Cat Fight!! But Nothing to See Here

Well Time Warner Cable and Viacom are in a street brawl over income streams. Viacom wants more money for the channels — Spike, TVLand, CMT, etc. TWC is holding pat. As of Midnight TWC was to pull those channels off the air. But I guess they blinked as they are still on our TWC channels here in Dallas –

Viacom is demanding that Time Warner Cable pay more for the right to broadcast its networks, but TWC has refused. Tonight at midnight, 13.3 million subscribers in New York, Los Angeles, Dallas, and Cleveland will feel the effects of the stalemate first hand when Viacom makes good on its threat to pull all of its networks from TWC. Translation: no more “The Daily Show,” “Dora the Explorer,” “The Colbert Report,” “The Hills,” etc. But hey, there’s always Hulu and BitTorrent, right?

Rather than doing any actual negotiating, the two companies seem to have been hoping the threat of an angry, alienated customer base would resolve the issue. It hasn’t.

Noted over at HotAir —

Like most divorces, both sides have legitimate points. Viacom says it only receives 8% of all licensing fees paid by Time Warner, even though its channels get 20% of all viewership, and it deserves a raise. Time Warner says Viacom must be smoking the drapes if it expects families in a recession to pay more for cable television service. The fight has gone down to the wire, and now Viacom wants to frighten the kids to make Time Warner pay up.

Viacom’s argument really doesn’t add up, though. They make money off of licensing and advertising. If they get better viewership than A&E, then they should be able to charge more money for it. Time Warner should pay market value for the right to broadcast the channels, but won’t Viacom lose a hell of a lot more money by antagonizing Time Warner and its subscribers, especially through a heavy-handed ad campaign? After all, their advertisers will lose millions of potential viewers at midnight tonight — and that makes Viacom’s channels much less lucrative for spending advertising revenue, especially in this economy. They’re cutting off their nose to spite their face.

They’re not going to get much sympathy from parents by exploiting these cartoon characters, either. Families in a tough economy are not going to make the expensive investment in satellite dishes just to get Nickelodeon back. Instead, they’ll find other outlets for entertainment for their children, perhaps permanently. …

Why is there nothing to see here? Why TVoIP of course. If Viacom was really serious about winning they would let TWC pull their channels off the air. Then by the end of this month partner with NetFlix with their Roku-based instant view service to offer the content for a flat fee. They could even embed the ads (just fewer of them) in the content. They get their income stream and bypass the cable cos.

TWC would hate that with a passion but have little recourse. Again, nothing to see here. The content providers have the upper hand if they play their cards right. The cable cos may have a clue, but their only response would be a price reduction which they could ill afford.

Consumerist
Hot Air

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