April 20, 2024

After a Fee Dispute With Time Warner Cable, CBS Goes Dark for Three Million Viewers

CBS stations went black just after 5 p.m. Eastern time. Both sides then issued statements blaming the other for being unreasonable in the negotiations, which were extended from Monday.

The dispute centers on what are known as retransmission fees, which cable companies have increasingly been compelled to pay to broadcasters, despite vigorous protest. CBS’s president, Leslie Moonves, has been a leader in seeking retransmission fees for broadcasters.

The decision to black out the stations means that Time Warner Cable subscribers will not be able to watch CBS programming until a deal is reached. In the past, subscribers have reacted with anger at such suspensions, but generally because they have missed specific programs. In this case, the summer programming roster does not contain many highly popular shows that might drive a settlement. CBS’s biggest appeal this summer is from the show “Under the Dome,” which will not have a new episode until Monday.

But the network does have the P.G.A. golf championship coming in a week. CBS emphasized on Friday that this week’s P.G.A. event was being led by Tiger Woods, who always draws viewers. And CBS, which broadcasts two soap operas, is also likely to gain support from those viewers.

Further down the road is the N.F.L. season, which might be a driving factor in why Time Warner Cable acted now.

Richard Greenfield, a media analyst who follows the company for BTIG Research, said the cable company was in “a once-in-a-lifetime position” to fight this battle because at the moment it does not face the overwhelming leverage of N.F.L. games and the most popular prime-time shows.

In addition, two top series on the Showtime network, owned by CBS, “Dexter” (which is in its final season) and “Ray Donovan,” are now also off the air, even though customers pay a separate fee for them. Time Warner Cable said it would offer a rebate to Showtime subscribers, as well as access to other subscription channels like Starz.

Time Warner Cable has insisted that the fee increases that CBS is asking for are unreasonable; CBS has argued it provides far more value than many cable networks that require much higher fees. Some reports have said CBS is asking for an increase of about 100 percent, to $2 a subscriber, from $1.

A spokesman for the Federal Communications Commission said that the agency was disappointed that the companies had not reached an agreement. “We urge all parties involved to resolve this situation as soon as possible.”

Despite recriminations on Friday from both sides, the negotiations are expected to resume as soon as Monday. That does not mean a quick settlement is likely, however. Mr. Greenfield said he could foresee CBS’s being dark “six weeks, if not more.” An executive close to the CBS side of the talks predicted 10 to 14 days.

In the meantime, CBS is sending messages on the radio and through other outlets urging viewers to complain to Time Warner Cable. The cable company, for its part, was telling customers to buy an antenna or sign up for Aereo, the new service that offers broadcast signals, and was also urging its customers to watch the missing CBS shows through streaming Web sites.

But for customers with Time Warner Cable broadband on Friday, CBS.com was blocking the streaming of shows, instead posting messages.

In almost every previous showdown over retransmission fees, the cable company’s stand has crumbled in short order. Mr. Greenfield said this time could be different because Time Warner Cable could take steps like appealing to Congress and selling CBS’s channel position to another bidder.

CBS stressed that it had never been taken off the air in a retransmission dispute and that it had not stopped offering extensions to keep the talks going.

Maureen Huff, a spokeswoman for Time Warner Cable, said, “We’ve accepted numerous extensions at this point, but it’s become clear that no matter how much time we give them, they’re not willing to come to reasonable terms.”

Brian Stelter contributed reporting.

This article has been revised to reflect the following correction:

Correction: August 2, 2013

Because of an editing error, an earlier version of this article misstated at one point which company suspended the service. It was Time Warner Cable, not CBS.

Article source: http://www.nytimes.com/2013/08/03/business/media/time-warner-cable-removes-cbs-in-3-big-markets.html?partner=rss&emc=rss