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Network versus cable provider: Time Warner and CBS still in negotiations

The squabble over contract agreements between CBS and Time Warner has yet to come to an end, with the cable subscribers taking the brunt of the blow during the weeklong blackout.

The drama ensued because CBS asked for a subscriber increase from $1 to $2 in retransmission fees, which Time Warner believes is in excess. CBS has argued that since ESPN, which has a smaller audience, makes $5, $2 is a fair request. With CBS programming still unavailable to Time Warner subscribers, it’s obvious they don’t agree.

This isn’t the first of this kind of battle, although certainly one of the largest, noted Bob Papper, professor and chair at Hofstra University’s journalism, media studies and public relations department. “Time Warner Company includes the biggest markets in the country, so I think we’re talking more audience at stake at one time – and we’re talking the number one network,” he said.

Other networks and cable providers to duke it out at the consumer’s expense include Dish Network, which blacked out AMC in an epic legal battle last year that lasted almost four months before it was resolved. Around the same time DirecTV customers also experienced a blackout of channels, such as Nickelodeon and MTV in a dispute with Viacom. Other quarrels similar to CBS and Time Warner where timing was a factor include the Cablevision blackout of Fox channels in 2010, which lasted for two weeks and coincided with the World Series. The Cablevision and ABC blackout, also in 2010, was lifted just minutes before “The Oscars” started. According to writer Josef Adalian, the rash of disputes between networks and cable providers might be an omen, making more room for “cord-cutters,” such as Netflix and iTunes. With the number of U.S. homes paying for TV reportedly shrinking (approximately 3 percent this year), his prediction might not be too far off the mark.

But while customers everywhere are bemoaning the inability to tune into “Dexter” or “Homeland,” newscasts are taking a hit in viewership, which in a struggling industry is not a positive impact. “It lowers the audience because of the markets that are part of the blackout, and there’s certainly some loss associated with that,” said Bob Papper. “But Scott Pelley  hasn’t been on the news in a week or more as it is; ‘60 Minutes’ is all reruns.  The real impact comes next month – if the two sides haven’t settled by then.”

One would think Time Warner would be afraid it might lose customers given they are on the receiving end of this battle, but Papper doesn’t believe they’ll really feel the heat until the NFL season starts next month. “Right now, we’re still mostly reruns (‘Under the Dome’ notwithstanding).  But even pre-season NFL will take a toll, and I would expect significant defections of this gets into the regular season of the NFL and the new fall season. CBS really is in a position of strength here,” he said.

–Katrina M. Mendolera

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