive.
In fact, Time Warner Cable and CBS couldn’t even agree on whether any
negotiations were under way, according to the Wall Street Journal. A Time
Warner Cable spokeswoman told the paper that talks were “ongoing,” while CBS
said “there are no negotiations taking place at this time.”

Generally, both sides and consumers lose during a blackout.
Cable and satellite operators see subscriber defections and television channels
suffer steep declines in ratings… Time Warner Cable has warned that it could put another
network into CBS’s channel slot permanently after a blackout. The cable
operator said last week it was in talks with several programmers to take the
slot.

In a phone interview early Sunday morning, Dr. Phillip Pangloss
told me that he believes the skirmish will result in the “best of all possible
worlds” for all parties involved…

Pangloss is the author of the upcoming book “Blackout
Nation: The Inside Story Behind Big Cable’s Programming Renaissance,” which he
wrote after studying the relationship between network programmers like CBS and
distributors like Time Warner Cable for more than seven years. The book takes a
qualitative look at the results of more than two dozen recent blackouts of the
last several years — and what it concludes might surprise you.

In every case, Pangloss says, the temporary blackout of a
broadcast or cable network due to contract negotiations with an operator has
resulted not only in greater profits for all parties involved, but also better
programming and a more valuable cable package for consumers. And he believes
that the most recent skirmish between Time Warner Cable and CBS will be no
different.

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