Viacom, Time Warner Cable Fight Over Cost Of Comedy Central, MTV

from the and-so-it-goes dept

While this happens pretty frequently, you can bet that battles like the one going on between Viacom and Time Warner Cable are going to become more and more bitter in the next few years. Unless an agreement is reached (which is likely), Time Warner Cable customers may lose access to popular Viacom channels such as MTV, Nickelodian and Comedy Central. The issue is that Viacom wants to significantly raise the costs to TWC for those stations (between a 22% and 36% price increase). TWC would just pass those costs on to consumers, and the company accurately realizes that this would seriously piss off customers at a time when customers are increasingly realizing that they can drop cable TV and just go online for much of the programming they want.

And that, actually, is part of the issue. One of TWC’s big complaints is that Viacom now offers most of the shows on those channels for free online — where TWC isn’t able to get any of the associated ad revenue. The real question is who is in a stronger bargaining position. If TWC dumps Viacom stations, and people start realizing they’re fine with just being able to view the content online, both TWC and Viacom will likely lose out (the ad revenue that Viacom gets online won’t come close to matching the carriage fees from TWC). The whole thing is a big game of chicken, but we’re going to see it play out many more times, as the relative value of the cable provider as the exclusive delivery mechanism for television content starts to decrease. Of course, that only makes the content companies want to increase prices more to make up for the loss — and the cycle actually accelerates. Both sides stand to lose out unless new arrangements are reached.

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Companies: time warner cable, viacom

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Comments on “Viacom, Time Warner Cable Fight Over Cost Of Comedy Central, MTV”

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jonnyq says:

I RTFA to try to figure out Viacom’s justification for the increase, and all I could figure out is that Viacom is losing ad money to poor ratings and trying to make up with it by charging the cable company.

So, the demand for their product is falling, so they raise prices. Also, they make that product less valuable (by making an equivalent product available online, i.e. increasing the supply) and still expect the cable company to pay more. They’re trying to pretend that supply and demand don’t exist.

Let’s hope that TW stands their ground here.

I saw the “ooh scary” messages on those channels this weekend. I bet some customer will thing that TW is just being evil by dropping the channels without getting all the facts.

Joe (profile) says:

Re: The real problem with cable

Viewership may be down if you are just measuring eyeballs watching these channels via cable tv. but overall viewership for the good programming is actually up given the various avenues one can go to watch content. The real issue is that the audience for comedy central and MTV are highly tech savy so they don’t see the point in watching tv just on their tv. they watch it while mobile, online via hulu, or youtube and even by buying episodes of their favorite shows on xbox live/PSN/ or Itunes.

I’m still waiting until the tv providers get their head out of their butts and offer tv on demand…all tv on demand rather then the crap they offer now. Once that is the norm and they figure out how to price things you will see a revolution in how people view and pay for content (being advertisers paying for specific types of eye balls rather than getting the waste or non targeted eye balls).

A Smart Joe says:

Re: Re: The real problem with cable

“The real issue is that the audience for comedy central and MTV are highly tech savy”
Are you an idiot? Did you really just say that?
apparently teenage girls are “highly tech savy”

Your first line disproves your whole arguement.
“Viewership may be down if you are just measuring eyeballs watching these channels via cable tv”
THATS EXACTLY IT. Time Warner provides cable tv, and if less people are watching these channels, why should they pay 25-35% more for them?

Twinrova says:

This is only PART of the problem.

Personally, I hope the channels get dropped. All of them. This way, the entire industry can sit back and realize charging consumers to carry signals is bull.

We went through this recently here in Indiana when LIN-TV (CBS) tried to do the same to Time Warner.

I’m tired of paying increasing cable bills to get stations which do nothing but display more ads than content (hush up, Mike). The entire purpose of ad supported broadcasting was to make revenues for giving away the content for “free”.

Now, we’re all paying for both the ads and the signal and the entire industry can stop doing this.

Online is becoming more popular because of this stupidity, and it’s just a matter of time before companies like Viacom and cable providers fail. The channel is dying and it’s just like the newspaper situation… they’re all trying to maintain a dying market rather than innovate it enough to make both suppliers and consumers happy.

