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Time Warner & CBS Reach Content Carriage Agreement (New York, Dallas, LA)

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Alenaveda:
FROM VARIETY
http://variety.com/2013/biz/news/cbs-blackout-could-be-costing-it-400000-per-day-analysts-1200573955/


CBS Blackout Could Be Costing It $400,000 per Day: Analysts
Todd Spangler
Digital Editor, New York @xpangler

CBS may be losing about $400,000 daily because of the blackout in major Time Warner Cable markets, now entering its fourth day — although the total financial blow to the Eye from the spat likely will be minimal, according to Wall Street firm UBS.

The estimate includes lost retrans revenue and a loss of advertising dollars at both the network and CBS local stations, according to UBS. Every two weeks of being dark on TW Cable equals a loss of 1 cent per share, the firm calculated.

On Friday at 5 p.m. Eastern, Time Warner Cable pulled CBS signals for approximately 3 million subscribers, primarily in New York, L.A. and Dallas. The operator also dropped Showtime and three other CBS-owned cablers, while the Eye retaliated by blocking Time Warner Cable broadband subs from accessing full episodes online.

If history is a guide, the standoff should be resolved in less than two weeks, UBS said, although other observers have suggested CBS and Time Warner Cable may not come to terms until September.

“Our view continues to be that consumers have more loyalty to the content rather than the company which is responsible for distribution, and with contracts often running 5+ years, CBS can’t afford to take below-market value given the inability to renegotiate terms,” UBS analysts John Janedis, Jaime Morris and Michael Russo wrote in the Aug. 4 note.

CBS’s estimated daily loss of $400,000 is small coin in relation to the company’s total revenue: In the second quarter, the Eye reported $3.7 billion in revenue and net income of $472 million.

Meanwhile, Time Warner Cable also stands see financial losses mount the longer the feud continues, as disgruntled customers cancel. UBS did not have estimates on the effect of the blackout on the cable operator.

CBS said Sunday that the companies were not actively negotiating. The Eye said Time Warner Cable rejected an offer to extend their previous deal while talks continued, but the cable operator disputed that and claimed it offered CBS a one-year extension.

Prior broadcast and cable blackouts have had limited effect on stock prices, according to UBS. The firm cited Fox’s 15-day outage on Cablevision in 2010, a 28-day blackout of Fox cable channels on Dish Network in 2010, and Viacom’s nine-day blackout on DirecTV last summer as having had little impact on share prices.

Alenaveda:
FROM THE HOLLYWOOD REPORTER:
http://www.hollywoodreporter.com/news/cbs-time-warner-cable-refuses-599353

CBS: Time Warner Cable Refuses to Resume Negotiations
As some customers claim to be receiving rebates for Showtime subscriptions, CBS issues a statement claiming the provider is making a play for "more leverage."

by Alex Ben Block

CBS issued a statement Sunday that there are currently no negotiations with Time Warner Cable in their retransmission negotiations dispute which has resulted in thousands of cable customers losing CBS stations and the Showtime pay TV service since Friday evening.

The company noted that before the deadline Friday they did ask TWC to continue talks and keep their content on the air -- but TWC “rejected this request,” according to the network, “and told us they’d have more leverage against us if they took us off their service.”

“This is hardly a sign they care about their customers as they claim," the statement continued. "We remain ready to negotiate in good faith when they are.”

CBS, which ran newspaper ads Sunday in New York and Los Angeles urging angry customers to contact TWC, also pointed out that a caller to Milwaukee's Charlie Sykes radio show said TWC gave $20 off his bill for Showtime as a result of the blackout. The cable provider has noted it will provide rebates to customers of the pay TV services, including Showtime, but not for broadcast channel blackouts, as they say they often shuffle channels.

Asked for a response to the CBS claims on Sunday, TWC released the following statement: “We regret the inconvenience to our customers (and their viewers) and look forward  to resolving the situation as soon as possible.”

Boingo:

Might be time to think about taking that rebate and investing in an inexpensive HDTV antenna and cutting the cable.  Viewing CBS over-the-air in HD is as good or better than cable.  Would at least solve the short term situation and still allow for BB viewing.   :colors

HurricaneHowieWood:
UPDATE: CBS Calls Time Warner Cable’s A La Carte Proposal A “Sham”
By DAVID LIEBERMAN

UPDATE: Now Time Warner Cable has a response to CBS’ response to TWC’s proposal to offer CBS stations on an a la carte basis: It says ithe effort to revive negotiations was “sincere.” It adds: “We’re disappointed in their lack of responsiveness, particularly to our request for them to quit unfairly blocking the free content available on CBS.com from our Internet customers. We hope they will return to the table to negotiate in good faith on behalf of our customers and their viewers.”

