At 8:45p Sunday evening, WABC-TV and Cablevision announced an “agreement in principal” which averted a crisis for both parties allowing the Oscars to be carried by Cablevision at 9p Sunday night.
Nyack, March 7, 12:00m — WABC-TV, New York has removed their signal from Cablevision’s lineup blacking out all of the Disney-owned station’s programming including tonight’s broadcast of the Academy Awards.
The banner headline on the station’s Website, SaveABC7.com, says “Cablevision betrays their customers again! First HGTV and Food Network, now ABC7.”
Cablevision’s Website counters: “The definition of corporate greed: ABC demanding $40 million for WABC-7.”
Just like the health care debate, the screaming obscures the facts. Until cooler heads prevail, the three million Cablevision subs in the NY metro can go to a neighbor’s house and watch the Oscars on Verizon’s FiOS, Time Warner, Comcast, DirecTV, Dish Network or online at ABC.com or Hulu.com.
Here is a profile of the leading characters for today’s performance.
Q: I’m going to miss Good Eats AND The Oscars? How can this be? TV is supposed to be free!
A: When SaveABC7.com says “First HGTV and Food Network, now ABC7″ they are refering to a squabble earlier this year between Scripps Networks and Cablevision where Scripps’ channels were off the air for three weeks in Cablevision homes. WABC’s implies that Cablevision no longer carries HGTV and Food network. This is incorrect.
Also remember that there is no such thing as free TV. WABC, Cablevision and everyone else on the dial makes money by promising advertisers that you will be there to view their commercials. Although you may not think you are paying to watch TV — in the eyes of media buyers and sellers — your attention is a valuable commodity for which billions of dollars are paid each year nationally.
Q: Why is this happening now?
A: FCC rules say that a station can request compensation OR grant retransmission consent in exchange for a preferred channel position. This agreement, negotiated on a system by system basis, is up for renewal every three years.
Q: So, if WABC already has a preferred position (Channel 7), why are they asking for money, too?
A: Good question. WABC is playing hardball for a $40 million increase on top of the $200 million which Cablevision says they already pay Disney. WABC says disputes these figures.
There’s alot of information we don’t know — and will never know, either. Disney’s cable channels include ESPN channels, ABC Family and The Disney Channel. Over time, Disney has received carriage of new channels — and better channel positions — as part of these negotiations.
It’s possible that the $200 million which Cablevision says that it now “pays” is the calculated value of all of these negotiated concessions. We don’t know. But it’s reasonable to assume that Cablevision has been paying cash as well as giving up other concessions to Disney for carrying WABC-TV. Things which prior to today Disney felt had value.
Q: Certainly WABC pays a lot for these programs. Shouldn’t Cablevision should pay its fair share?
A: It is unlikely that WABC-TV pays anything for the programming it receives from the ABC Television Network. In fact, many stations in the country are paid by the ABC, CBS and NBC to carry network programs in a decades long practice called “compensation.” Because WABC-TV is an owned and operated station of the ABC Television network, it isn’t clear if they receive cash compensation to carry programming from their corporate parent.
Q: If Cablevision decides to pay more for WABC-TV, will my cable bill go up?
A: Here’s the FCC’s answer: “In return for allowing a cable system to carry its signal, a television station may require the payment of a fee or other consideration. Any new or additional costs incurred as a result of retransmission consent agreements may be passed through to cable subscribers.”
Q: If WABC-TV only makes money when they run commercials, won’t they be hurting themselves by yanking the Oscars and all of their other programs from three million households in the biggest TV market in the US?
A: WABC-TV and the ABC Television network have promised advertisers a certain “delivery” of demographic viewers to tonight’s Oscar broadcast. If tomorrow’s Nielsen results show they fell short, they will owe “make-goods” (future no-charge commercials) or cash back. This is an issue for both the local station and the ABC Television network.
Q: So if Cablevision subscribers are angry and Disney advertisers will be angry with WABC-TV, why are they doing this?
A: Good question. This is the grown-up version of adolescents daring each other to see who can hold their hand over an open flame for the longest amount of time. But in this game, Cablevision, ABC and Oscar fans are all going to get burnt by this episode of “As The Media Turns.”
Sources: FCC, SaveABC7.com, Cablevision
See also: NYT 3/7/2010
This story has also been cross posted to MediaNewsAndViews.com
You’re going to see much more of these television blackouts over the next few years. However, the end result might end up helping the average consumer. As broadband speeds continue to increase, access prices drop, and compression technologies improve, you will see the emergence of IPTV (or TV over IP) and consumers will be able to make their choices of free and pay television services via the Internet. The cable/fiber-optics/satellite industries will no longer be content aggregators, but suppliers of network services.
Services like Hulu, Bablegum, and Joost are only early models for the networks to come, where you can select your content supplier individually of the equipment that you have. Services like Netflix, with online delivery, will supply on-demand services once supplied only by cable/fiber-optic/satellite providers.
So, the battle isn’t about the $40 million for ABC, it is actually more about the cable industry and the entertainment industry fighting over the future of television. ABC feels that Cablevision is encroaching on next-generation delivery services. In the meantime, Cablevision is trying to protect the closed and proprietary nature of pay television services.
This might all be for nothing. Last year, the FCC gave approval for the development of set-top boxes last year that utilize several live, scheduled, and on demand content providers and consumers can choose their services å la carte. The Internet and TV will soon be one in the same, and while this impasse might be an inconvenient hiccup, in the end I’m hopeful that this changing dynamic will be beneficial to all of us.
In the meantime, I think its not a bad idea to invest $35 in a broadcast antennae.