Broadcaster, Cable Bickering Leads To Record Number of TV Content Blackouts

from the deck-chairs-on-the-Titanic dept

If you’re a cable customer you’ve probably been met with at least one cable retrans blackout. It’s what happens when broadcasters and cable operators can’t behave like adults and agree on rates for a new programming contract, so instead decide that whining and punishing paying customers is the best course of action. The feuds usually involve months of public bickering, public announcements, ads and on-screen tickers declaring that the other guy is the villain, then blacked out content for paying customers, who almost never see refunds for the inconvenience.

These disputes usually end with both sides agreeing to a new confidential contract, with those costs then passed on to the consumer. Rinse, wash, and repeat.

Despite 2015 being the year that cord cutting and Internet video finally started to make some real headway (with the launch of Sling TV, HBO Now, and an increasing array of original programming from the likes of Netflix), the legacy pay TV industry continued to bicker like children. In fact, an analysis by the Wall Street Journal showed more retrans blackouts than ever before last year, and 2016 is already looking to likely break that record:

“Television viewers around the country endured a record 193 blackouts in 2015, up from 94 the previous year and eight in 2010, due to an intensifying battle between cable companies and the broadcasters who provide a key part of their programming. Already so far in 2016, at least 13 new blackouts have occurred in markets from Tucson, Ariz., and Tulsa, Okla., to Lexington, Ky., and Lafayette, La., according to pay-TV carriers and their allies.”

The cable and broadcast industry is caught in a death spiral it can’t seem to escape. Programmers demand more money for the same content, and the biggest cable operators ultimately agree, passing on those costs to the consumer (though not innocently taking every opportunity to tack on some hikes of their own). Smaller cable operators have started finding that the profit margins are just getting too tight, so they’ve considered getting out of the TV business entirely. Customers, meanwhile, tired of what’s often bi-annual price hikes for huge bundles of unwatched content, increasingly look to other options.

Here’s what this kind of unsustainability looks like in graphic form:

One of the problems here is that customers (many of them older and frightened by Internet video) are losing access to content they’re paying for, and very rarely do they see refunds. Regulators have paid some lip service to this being idiotic, but have so far kept a hands-off attitude to what’s treated as run of the mill business disputes. And that hands-off attitude may be the right approach longer term; these feuds are simply a cooperative game of seppuku, and the industry remains collectively oblivious that it’s expediting the death of the very cash cow it’s bickering over.

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Comments on “Broadcaster, Cable Bickering Leads To Record Number of TV Content Blackouts”

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Anonymous Coward says:

I’m good with that. Long ago dropped these idiots and their PPV as they started to get greedy. Looking back I’ve saved one huge pile of money. My lifestyle no longer includes PPV or even TV.

I got fed up with constant reruns, the lack of value for the money in quality programs, and commercials on my dime. I no longer am constrained by some time table that says this show only comes on at this time. Then follows that up with 8 to 10 episodes after which you again get reruns until the next year; rinse and repeat.

I can’t tell you how peaceful my place has become without ads and commercials screaming in the background all the time. At this point I’m not just a lost customer but one who will probably never own another tv.

PaulT (profile) says:

Re: Makes sense

“As more people cut the cord, they have to raise retransmission rates to make up for the loss of income due to fewer users”

But, that only makes sense up until a certain point, where the rule of diminishing returns hits and the whole thing becomes unsustainable. At this point, it’s clear that they need to do something else, either to adjust their business to gather other forms of revenue to replace that being lost, or to attract customers back to using the services that are collapsing. Only raising prices without doing the other things at this point will only speed up their demise.

JBDragon (profile) says:

Re: Makes sense

I don’t see why Cable company’s should even pay a Re-transmition fee. They’re offering a service to get more people to watch your channel. Where they live a Antenna may not be practical, or the signal may not be the best. ABC, CBS, whatever, which you show your own ad’s to make money!!! If anything, they should be the ones paying the cable company’s to do it.

I cut the cord almost 4 years ago and it’s been the best thing ever. After paying for it for about 18 years. But once in a while I get those banner messages about blackout for Comcast or whatever. It’s not blacked out for me being a Antenna user, but that messages are still in their stream.

When I look around my neighborhood and don’t see a antenna in site, I laugh and think SUCKERS!!!! I don’t miss that $170 Comcast bill back then I was paying. I currently pay $50 a month for 105Mbps service. That’s all I need, internet only. All the broadcast channels I get 100% Legally FREE with a Antenna and use a TIVO to record it all where I then skip past all the commercials!!!

Violynne (profile) says:

One day, we can only hope these morons get to the point there will be no more resolution to the disputes, so that everyone is out of options:
-Hollywood can’t distribute their tired wares
-Cable can’t charge for shows it doesn’t have

But the most important…

Customers will finally have no choice but to give up their cable subscription, and help usher in the new way to receive content: digital streaming.

DannyB (profile) says:

Feedback loop

Caption from graph in article:

Retransmission Fees Have Increased Despite the Decline in Viewership

Is it ‘despite’ or is it ‘because of’?

Maybe declining viewership means less ad revenue. This leads to higher retransmission fees to make up the difference by sticking it to cable companies. Which in turn leads to declining viewership due to cord cutting.

See the feedback cycle?

Also for non cable viewers: to make up for lower revenue the quality of content also declines, and thus non-cable viewership also declines.

DannyB (profile) says:

Dinosaurs fighting

Dinosaurs sinking into the tarpit of obsolescence. So they fight each other to stay on top and slow their own descent into the tarpit. Too preoccupied fighting each other to realize that they are only accelerating their descent.

People keep cutting the cords to these dinosaurs that help slow their sinking. Yet they deny the existence of cord cutting which is the result of their own making.

Jason says:

collateral damage

An extra annoyance is that people who aren’t even part of either camp get bombarded with all the annoying advertising and on screen ticker ads too. Last year one of my local stations (Fox, I think) was injecting on-screen messages into prime time programming to push viewers to get involved in their dispute with the cable company… a cable company to which I was not subscribed to.

I wrote to the station complaining that the shows I watched got disrupted (the ticker coming and going caused a glitch in the underlying feed, basically skipping a second or two of video, and then the show itself was boxed into a window for the duration of the messages) despite not being a customer of the provider they were arguing with. I got a response saying, basically, how important the issue was and how much they needed people to be aware of it, blah blah blah.

Well, they definitely made me aware of it… so much so that I’m virtually guaranteed to not take their side when this kind of thing happens again.

Anonymous Coward says:

Saw the writing on the wall

First it was the during the show ads…you remember, characters from some show you don’t watch covering 1/3 of the screen making the your show un-watchable. Then they started with the pissing match scrolls. First DirecTV would be bitching at Discovery then Discovery would run their bitch. With all the bitching, endless commercials and ads overlaid on a show I said “Enough!”.

Now when I’m at a friends house if they are watching cable TV I usually leave early. I don’t know how I or anyone else can manage to sit through all the crap and call it entertainment.

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