TV Brands Can Be Hurt Long-Term In The Retrans Wars
What brands get hurt here? For the Fox Network/Cablevision Systems Corp battle, we see in a Cablevision print advertisement a sad-sack of an NFL fanatic sitting in front of his TV set (we're guessing) wondering if his football games will be around in a couple of week or even that of the World Series.
All this seems to be more effective than the Fox efforts -- which go into not-all-that-clear business logic.
Fox has a print ad that shows the side-by-side results of Cablevision paying (essentially itself) $124 million for MSG sports networks, on one side, and nothing, on the other side for a local New York Fox station. (In press reports, Fox supposedly wants $150 million from the cable operator , which is double that of its current one-year deal $75 million; previously, Fox presumably got nothing.)
Average consumers may feel that paying for expensive multichannel TV programming channels is enough -- and question why they are being dragged into this. When there is no TV, they get pissed. Does the Cablevision or Fox brand take the brunt of this? I haven't taken a poll -- but I'm guessing when the dust settles in the deals, it's the cable operator that could be feeling the pain.
While Cablevision's marketing campaign maybe seemingly more effective, there is always the underlying fact -- kind of the stereotype bad consumer service image about cable operators -- that they are a necessary utility that never completely gets consumers.
All this is doubly bad news now that savvy TV consumers know they can get their TV programming elsewhere: satellite, IPTV, the Internet, and new local digital over-the-air broadcasters.
Higher-gloss TV brands, like Fox, will win out in these situations, especially this time of year with the World Series and NFL programming in full swing. Some intelligent consumers may be slightly pissed at the TV network if they have to go searching elsewhere. But it won't last that long.
Cablevision Systems? Few might not associate it with networks like AMC, WE tv, and IFC. Sure "Mad Men" is important -- but in the face of the World Series, the NFL, and, of course, the most-viewed TV show in the U.S., "American Idol", how can one compete?
In the end consumers might think, "this is just a business-to-business decision" or "I have other options."
While business-savvy marketers may side with Cablevision, no one in these threatening deflationary times should be getting double the price of a year ago -- for anything. Consumers will come to different decisions when it comes out of their entertainment pocketbooks.
More damaging, as media analyst Richard Greenfield of BTIG Research says, those consumers -- when these negotiations go bad -- will almost never return to the fold:
"CVC [Cablevision Systems Corp] will lose subscribers at a far faster pace than its prior battles given the timing of key sporting events. Most importantly, those lost subs are incredibly difficult to win back in the future."