The next time you tune into your local Fox station and its not there, it may not be because your local cable operator was unable to reach an agreement for retransmission consent of its signal. News broke this week that Fox network has been in discussions with its affiliate group to obtain cash for carriage of network programming on their stations. Apparently the talks are not going well and Fox Network is starting to talk to the affiliate stations directly to reach deals. The affiliate board is accusing the network of taking a “divide and conquer” approach. Meanwhile, Fox asserts that they are just trying to get a deal done before they have to pursue “different distribution channels”. Things are getting contentious and now the negotiations are starting to play out publicly as if this was a battle between the stations and a local cable operator.
It seems that the proverbial shoe is on the other foot and the affiliates are none to happy about it. With most of the affiliates having retransmission consent deals in place with local cable operators and the two national satellite providers, the last thing they need is the network asking for a piece of the action that hasn’t been budgeted for. All this comes at a time when a deal between Fox and Time Warner Cable provides a workaround for the big MSO to get the network programming for up to a year should they encounter an impasse with a local Fox affiliate - lending credence to the “different distribution channels” threat.
To be sure, Fox COO Chase Carey has not been shy in saying that the network will pursue these kinds of retrans revenue sharing arrangements, so it should have come as no surprise to the affiliates. All the same this comes off as another instance where a broadcaster makes the spurious argument that they need subscriber revenues to flow back to them in order to “preserve free broadcast TV” all because they are seeing viewership continue to migrate to cable networks and more time spent online, undermining their advertising based business model.
Yes, this is a private business negotiation, but with TV a seemingly American birthright anything that results in viewers being deprived of network programming inevitably becomes a public policy issue. With retransmission consent having such a high profile, and the FCC slated to take it up at its March meeting, one wonders whether this is the wisest time for Fox to be pursuing this so aggressively. In the end, the affiliates will come to an agreement because they need the programming and Fox can’t pull the plug on a wholesale basis without the risk of being called in front of House and Senate panels to answer for its actions. Inevitably it all flows back to the consumer in the form of higher cable and satellite rates, putting even more pressure on consumers who are on the verge of “cord cutting”.
At this point, the rest of the “Big 4” are sitting back to see how this develops. While there are still a lot of unknowns as far as how this will play out, one thing is for certain, if this proves successful for Fox, watch for the rest to follow suit.
Friday, February 11, 2011
Friday, January 7, 2011
DISH Enables TV Everywhere to Android Devices
While Comcast was making noise in advance of CES with a VOD iPad app, DISH Network had their own announcement as the satcaster unveiled its Android app that enables Google enabled Smartphone users to access DISH programming. A former professional gambler, DISH CEO Charlie Ergen has undoubtedly raised the stakes in the TV Everywhere game. While the Comcast model will provide roughly 3000 hours of VOD content plus some streaming networks, the DISH service goes one better and allows customers access to their entire line-up of channels and all of their DVR content via a Sling enabled set top box, allowing for ultimate flexibility.
At a time when cord cutting has become a primary concern among multichannel providers, operators are looking to TV Everywhere as part of the solution to deal with the estimated quarter million video subscribers lost by the industry in the second and third quarters of 2010. While the multichannel sector as a whole as seen subscriber losses, Verizon, AT&T and DirecTV have seen gains. DISH is down about 50k subs in 2 and 3Q while Comcast is down over half a million video subscribers in the same period.
Comcast’s iPad VOD and streaming app will not launch until later this year, so the jury is still out as to whether its streaming to tablets will be enough of a silver bullet to hold on to subscribers or whether digital customers will continue to vote with their feet (and wallets) that they see better value in getting a limited amount of programming for less, or even free, from on-line options like of Netflix and Hulu.
At a time when cord cutting has become a primary concern among multichannel providers, operators are looking to TV Everywhere as part of the solution to deal with the estimated quarter million video subscribers lost by the industry in the second and third quarters of 2010. While the multichannel sector as a whole as seen subscriber losses, Verizon, AT&T and DirecTV have seen gains. DISH is down about 50k subs in 2 and 3Q while Comcast is down over half a million video subscribers in the same period.
Comcast’s iPad VOD and streaming app will not launch until later this year, so the jury is still out as to whether its streaming to tablets will be enough of a silver bullet to hold on to subscribers or whether digital customers will continue to vote with their feet (and wallets) that they see better value in getting a limited amount of programming for less, or even free, from on-line options like of Netflix and Hulu.