As if this will ever happen.

Maniac in a Speedo'd says:

Drop the rates then

Fine. Drop the Viacom channels. But will Bright House drop my monthly rates after this?

Hell. No.

TWC has NEVER had any trouble jacking up my rates when they saw fit in the past. Why develop a conscience now?

I don’t care if the content is available on the Internet. I sit in front of a computer all day long, and now I’m expected to continue sitting in front of it for my entertainment? Thanks, but I own a sofa.

So they go ahead with this and we all start hammering the Internet for this free content. Then it’s only a matter of time before TWC then jacks up their Road Runner Internet fees to cover the additional bandwidth we’ll be hogging as we watch SpongeBob on our computers.

Time Warner is the only one that makes money in this. And the end consumer is the one that gets it in the ass.

Just the way Time Warner likes it.

mike42 (profile) says:

I agree...

Viacom should take a hike. They had large black banners warning of this all day long. And we use satellite! It’s not enough that Noggin repeats the same 5 episodes of each show all week long, (my daughter’s two, that’s why I know) but the annoy ALL their customers with this stupid banner! Now I’m shopping for educational DVDs, ’cause she has all the Noggin shows memorized. Viacom needs better programming and better management, not higher prices.

Jack says:

Re: I agree...

You said it! I have a 2 year old as well and he’s as sick of the replays as I am. We have AT&T U-Verse and they just go along with it an up the rates. I think I’ll cancel all TV and get educational DVD’s too.

As far as internet TV. I work in the computer field and believe me the vast majority of cable subscribers can hardly turn on their computers, let alone watch TV on it. A set top box connected directly to the internet may help but any internet congestion and they’ll be back to cable in a heart beat. The same cable users get internet through the same company anyway, so the price will be made up in higher bandwidth charges.

Dan says:

Re: Re:

you might be on to something

From the comments at arstechnica

The person who posted this image introduced himself as

“my name is Jeff Simmermon and I’m the director of digital communications for Time Warner Cable …”

In his comment he suggests that Viacom may block IP ranges, if this were to happen I am very concerned about the can of worms this would open.

Arudis says:

Re: Re: @ chris

Torrents ftw!

How about this:

No more bunldes. I dont need the home improvment channel or the food network or ‘puke’ bravo. Let me pick the stations i like, pay for only those… you would save so much bandwidth cuz you wouldnt be simultaneously broadcasting all the garbage and it would add value to your customers since getting just the channels they want would be cheaper. I have no idea how many times iv just skipped over the tv-shopping channels in disgust. 30 news channels… bass pro fishing… ZZzzzz. give me CNN, Fox (cuz jack bauer is my homie), discovery, tnt, fx, Stars, and cartoon network and im solid. Charge me 18 bucks a month for my 6 channels and leave the rest out of the package and i’d be a happy camper. i could care less about the history channel… im not a turner classic movies kinda guy… Heck i dont even own a TV! (tv-tuner on pc ftw). If they dont realize that this business model isnt gonna last long by now then thats on them. I have no problems starting up firefox … w/ ad block and flashblock, and downloading an entire season worth of House or Man vs Wild and watching it @ my leisure. No ads, no money. Simple as that. Either do right by the customer or pay the price when they find alternatives.

crzen (profile) says:

Viacom vs Time Warner

A Letter To Viacom

With my being a Viacom and Time Warner Cable Customer I feel that The current negotiations for more money is a joke. With the economy being as it is the “need” for more corporate gouging needs to stop. The customers that you “serve” are having to make hard decisions on their finances in order to just get by. The $39 million that your company is demanding is idiotic. Your company needs to learn to live within its means. If they cant then good riddance to them. Their will be another company to fill the spot soon enough. If the corporate execs dont get their bonuses this year, well TOO BAD. I wont get one so who the he– do they think they are? Good for Time Warner. Im not saying they aren’t just as greedy but at least they are trying to keep cost down for their customers. forward this as far up the corporate ladder as you can. maybe someday they will get the hint before their greed gets the better of them and all of you are looking for new jobs.

