With both “broadcasting” and “cable” in our name, we know how the National Cable & Telecommunications Association feels as it tries to navigate the retransmission consent battles in which some of its members have dogs on both sides of the fight. But the new “big dog” in the battle appears to be digital rights, and both broadcast and cable interests will have to figure out how to make them part of the equation. That appears to be the principal sticking point in the CBS/Time Warner Cable retrans fight.
We have no intention of picking sides in that fight, except to say that it’s clearly in their customers’—and their own—interests for the sides to find some meeting of the minds and pocketbooks. We hope by the time this editorial hits the stands, the two have shaken hands and made up; however, we’re not betting the farm on that, given indications they are hunkered down for the long haul… or at least until the NFL season starts.
But the issue is not simply CBS and TWC. It’s how cable operators and broadcasters are going to get along in a world where they still very much need each other. For all the talk about Mad Men and Breaking Bad, broadcast fare is still far and away the most popular programming on cable. When it goes dark during retrans tussles, Congress gets antsy and the FCC gets restless. While that tends to be confined to prodding and fulminating, if high-profile blackouts proliferate the crouching tiger could turn into the hidden dragon.
Broadcasters talk about cord-cutting, but online video distribution services are not yet a substitute for traditional cable. So dramatic declines in cable subs also means a decrease in retrans fees (calculated on a per-sub basis) that broadcasters eye as a critical revenue stream.
A common theme among some D.C. watchers of the CBS/TWC imbroglio has been that both sides have taken a PR hit. While media execs and lawyers understand the complex issues that can result in impasses, consumers only know that two large, profitable media companies are battling and TV shows they were used to receiving are gone.
Cable operators say blackouts are increasing. Broadcasters say they continue to be relatively rare. Both could be true. In any event, the fewer outages there are, the better for consumers and for both broadcasting and cable.
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