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Cable Technology Feature Article

August 20, 2012

New York Customers Lose Programming during Retransmission Fee Negotiations

By Susan J. Campbell, TMCnet Contributing Editor

The battle over rights to charge for programming access has come to a head in New York. As citizens lose access to their favorite shows, networks and affiliates squabble over cable entitlements and fees. 

According to this Media Coder blog, homes serviced by Cablevision in New York City are unable to receive programming on WPIX, the CW network affiliate. The blackout took effect last week as a result of a disagreement between the Tribune Company, the owner of WPIX, and Cablevision.

The Tribune Company is arguing with Cablevision over the retransmission price. The request for transmission fees is not necessarily a new one, and disagreements often emerge as associating a value with the service is often a difficult challenge as both sides must agree. Before agreement is met, customers generally suffer when programming is blocked due to a forced blackout. 

According to the Tribune, Cablevision “unilaterally removed” a total of four stations (WPHL, WCCT, KWGN and WPIX) from its cable systems before the previous contracts regarding retransmission between the two companies had expired. The Tribune issued a statement on Friday that this blackout occurred right in the middle of negotiations and without warning. 

The Tribune also stated that until now, Cablevision has not paid any retransmission fees specifically for the four stations listed. The company’s proposal amounts to less than a penny per day per paid subscriber. Cablevision has a different story, of course. They say the fees would actually add up to tens of millions of dollars over the course of several years. In fact, they are accusing the bankrupt Tribune Company, and the banks that own it, of trying to use retransmission fees as a method to solve their financial problems. 

A Cablevision statement reads, “Tribune and their hedge fund owners are demanding tens of millions in new fees for WPIX and other stations they own. They should stop their anti-consumer demands and work productively to reach an agreement.”It is not unusual for two sides of a retransmission negotiation to disagree over the fees and motivates for demanding increases. 

The actions on each side come under intense scrutiny when this occurs, especially when blackouts are ordered and subscribers feel the pain of the disagreement. Any action that affects the customer experience is likely intended to send a message to the network, but could easily backfire on the cable company. Too many providers are extending access to programming in a commoditized market. Leveraging this asset could generate more churn than it does retransmission fees.

Edited by Juliana Kenny

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