A feedup customer

Emmet Gibney (user link) says:

I think that the cable providers and the cable channels are charging what they see people are willing to pay. It certainly is a game of chicken between these two companies though, and they will probably both lose.

For someone to say that people are having to make difficult decisions about their finances just to get by is pretty ridiculous when we’re talking about cable tv. Just because MTV and Showtime suddenly cost more, I’m not too sympathetic. I’d be more worried about food and gas prices rising, but that’s not as big an issue right now.

I’m in agreement that these guys haven’t figured out the best way to deal with the rapidly changing media habits of their customers, but as long as people are willing to pay and their are numerous other entertainment options out there, they can charge whatever they like. If it’s too much you can always switch to satellite, and a number of telcos are starting to offer television as well now. Not to mention pretty much everything is available online if you want.

Mojo Bone says:

The promise of cable

Does anybody remember the promise of cable? The pretense under which they snuck (have snicken?) those ugly wires into our dwellings? As I recall, it went something like this: Okay, I know up to now TV has been free but this new cable thing you have to pay a little bit for, but it’ll be better! Better picture quality, more channels, no censorship, no endless commercial interruptions, blah and blah.

And what did they deliver? 20% annual rate increases, longer and more frequent commercial interruptions, commercials and promos taking up a quarter of the screen during the freaking program, letterboxing, keyholing, credits squished and/or disappearing and/or sped up past intelligibility, distorted and stretchy images with out-of sync audio, ways for us to censor what other people in our households watch, being forced to pay for channels we don’t want, need or have any use for, including a program guide we can’t get rid of that includes such lofty program titles as Milf Hunt and Wet Teen Beaver Patrol (which parents generally have no idea how to access, but you can bet the kids know how to watch, but if you’d like to view a PG movie every “damn” and “hell” is mercilessly chopped or bleeped. And now nine hundred channels to flip through, most of which cost extra, the ones you can actually watch are repeated several times around the dial, which at least cuts down on the endless scrolling, scrolling, scrolling through crap we can’t afford even though we’re paying more for cable than for heat in winter.

And better picture quality and more channels, sure. Every customer satisfaction survey since the dawn of the cable age has said cable customers all want the same thing: cafeteria style channel access with a program guide that can be configured to show only what’s available under the current plan so the kids won’t whine about how they’re not getting Noggin. A remote that doesn’t need to be punched repeatedly to complete every single operation, maybe an actual person to answer the phone in the event of a problem with the service.

I think if we didn’t allow cable monopolies (am I using the word correctly?) We might have had some of these things long since.


Cynthia (profile) says:

cable program providers

I’m signing up for the daily email because I learn so much from this blog–thanks!

Now my nitpick: I would avoid using the term “cable stations.” “Stations” usually refer to local broadcasters. “Networks” originally referred to the companies that linked broadcast stations together by longline, extending geographically limited broadcast signals nationally. (BTW, the early radio networks were also known as “webs” in the 1920s and 1930s!)

Since broadcast networks (ABC, CBS, NBC) have been the main program providers for broadcast stations (their affiliates), the term “network” carried over into cable to indicate program providers. Although they do not technically run networks of stations but send their signal to local cable operators via satellite feed, companies like MTV, CNN, and so on have been known as “cable networks.” The term “network” implies a nationally distributed program provider, so it is preferable to “station,” which is always a local program provider.

Sorry to be pedantic, but I teach in this field. My students use “channel” and “station” and “network” interchangeably. I spend way too much time trying to help them understand the differences between a “station” and a “network,” not to mention the differences between a broadcast network and a cable network. “Channel” is a whole other story! (Spectrum allocation etc….)

TW and Viacom are each big gorillas known for bullying their competitors with their market power. Rather than choose sides (between the content provider Viacom and the distributor TW), I think we can view this as an example of the increasing conflicts that will erupt as *all* the existing business models continue to be undermined by digital networking. The fights will get more vicious. No one knows who will survive or what business models will replace the existing ones.

That’s why I read TechDirt–looking for clues!

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