Tuesday, July 10, 2012

Programmer v. Operator - The Never Ending License Fee Battle

The dropping of networks off our cable line-ups seems to happen more and more these days.  And as typical in these negotiations, networks threaten to be dropped and eventually are dropped for a period of time from the TV line-up.  Last month U-Verse threatened and finally settled with AMC Networks right before the deadline to drop their networks.  Dish Network actually dropped the AMC channels.  Today DirecTv is threatening to drop the various Viacom Networks - MTV, VH1, Nick, and others from their service on July 11 while Time Warner Cable has already dropped the Hearst Television owned broadcast networks in its various markets.  Perhaps we as consumers have become blasé to these battles having found ourselves turning more and more to alternative platforms for our entertainment and news.

Yes programming costs naturally rise, yes license fees rise to cover those costs.  And yes, ultimately the consumer must decide whether to keep paying or not.  For some of us, we remember broadcast TV as a free medium, paid entirely by advertising; for some of us, we have grown up paying for cable to get a better signal, more channels, and access to more commercial free premium programming.  And for some, anything we choose to watch can be found online, some free and some for a subscription price.  We gravitate to a model that best serves our need and our pocketbook.  But as cost of cable television continues to rise faster than the price of inflation, households are challenged to find ways to cut back.

Thus some may welcome the loss of some channels, even some they may watch, if only to keep their cable bill from rising.  Others may use it as a reason to finally cut the cord and embrace online.  Who needs their 11pm nightly news anymore if the same information can be shared via social networking and online news sites.  Who needs their Nick anymore if the same kind of shows are found on Hulu or Netflix.  The Programmer v Operator battle only helps to continue to push viewers away.

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