February 23, 2020

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

Time Warner Temporarily Removes CBS in Major Cities

But after an exchange of recrimination-filled statements, and less than a half-hour of cable interruption, the cable company announced that it had halted the blackout of the stations at CBS’s request.

The mercurial series of events followed a daylong negotiation, which was full of fits and starts. The two sides negotiated all day and night Monday, after weeks of public posturing over which side was being more unreasonable in its demands over what are known as retransmission fees. Throughout Monday night, a series of one-hour extensions in the talks seemed to portend that an agreement was near.

But at about midnight Eastern time, the talks broke down, and Time Warner announced it would drop CBS shows, like its summer hit “Under the Dome,” from the homes of millions of Time Warner Cable subscribers. In addition, Time Warner Cable said it would remove the Showtime pay cable channel, home of series like “Homeland,” along with the other cable channels owned by CBS, including TMC, Flix and Smithsonian.

In statements, each side blamed the other. Time Warner Cable said, “The outrageous demands for fees by CBS Corporation have forced Time Warner Cable to remove several of its networks and broadcast stations from our customers’ lineups.” It called CBS’s fee demands “out of line and unfair,” and added, “Sooner or later CBS will threaten others and go dark.”

In its early statement, CBS said, “In spite of all our efforts to hammer out a fair agreement, Time Warner Cable has dropped CBS and Showtime from its channel lineup effective midnight. Meanwhile, they continue to engage in a public campaign of disinformation and voodoo mathematics (featuring wildly inflated percentages) while doggedly restating their positions.”

CBS predicted a settlement would eventually be reached but noted the steps it would take to put pressure to make an agreement. “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.”

Time Warner Cable also stressed that CBS shows could still be seen on TVs with antennas, and at cbs.com.

Around 5 a.m. on Tuesday, Time Warner Cable said that a new deadline of 5 p.m. Friday was in place.

The move to drop the CBS stations was unusual because in numerous recent cases, warring sides from cable and broadcasters have struck last-minute deals to avoid any interruption of service.

But Time Warner Cable had made clear it intended to limit the fee increases to substantially less than what CBS was demanding. Time Warner Cable has put the increase at 600 percent, a figure that CBS executives described as laughably inflated and wrong. Though no official numbers were publicly discussed, one executive familiar with CBS’s negotiating position put the increase that CBS was demanding at 20 to 25 percent.

The retransmission fees are actually tied to local stations. Cable systems are being asked to pay for the right to carry those stations on their systems. In the past, broadcast networks were content with only guarantees of carriage by cable companies.

But broadcasters, with the CBS president, Leslie Moonves, a leading figure, have in recent years pushed hard to create the same kind of secondary revenues stream – subscribers’ fees – that cable networks enjoy. And the broadcasters have had increasing success.

With that success has come more opposition from cable outlets, which have balked at paying similar fees to broadcast stations that they pay to cable networks, even though in most cases, the broadcast stations are far more watched by their customers.

In a few cases, these showdowns have resulted in extended blackouts of stations in homes where viewers pay cable fees for their television service. That occurred three years ago, in a standoff between Cablevision and the Fox network.

CBS has never before had such an impasse result in the displacement of its stations off a cable system. Mr. Moonves said earlier on Monday in Los Angeles that he was reluctant to take that step but would if necessary.

Time Warner Cable is taking a risk in suspending CBS stations, but it is counting on being able to convince customers that their monthly fees will rise if the broadcaster wins on its demands for hefty increases.

CBS’s timing in this dispute leaves the network in a somewhat more vulnerable position, because other than “Dome” and the reality program “Big Brother,” it does not have a deep store of shows vital to viewers this summer.

But if the dispute were to drag on, the prospect of viewers’ losing access to N.F.L. games may become a crucial source of leverage for the network.

Article source: http://www.nytimes.com/2013/07/31/business/media/time-warner-cbs.html?partner=rss&emc=rss