Wednesday, January 5, 2011
Comcast Announces iPAD Video App
Comcast CEO Brian Roberts got a jump on everyone at CES with an announcement on the eve of the 2011 show. It seems that Comcast will be making nearly 3000 hours of VOD content available for streaming on iPADs later this year with enhancements that will include the ability for users to tap into their social networks. In doing so, Comcast is the first cable MSO to truly take the concept of "TV Everywhere" to heart. Until now, MSOs that have launched so called "TV Everywhere" services have made their VOD content available on their branded websites in an effort to thwart other online video providers like Hulu and Netflix that have been chipping away at their subsription revenue by enabling cord cutting (more on that some other time). This move eliminates the inherent limitation of having a "TV Everywhere" product limited to home PCs and laptops and is an effort to shore up their Xfinity digital subscriber base among iPAD users; those who are aguably the early adopters who are the most prone to being cord-cutters.
Although limited to the iPAD device for now, this app is a great start to the "unleashing" or unteathering of TV Everwhere. For now Comcast is working where the content rights allow them, but I expect that a smartphone app is not too far down the road, of course, programmer rights permitting.
Although limited to the iPAD device for now, this app is a great start to the "unleashing" or unteathering of TV Everwhere. For now Comcast is working where the content rights allow them, but I expect that a smartphone app is not too far down the road, of course, programmer rights permitting.
Tuesday, December 21, 2010
Fox Network Is Letting Time Warner Cable Do What?
Winter Solstice has come and gone. As the hours of darkness shorten, the coldest days of winter are still to come. Somehow the impending gloom of winter sets just the right mood for the ongoing retransmission consent and content licensing tussles that come around this time of year.
Time Warner Cable is shaking things up with Smith Broadcasting and Sinclair. You may remember a while back, it was Sinclair who was involved in very nasty and public negotiations with Mediacom. The big issue between Time Warner Cable and Sinclair is that Sinclair is tying retransmission consent for their CW stations to retransmission consent for their Fox affiliated stations. While the concept of tying is nothing new in the content distribution world (most cable network groups require carriage of multiple services by cable operators, much like the way studios license packages of movies to broadcasters or premium services) it somehow takes on a different flavor when it is coming from the broadcasters. Time Warner would rather have the option of not carrying the CW stations or forcing them to elect must carry status with no payment required.
What make the negotiations different this time around is that Time Warner Cable has a card up their sleeve - apparent rights from Fox to carry network programming via an "insurance feed" or “cooling off feed” for up to a year. Understandably, this has left many local Fox affiliates feeling a bit confused and thrown under the bus. It is a surprising development in that it is the first time that a broadcast network has given these kinds of rights to cable operators. Just as curious is that the provision of a “cooling off” feed was not mentioned by either Time Warner Cable CEO Glenn Britt or Fox Broadcasting COO Chase Carey as part of their testimony during last month’s hearing on retransmission consent. Surely pointing to this as an example of a creative market based solution would have gained points with lawmakers who were grilling them that day.
To be sure, it’s not perfect. The deal allows Time Warner to get the national programming from the local stations feed for a reported 70 cents per subscriber per month, as long as the local affiliate OK's it. Truth be told, it is mainly the network programming that people are tuning in for anyway. The arrangement still allows the local station to deny access to its local news programming and syndicated fare. The 70 cents would then be split between Fox and the local affiliate. The big "gotcha", of course, is that the local affiliate still has the option of saying no and blocking the feed. All the same, it is something. Nonetheless, Sincliar is reportedly not interested in the option. Apparently they are not too thrilled about their take of the 70 cents.
While the local affiliate still holds the cards, it does give the network some political cover. The larger question is whether other broadcast groups will offer similar rights to other cable operators, telephone companies or satellite distributors. As the arrangement stands now, it is not a game changer, but there is a potential that the playing field could shift subtlely with broadcast affiliates left questioning where the allegiances of the network suits really lie. Does it get any colder than that?
