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Two important lessons from the CBS/Time Warner Cable dispute.

 In Ascertainment

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Viewers of “How I Met Your Mother” or “Under The Dome” night may have wondered why their favorite TV show suddenly went dark in the middle of the broadcast a few days ago. The blackout came about as Time Warner Cable (TWC) stopped carrying CBS-TV programing in several markets around the country, including in the nation’s second-largest TV market, Los Angeles. TWC restored the service a few hours later only to drop them again later that week.

This disruption for TV viewers is a result of a disagreement over something called ‘retransmission consent’. Cable customers pay Time Warner for their TV service, and part of those fees go to the channels carried by the cable system. Ninety nine percent of the time, negotiations over these fees are no big deal, and viewers don’t even know they are taking place. But, on the rare occasions these negotiations do become public, viewers may feel they are caught in the middle. And the reality is, they are.  This current CBS/TWC issue is no exception, and it provides two clear lessons for TV viewers and regulators.

The first lesson, highlighted by the dueling press releases between CBS and TWC, shows these negotiations are the latest front in a long-time Southern California battle between those who create and control the content people want to see, and those who control content distribution. Content creators want the largest audience possible for their programming, while content distributors want to build appealing channel packages that will attract additional subscribers. The nuances of these issues – whether it’s broadcasters and cable systems, or movie companies and theater chains, or musicians and radio stations – are so detailed, and so widely varied, that calls for government involvement would only serve to complicate the process and result in more content disruptions for consumers, not less.

The second point consumers can take away from this is that over-the- air reception through an antenna is still a free, and viable, alternative for TV viewing – especially here in LA. Shortly after shutting off the CBS feeds in LA Monday night, TWC issued a statement that included an encouragement for consumers to switch to over-the-air reception. They stated, “Fortunately, CBS programming is still available free online at cbs.com and over the air with an antenna”.

As digital distribution becomes an even greater part of our content consumption habits, more and more people have embraced a “cut the cord” movement and switched to over-the-air reception. It’s free and available in high definition, and sometimes even at higher quality than cable or online. In fact, nationwide 1 out of 5 viewers now get their HDTV over the air. In lower income households, the number is closer to 1 out of 3. The tried and true technology of a simple antenna, which now can even be attached to your iPhone or iPad, allows consumers to control expenses and still stay connected with their favorite local stations and network content.

Our current system of retransmission consent negotiations may occasionally be somewhat ugly and messy. However, the benefits of the system ensure that TV stations remain strong and are there to serve local communities in good times and in bad, while also ensuring the market place continues to determine the value of content and distribution. Back in 1992, Congress recognized the importance of this process and the benefits of keeping themselves out of the negotiations. The reasons that led Congress to that decision have not changed.

 

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