Commentary
Time Warner & Fox Should Give Viewers The Real Bottom-Line, A-La-Carte Score
- by Wayne Friedman , Staff Writer, December 17, 2009
This could be the scenario should News Corp. and Time Warner Cable's testy negotiations explode into a full-blown war -- one that could result in 15 Fox-owned stations being dropped. (The Fox network comprises 27 Fox-owned TV stations and 150-plus affiliate stations.)
The contract is due to end Dec. 31. The expiring agreement includes carriage for other networks, including FX and Fox Sports regional networks.
News Corp. wants a bold $1 a cable subscriber per month, believing that its stations are worth at least as much -- if not more -- than many cable networks. Top cable network, ESPN, for example, gets $4 a subscriber. Recent estimates were that new retrans deals could give broadcast TV stations some 50 cents a subscriber.
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NBC and CBS executives are keenly watching this battle, and could alter the strategies for their own future retransmission negotiations. All broadcast networks believe their financial models need to change -- radically - for them to survived.
Time Warner has been doing some unusual marketing to get ahead of the typical bad PR effects that happen with these negotiations. Under its RollOverOrGetTough.com, it tries not to finger-point any bad guys in this battle. Rather, it asks customers for ideas.
All this in preparation for those phone calls and emails when Time Warner customers can't get to see those early-round results of singing knuckleheads on "Idol," or that late-fourth-quarter playoff game comeback by a NFL team for its NFL Sunday game coverage.
The real question Time Warner -- and, to a lesser extent, News Corp. -- isn't asking customers is this: What does a particular show mean to you, right now, on a Sunday afternoon in January, or a Tuesday evening in February?
As an experiment, Time Warner should offer up a multiple-choice question as an experiment to give cable subscribers some perspective: What would you pay to watch "Idol" for a particular evening? $1.99? $2.99? 50 cents?
Viewers might not bite -- or perhaps take it the wrong way, especially when they are already paying $75 a month for hundreds of channels of TV programming, most of it stuff they don't view regularly.
But it would give customers more to think about when deciding how they want video programming packaged -- and how much to pay for it -- in the future.
A la carte programming, anyone? Or perhaps a fuller, more-costly TV meal?
Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.
"Under its RollOverOrGetTough.com, it tries not to finger-point any bad guys in this battle." Really? Just the name of the website is loaded. If one chooses "roll over", you get a page asking you why not get tough, and if one chooses "get tough" you are congratulated for standing up to evil price-gouging cable companies. Regardless of which side you are on, it is such blatant TWC propaganda it's hard to take seriously.
I, for one, would welcome a-la-carte pricing. And not just for cable networks, but for specific programs.
I find it abhorrent that I have to pay $4 a month for a sports channel I NEVER watch just to get the dozen or so cable channels I do watch.
On the other hand, I would gladly subscribe to a new season of, say, Battlestar Galactica, Life or Dollhouse if it meant giving those show a new lease on life. The old network model of television is dead, and it's about time. We have the technology ain place for producers to sell shows directly to viewers; we just need a visionary to make it happen. Is Steve Jobs listening??
If cable starts talking al a carte, then I expect Fox to counter with facts how cable already pays ESPN, which is watched by a minority of viewers, $3 a month per subscriber. (How many fixed-income little old ladies would be thrilled to know a huge chunk of their cable bill subsidizes the viewing of their neighbor with the loud muffler?) Then, maybe, the ESPN fans will also realize that their al a carte cable bill would go up substantially, once the cost of expensive sports is paid per-user rather than by the across-the-board scheme that spreads the costs. Fox could argue, at least its programming is popular to a wide audience, not just sports fans, so costs are tiny comparatively. It seems to me that cable didn't mind stealing over-the-air programming when stations were fat cats. But now the cable operators have the license to print money, so the shoe is on the other foot.
OK, it's not just the little old ladies who resent paying for sports. Thanks, Michael.
Whatever happens, it is going to cost the consumer more for less. Rather than a-la-carte pricing, I would like a-la-carte minusing. Fat chance. Fat cats. Most all of us who are reading MediaPost do not realize regularly that $75+ for cable can feed a family of 4 for a week? How many homes (single and multiple family homes) can just plug in a TV set a get a few choices?
Fox wants per sub fees like a cable network...are they willing to take 2 minutes of local ad inventory away from their broadcast affiliates and give it to the cable operators? Because Comcast, Time Warner, Cox, et al would love to have that programming to sell.........you know, just like a cable network.
Also, people who live in glass houses...FX is a superb cable network that produces excellent programming because of its dual revenue stream. It also has a relatively lower brand-recognition profile when compared to ESPN, Discovery, CNN, MTV, heck, even Weather Channel. I don't think they would fare all that well in an a la carte world, even though their programming is deserving. If I asked my parents whether they would include FX in their a la carte menu, they would reply, "What's FX?". Without my parents' 25 cents/month, (and by extension, a significantly lowered affiliate revenue stream), there is NO WAY FX could afford to produce gems like Nip/Tuck, Rescue Me, Damages, Sunny in Philadelphia, The Shield, etc.
I, for one, would welcome a reduction in my cable bill if it meant that Fox would be removed from my channel lineup. I make a special point of avoiding American Idol, since I believe that once they're exposed to it, brain cells die.
As soon as we're forced to confront the situation and apply specific costs to specific content, my guess is we'll learn very quickly how to get along with a lot less television.
Live without Idol? Let me ask a simple question: Who was the winner three seasons ago? I can't remember either.