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It has been 14 days since Time Warner Cable pulled CBS off the air in New York, Los Angeles, and Dallas, along with its subsidiary networks Showtime and the Movie Channel. A total of about three million subscribers are being affected, and it looks like there won’t be a resolution anytime soon. The fight centers around the fees that TWC pays broadcast networks to transmit their shows on their cable systems: the rumor is CBS wants about $1 more per subscriber per month for TWC to carry its programming.
The acting chairwoman of the FCC, Mignon Clyburn, has said she is “really distressed” by the fight, but hasn’t yet done anything to intervene. Justin Bachman notes that it might take the impending NFL season (which starts September 8) to get someone to take action. “If it goes to football season, I think Congress will definitely get involved,” Brian Frederick, a spokesman for the American Television Alliance, which represents cable channels, told Bachman.
Time Warner subscribers are taking to the courts. Los Angeles subscribers have filed a class action lawsuit demanding a refund for their lost programming. Donald Trump, meanwhile, is grumbling on Twitter.
Peter Kafka is less than impressed with this fight:
You just need to know that it will play out like every other programmer vs. pay-TV distributor story: The programmer wants more money for their stuff than the distributor wants to pay. Eventually they will settle somewhere in the middle. Then they raise rates, and pass the costs down to you, the pay-TV subscriber.
This time, however, there is a concern that with the widespread availability of online options, this blackout might lead some customers to cut the cord for good. AMC emerged the winner last year in a spat with Dish Network after it pulled programming right before the premiere of Breaking Bad, then streamed the show for free online, along with anti-Dish ads. Since then, shares in AMC Networks have been soaring while Dish Network’s stock languishes, points out Hilary Kramer.
CBS is taking a different approach, blocking certain IP addresses coming from TWC subscribers from accessing shows online. But this has just led people to get their CBS shows illegally (except for The Donald) or hooking up the old rabbit ears. In all, CBS ratings haven’t even suffered much.
Steven Max Patterson argues there simply aren’t enough options on the web for the majority of people to ditch cable entirely: “cord cutters that are not pay TV subscribers amount to less than 5% of all households,” he notes. And for those in New York who might just want to cut off Time Warner and go elsewhere, Lauren Hockenson has a friendly reminder that for most it’s all but impossible.
While it may not have caught on widely yet, cord cutting is one generalization about millennials that can actually be backed up with data. “From 2010 to 2012, about 5 million new households formed. Barely 200,000 of them signed up for any kind of dedicated TV service”, writes Kramer. – Shane Ferro
On to today’s links:
Bank of America
BofA to merge Merrill Lynch into the parent company - Bloomberg
“BofA is getting rid of Merrill Lynch & Co. and bumping Merrill Lynch, Pierce, Fenner & Smith up to take its spot on the org chart” - Matt Levine