TWC and CBS: What are you thinking?

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For a major network to be pulled from a  cable channel line-up is pretty unusual, yet that’s  exactly what  is happening this weekend in several major cities across the US.  According to USA Today, CBS will be  dropped from Time Warner Cable in New York, LA, Dallas, Chicago , Boston, Pittsburgh, Denver and Detroit.

The reason for the dispute is simple – the two sides are very far apart on the price of a retransmission  fee, the fee a cable operator pays the broadcaster. These dollar numbers are the most interesting part of the story, especially this statement:

“CBS gets paid about 88 cents per cable subscriber per month for retransmission rights”.

So is 88 cents in the ballpark of what CBS would charge us to subscribe to their service a la carte? The technology  to migrate CBS from a cable channel to a strictly OTT channel is ready to go, e.g. Roku, Apple TV, and newcomer Chromecast.

The risky part for both players is this:  TWC has 11.7 M video subscribers, and not all of them are going to make a switch requiring some new piece of hardware.  Many of those  11.7M will change to another channel. But others, say people that were looking forward to watching Tiger Woods finish the weekend at the WGC Bridgestone Invitational, might get irritated and think about switching to DirecTV.

Risky business indeed. Long term fights like this could push the consumer toward cord cutting alternatives. That might be a win for the consumer. TWC and CBS would lose millions. What are they thinking?

People in NY and LA won't be watching rounds 3 and 4 of WGC this weekend (Courtesy of golfchannel.com)

People in NY and LA won’t be watching rounds 3 and 4 of WGC this weekend (Courtesy of golfchannel.com)

 

Update 8-23-13: TWC handing out free basic antennas.


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13 Responses to TWC and CBS: What are you thinking?

  1. Len Mullen says:

    So much implied with this. $0.88 / month is about 1/9 of what netflix, aereo, and hulu charge — though the aereo charge is per ‘tuner’ so you may end up paying more. Seems like a lot to me. Still, CBS is dominant right now, so this is a good time to play hardball. Rumors CBS is seeking $2/month per subscriber. Two interesting quotes…

    “Right now over 85% of our viewing is done through satellite, cable, or the phone companies. The remaining 15% are not the most advertiser friendly, appealing to advertising.”

    The idea that cable cutters are less affluent or spend less is wishful thinking. Cable cutters are DISSATISFIED CUSTOMERS. Until premium providers come to grips with that and begin to address the real problem, they will continue to make the same mistakes and alienate subscribers.

    TWC and others have said that NYC viewers who lose CBS on cable might consider subscribing to Aereo, which streams broadcast signals without compensating stations. But Moonves says “we don’t think it’s catching on at all.”

    I don’t know what Aereo is doing, but a lot of things are starting to catch. Plex, Playon, Netflix, and Amazon are all getting eyes. I did not consider these things until we had a week long blackout. Within six months of the forced trial, I had cut my cable. If these rolling blackouts become common place, people will try alternatives.

    One more comment on CBS. I love a lot of the shows on CBS, but I don’t watch them on CBS. CBS moves, repeats, overlays, and otherwise disrupts my viewing so routinely that I only record shows that are in syndication.

    When Big Bang Theory comes out as a boxed set, I will buy the set, format shift the files, and enjoy the series when and where I like.

    We have a lot of choices. TWC has a lot of advantages in the market place right now, but one of them is not a captive audience. Same for CBS.

  2. Greg says:

    Thanks Len. I agree. Cord cutters aren’t poor, they’re unhappy.

    I think the number one reason to cut the cord is the high price for channels you don’t want. But what will force the un-bundling?

    The elephant in the room is NFL. Checking in on my own team, I see 11 of 17 games on CBS. I can tell by the stats on my website that NFL is the number one concern of cord cutters. Terms like “NFL on ROKU” etc are the number one hit.

    Putting up an antenna is a no-brainer, yet somehow a lot of the population has forgotten this old technology. Or maybe they just don’t want some complicated combination of OTA OTT. That creates an opportunity for some disruptive technology.

    TWC needs CBS as it stands today. I’m kind of surprised they’d recommend Aereo. It will be interesting to see what happens when September arrives.

  3. Len Mullen says:

    The timing of this is not coincidental. This is a dead time of the year for television. All will be settled before football and new episodes of Big Bang arrive.

    Both parties are trying to enlist their constituents in the battle. Instead, put an antenna in your attic or give Aereo a go.

  4. Len Mullen says:

    My top ten (descending) are…

    youtube on roku
    roku youtube
    roku youtube channel
    roku youtube hack
    youtube roku
    youtube on roku 2013
    youtube roku channel
    roku private channels youtube
    roku and youtube
    youtube for roku 2013

    What people are looking for really exposes the weaknesses of the Roku — no sports, no youtube, and no live programming.

  5. Bob says:

    Another alternative is filmon.com, they carry the major networks and have a free dvr, and higher quality for a small fee. In my area, Ct., they carry affiliates from NYC, Boston, and D.C., plus PBS in NY. I have a friend who moved to NYC recently and he gets over 50 channels over the air. Folks can survive no CBS on TW with just a little innovation.

    • Greg says:

      Bob,
      Where does filmon get their content?

    • Len Mullen says:

      filmon is another banned roku channel, btw.

      • Bob says:

        Yes it is, I hardly ever use my Roku anymore, the Google Logitech Revue which failed miserably for most has saved me a lot of money, it’s a pain sometimes, but it took over the Roku a long time ago for me. When Revue can’t do what I want I connect my pc and that works even better.

        • Len Mullen says:

          We still use Rokus, but we never buy or subscribe to channels. They are simply too shady. Until you buy the box, they stream a thousand channels. Once the check clears, they only make the box — and only stand behind it for 90 days. They are so secretive about everything, it’s very difficult to troubleshoot anything. The last two updates have each made the Rokus worse. You cannot refuse or roll back the updates.

          So, I spent $293 on Rokus (XSx2+LTx3) which included a lifetime subscription to Playon. For that, I get a decent plex/netflix/playon client and hulu, food network, and history channel. No complaints.

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