Thursday, October 17, 2013

Time Warner Cable To Bring Back Ovation Network

Despite dropping the Ovation Network the beginning of the year under the guise of controlling costs by dropping low rated channels, Time Warner Cable plans to relaunch the network the beginning of next year.  The rationale given, an increase in original arts programming on the network.  A wonderful benefit to present to the subscriber.  I am a fan of the arts and a fan of Ovation so my comments are not about the value that the network provides, especially as art programming is underrepresented on linear television.  It is simply that the original reason Time Warner Cable dropped the channel was to cut costs for little viewed programming. 

I doubt that the investment that Ovation is making in original programming will substantially change the ratings of the channel.  Other arts networks, like A&E and Bravo, ultimately moved away from high art programming for more "pop culture" shows to attract a broader audience.  I suspect that the deal was also predicated on a lower license fee cost and "marketing investment" back to Time Warner Cable.  Fine in the short run, but not consistent with its earlier "public push by the cable operator to cull its lineup of poorly rated channels. CEO Glenn Britt made much of that plan, aimed at controlling rising programming costs."  So if you start adding channels and costs, has your strategy changed?

Ultimately, low rated channels likely also have the lowest license fee costs to the operator; they would have little or no effect on the subscriber fees that are passed through to consumers.  Those higher fees tend to be tied to the highest rated cable networks and especially regional and national sports networks.  According to the article, "A Time Warner Cable spokeswoman said that the company continues to look at 'three primary factors: cost, viewership and unique content' when it comes to assessing the value of a channel."  SO will TWC start to drop other low rated channels.  It remains to be seen if we ever hear that cable operators are actually lowering their monthly subscription fees to consumers as a result of cutting costs.  Frankly, I doubt it.  And as cable costs rise, consumers will seek to shed those fees for streaming video alternatives.  And it is in the OTT platform that networks like Ovation could have the chance to shine and breakout. 

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