Time Warner Cable is shaking things up with Smith Broadcasting and Sinclair. You may remember a while back, it was Sinclair who was involved in very nasty and public negotiations with Mediacom. The big issue between Time Warner Cable and Sinclair is that Sinclair is tying retransmission consent for their CW stations to retransmission consent for their Fox affiliated stations. While the concept of tying is nothing new in the content distribution world (most cable network groups require carriage of multiple services by cable operators, much like the way studios license packages of movies to broadcasters or premium services) it somehow takes on a different flavor when it is coming from the broadcasters. Time Warner would rather have the option of not carrying the CW stations or forcing them to elect must carry status with no payment required.
What make the negotiations different this time around is that Time Warner Cable has a card up their sleeve - apparent rights from Fox to carry network programming via an "insurance feed" or “cooling off feed” for up to a year. Understandably, this has left many local Fox affiliates feeling a bit confused and thrown under the bus. It is a surprising development in that it is the first time that a broadcast network has given these kinds of rights to cable operators. Just as curious is that the provision of a “cooling off” feed was not mentioned by either Time Warner Cable CEO Glenn Britt or Fox Broadcasting COO Chase Carey as part of their testimony during last month’s hearing on retransmission consent. Surely pointing to this as an example of a creative market based solution would have gained points with lawmakers who were grilling them that day.
To be sure, it’s not perfect. The deal allows Time Warner to get the national programming from the local stations feed for a reported 70 cents per subscriber per month, as long as the local affiliate OK's it. Truth be told, it is mainly the network programming that people are tuning in for anyway. The arrangement still allows the local station to deny access to its local news programming and syndicated fare. The 70 cents would then be split between Fox and the local affiliate. The big "gotcha", of course, is that the local affiliate still has the option of saying no and blocking the feed. All the same, it is something. Nonetheless, Sincliar is reportedly not interested in the option. Apparently they are not too thrilled about their take of the 70 cents.
While the local affiliate still holds the cards, it does give the network some political cover. The larger question is whether other broadcast groups will offer similar rights to other cable operators, telephone companies or satellite distributors. As the arrangement stands now, it is not a game changer, but there is a potential that the playing field could shift subtlely with broadcast affiliates left questioning where the allegiances of the network suits really lie. Does it get any colder than that?
Wednesday, December 1, 2010
Sweeney: ABC – Google TV Deal “Not Close”
In an interview with Reuters, Disney TV chief Anne Sweeney said that although they are in discussions with Google and have seen several demonstrations, ABC is "not close" to doing a deal to provide its content to the Google TV platform. This comes on the heels of both CBS and NBC blocking their content from Google TV.
Sweeney mentioned that piracy is one of the primary concerns, going so far as to say that it was unacceptable to ABC that the Google search platform present pirate sites when consumers search for ABC content on the web. Further, Sweeney indicated that ABC's web strategy is to provide limited programming from current seasons with wider access to prior season programming in order to drive value to the programming that is being shown on the broadcast network - moving the content through windows in a similar fashion as feature films.
In an age of instant Internet gratification and with the lesson of Napster fresh in their memories, it is little wonder that piracy is an issue for the broadcasters. They are being pressured by affiliates and cable operators who are telling them that putting content on the Internet lessens its value. Meanwhile, Gen X, Y and Millennial consumers are accustomed to having content served up at their convenience at a time and place and on the device of their choosing. They are less concerned with how it gets to them and not even remotely concerned with the content owners' business model.
Network executive like Sweeney are paid to follow the money. They are not going to jeopardize broadcast and cable dollars for digital pennies. Meanwhile, a significant portion of the Internet generation believes that content wants to be free; an attitude that undermines the business model of the content owners.
For now it looks like Google TV is on the market with only a limited amount of content. Absent providing "one stop shopping" with a line-up of content that more closely mirrors that of cable and satellite providers, Google TV is destined to be a niche curiosity product. Major content owners will not give away their product cheaply and will continue to demand assurances of security. Until Google can address the "fear of Napsterization", the big players will take meeting but won't be signing any deals soon.
Sweeney mentioned that piracy is one of the primary concerns, going so far as to say that it was unacceptable to ABC that the Google search platform present pirate sites when consumers search for ABC content on the web. Further, Sweeney indicated that ABC's web strategy is to provide limited programming from current seasons with wider access to prior season programming in order to drive value to the programming that is being shown on the broadcast network - moving the content through windows in a similar fashion as feature films.
