Wednesday, December 23, 2009

Fox and Time Warner Cable Battle - Customers Will Ultimately Lose

Ahhhh, remember the simple life when all there was to watch was free, over the air, broadcast TV. Just adjust your antenna and watch. Then cable came along and offered a clearer transmission and ultimately more channels. Then technology brought video recording and ultimately on demand. And with each change, the price for watching TV rose and rose and rose.

Welcome to today where broadcasters own cable channels and leverage is used to assure that dollars get spent on carriage of both broadcast, general cable nets as well as niche ones. The allure of subscription fees to augment the revenue from advertising is too compelling to ignore. So broadcasters switched from "must carry" to "Retrans" to force contract negotiation. Fees go up and cable customers pay more.

So today you have Time Warner Cable fighting Fox and Mediacom fighting Sinclair. Timing for contracts always seem to expire New Years Eve causing great despair as the clock is used to force settlement before time runs out and a holiday is upon us. Just in time for folks to be huddled around the TV, set to watch a movie or a college bowl game. Ultimately, more money will be spent and those costs will be passed on in cable bills.

And as broadcast signals have become digital, antenna reception more problematic, customers have been forced to carry cable to watch their shows. Will customers switch to avoid losing their Fox or will they wait and watch the drama unfold. A deal will be reached, maybe by December 31, maybe not. But shortly thereafter and it will then be another cable network and another cable operator's turn to go through this same dance. It's happened before and it will happen again. And once the customer gets tired of this ongoing fight, they will switch to internet viewing and simply find an alternative choice to satisfy their TV addiction.

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