In an age of instant Internet gratification and with the lesson of Napster fresh in their memories, it is little wonder that piracy is an issue for the broadcasters. They are being pressured by affiliates and cable operators who are telling them that putting content on the Internet lessens its value. Meanwhile, Gen X, Y and Millennial consumers are accustomed to having content served up at their convenience at a time and place and on the device of their choosing. They are less concerned with how it gets to them and not even remotely concerned with the content owners' business model.
Network executive like Sweeney are paid to follow the money. They are not going to jeopardize broadcast and cable dollars for digital pennies. Meanwhile, a significant portion of the Internet generation believes that content wants to be free; an attitude that undermines the business model of the content owners.
For now it looks like Google TV is on the market with only a limited amount of content. Absent providing "one stop shopping" with a line-up of content that more closely mirrors that of cable and satellite providers, Google TV is destined to be a niche curiosity product. Major content owners will not give away their product cheaply and will continue to demand assurances of security. Until Google can address the "fear of Napsterization", the big players will take meeting but won't be signing any deals soon.
Tuesday, November 23, 2010
Retrans Recap
So, the Retransmission Consent hearings are over (for now) and all of the usual suspects got to have their say on the issue. Keeping to the script, the MSOs asked for some changes in the regime, arguing that Retransmission Consent is another in the long litany of special privileges that broadcasters enjoy. Broadcasters insisted that they need a dual revenue stream to compete. Small programmers argued that the tying involved in many Retransmission Consent agreements makes it difficult for them to gain carriage. For the most part, the hearing was predictable and civil. It was, however, suprising to hear Jay Rockefeller (D WV) rant on the record about the polarizing nature of Fox News and MSNBC and his wish that the FCC could somehow make them go away. It was no suprise either that several Senators suggested the popular notion that the time may have come for the industry to consider a la carte pricing models. Other than that there was not much newsworthy that came of it as John Kerry (D MA) tried to keep the hearing focused on finding a solution to keep broadcast signals on cable systems during retransmission consent negotiations.
It's always easy to tell who benefits the most from the status quo - it's the guy who defends it the most vigorously. That was the role that Chase Carey from Fox played. Carey insisted that taking away the ability to deny carriage strips him of his leverage and eliminates any incentive for a cable operator to get a deal done. He also pointed fingers at Cablevision as the party that used it subscribers to win political gain. Well, there was a hearing after all.
More than a few eyebrows were raised by the fact that different cable providers in the same market can be charged different rates by the same broadcaster for the same signal. In an effort to bring a modicum of transparency to the process, it was suggested that the numbers involved no longer be subject to confidentiality (gasp!).
More than once the lawmakers suggested (or threatened) that if "the market" can't figure things out on their own, then Washington will get involved. With that stance it won't be a suprise that there will be more high profile retransmission consent disputes that result in temporary drops of broadcast feeds. For now it is hard to see what the appetite inside the beltway is for taking another swipe at cable regulation given the much larger problems that the country faces. One thing is for sure, once the ball gets rolling it may be a matter of "being careful what you wish for". Washington is a sausage factory. You can start out with the best of intentions, but along the way it inevitably gets ground up and flavoered beyond all recognition. But for now Retransmission Consent is like the weather, everyone talks about it but nobody does anything about it.
It's always easy to tell who benefits the most from the status quo - it's the guy who defends it the most vigorously. That was the role that Chase Carey from Fox played. Carey insisted that taking away the ability to deny carriage strips him of his leverage and eliminates any incentive for a cable operator to get a deal done. He also pointed fingers at Cablevision as the party that used it subscribers to win political gain. Well, there was a hearing after all.
More than a few eyebrows were raised by the fact that different cable providers in the same market can be charged different rates by the same broadcaster for the same signal. In an effort to bring a modicum of transparency to the process, it was suggested that the numbers involved no longer be subject to confidentiality (gasp!).
More than once the lawmakers suggested (or threatened) that if "the market" can't figure things out on their own, then Washington will get involved. With that stance it won't be a suprise that there will be more high profile retransmission consent disputes that result in temporary drops of broadcast feeds. For now it is hard to see what the appetite inside the beltway is for taking another swipe at cable regulation given the much larger problems that the country faces. One thing is for sure, once the ball gets rolling it may be a matter of "being careful what you wish for". Washington is a sausage factory. You can start out with the best of intentions, but along the way it inevitably gets ground up and flavoered beyond all recognition. But for now Retransmission Consent is like the weather, everyone talks about it but nobody does anything about it.
Wednesday, October 27, 2010
Cablevision vs. FOX: The Good, The Bad and The Ugly
October is winding down, trees are ablaze in orange and red, football season is in full swing while baseball season has boiled down to two teams, but it seems like everyone’s attention is held by the animosity and accusations that are being flung like so much mess in the primate house. No, I’m not talking about the waning days of highly contentious mid-term elections; I’m talking about the very public dispute between Fox and Cablevision.
It’s a week after local Fox stations going dark on Cablevision systems and the rhetoric is getting even hotter. Politicians ranging from NJ Governor Chris Christie and MA Senator John Kerry have weighed in. Meanwhile, Cablevision subscribers have been without the post season play of their beloved New York Yankees and may soon miss out on the World Series. I don’t think this is what Washington had in mind when the retrans rules were written. They expected reasonable people to come to a business agreement. Instead, what they are seeing are media moguls tussling over money while the consumer is held hostage.
Now the latest developments have both sides crying foul and hitting the press with both guns blazing; Cablevision accusing Fox of not negotiating in good faith by making “take it or leave it” offers and Fox accusing Cablevision of asking for preferential treatment (don’t get me started on MFNs) and manipulating the whole process to bring about a political resolution and a change in the law. Cablevision is making hay of Fox’s refusal to submit to binding arbitration. There was even a point where Cablevision subscribers were denied access to Fox programming on the internet. Now Fox is threatening to sue Cablevision, asserting that the MSOs phone reps are telling subscribers they can get their favorite Fox programming by accessing pirate websites. While there may be a grain of truth to each of the accusations, the amplification of the distortions makes each side’s argument look like signs at a Tea Party rally. There seems to be no end to the lengths that both parties will go to make their respective points. Jimmy Dolan even suggested a meeting be held with himself, FOX CEO Chase Carey and the FCC to hammer out a deal.
So there you have it. Another carriage dispute made very public as the cable and broadcast industry both air some very dirty laundry. Who’s right? Who’s wrong? How long will it go on? Who knows? Programming deals are never easy, and retrans deals are probably the toughest of all. While there may be something for the cable guys to gain by making the process political theater, in the short them the only thing to be had is consumer disgust. In the mean time Dolan watching continues to be one of the industry’s favorite spectator sports.
It’s a week after local Fox stations going dark on Cablevision systems and the rhetoric is getting even hotter. Politicians ranging from NJ Governor Chris Christie and MA Senator John Kerry have weighed in. Meanwhile, Cablevision subscribers have been without the post season play of their beloved New York Yankees and may soon miss out on the World Series. I don’t think this is what Washington had in mind when the retrans rules were written. They expected reasonable people to come to a business agreement. Instead, what they are seeing are media moguls tussling over money while the consumer is held hostage.
Now the latest developments have both sides crying foul and hitting the press with both guns blazing; Cablevision accusing Fox of not negotiating in good faith by making “take it or leave it” offers and Fox accusing Cablevision of asking for preferential treatment (don’t get me started on MFNs) and manipulating the whole process to bring about a political resolution and a change in the law. Cablevision is making hay of Fox’s refusal to submit to binding arbitration. There was even a point where Cablevision subscribers were denied access to Fox programming on the internet. Now Fox is threatening to sue Cablevision, asserting that the MSOs phone reps are telling subscribers they can get their favorite Fox programming by accessing pirate websites. While there may be a grain of truth to each of the accusations, the amplification of the distortions makes each side’s argument look like signs at a Tea Party rally. There seems to be no end to the lengths that both parties will go to make their respective points. Jimmy Dolan even suggested a meeting be held with himself, FOX CEO Chase Carey and the FCC to hammer out a deal.
So there you have it. Another carriage dispute made very public as the cable and broadcast industry both air some very dirty laundry. Who’s right? Who’s wrong? How long will it go on? Who knows? Programming deals are never easy, and retrans deals are probably the toughest of all. While there may be something for the cable guys to gain by making the process political theater, in the short them the only thing to be had is consumer disgust. In the mean time Dolan watching continues to be one of the industry’s favorite spectator sports.
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