PREVIOUS, 2:32 PM: A more formal response will come later, but here’s CBS’ initial answer to Time Warner Cable’s proposal to offer its O&O stations on an a la carte basis: “Today’s so-called proposal is a sham, a public relations vehicle designed to distract from the fact that Time Warner Cable is not negotiating in good faith. Anyone familiar with the entertainment business knows that the economics and structure of the cable industry doesn’t work that way and isn’t likely to for quite some time. In short, this was an empty gesture from a company that is expert at them.”

PREVIOUS, 12:07 PM: CBS says that it “received Mr. Britt’s ‘offer’ simultaneous with its release to the media. We are formulating our response.”

PREVIOUS, 11:04 AM: Time Warner Cable can offer CBS “on terms of its choosing, with 100% of that price remitted to CBS,” CEO Glenn Britt says in a letter today to CBS chief Les Moonves — the latest effort to resolve the contract impasse that since Friday has left millions of TWC customers unable to watch programming from CBS and Showtime. “This way, rather than our debating the point, we would allow customers to decide for themselves how much value they ascribe to CBS programming.” Since the proposal “is very straight forward, the papers can be completed quickly.” TWC released its news moments before COO Rob Marcus appeared on CNBC for a scheduled interview. He said that a la carte is “the purest way to find out what customers want to pay” for programming. ”It takes us out of the middle of it.” Britt also says that TWC would agree to resume carriage of CBS stations and channels “with the new economics TWC reluctantly agreed to during our negotiations, while employing all the other terms and conditions of our recently expired contracts.” In addition to the carriage proposals, Britt asked Moonves to stop blocking TWC’s Internet customers from watching full episodes of programs on CBS.com. “Regardless of the other issues between us, it is surely beyond the pale for you to subject these Internet customers to blocking of content that is made available for free to all others.” Here’s Britt’s letter to Moonves:


Dear Les, In the interests of getting CBS back on our cable systems today, we write to propose that CBS and Time Warner Cable immediately agree to resume carriage with the new economics TWC reluctantly agreed to during our negotiations, while employing all the other terms and conditions of our recently expired contracts. Although those terms are not ideal to CBS or TWC, and would leave TWC and our customers without the digital rights that CBS has provided to others, since both parties have lived under those terms productively for many years, we believe we should continue to live with them in the interest of restoring CBS immediately for the benefit of consumers. Alternatively, if you are unwilling to agree to this proposal, we would also be willing to resume carriage by allowing CBS to make its stations available on an a la carte basis at a price and on terms of its choosing, with 100% of that price remitted to CBS. This way, rather than our debating the point, we would allow customers to decide for themselves how much value they ascribe to CBS programming. In connection with both of these proposals, we would expect you to allow us to immediately resume carriage of your CBS stations (and other CBS-programming services) on retroactive terms as we work out any necessary details. The extension would be ongoing to make sure consumers are not once again held hostage by CBS during this process. We expect, though, that since each of our proposals is very straight forward, the papers can be completed quickly. Finally, we call on CBS regardless of whether it accepts or rejects our proposals, to immediately cease its blocking of CBS.com content from TWC’s high-speed Internet customers. Regardless of the other issues between us, it is surely beyond the pale for you to subject these Internet customers to blocking of content that is made available for free to all others. This is especially so given that CBS uses free public airwaves to broadcast that content and has public interest obligations that it is plainly flouting. In addition, this conduct is abhorrent in that CBS is using this blocking to punish TWC’s Internet customers across the country, including millions of consumers in cities where we continue to carry CBS on our cable systems through agreements with other CBS-affiliated stations; is blocking customers of other multichannel providers, including Direct TV, with whom CBS has no dispute; and is apparently blocking customers of certain other ISP’s, to which TWC provides wholesale Internet services. We stand ready to speak with you immediately to follow up on these matters.

http://tv.yahoo.com/news/time-warner-cable-proposes-la-carte-offering-cbs-180454947.html

HurricaneHowieWood:
Is CBS's web blocking of Time Warner Cable customers illegal? Senator wants FCC to investigate

By Adi Robertson

Time Warner Cable internet customers are smarting from CBS' decision to block them from viewing shows online, but they have at least one supporter in Congress. Senator Ed Markey (D-MA) has written to acting FCC chair Mignon Clyburn, asking her agency to investigate the blackout. The letter, published in full at the LA Times, urges the FCC to help broker a deal between the two companies, which have been feuding over the cost of carrying CBS channels. "I encourage both parties to remain engaged in good faith negotiations," he writes, "and I also request that the Commission take action to bring the parties together so these negotiations can be concluded in an equitable and expeditious manner."

Markey says he's not taking a side in the dispute. But he's "particularly concerned" about reports that CBS won't let Time Warner Cable subscribers watch shows on the web. "A consumer's choice of cable television provider should not be tied to her ability to access internet content that is freely available to other consumers," he writes. "In such instances, consumers lose their freedom to access the Internet content of their choice."
 
CBS has made no secret of the fact that it's blocking content, but it's denied that it's broken any net neutrality laws — and because it's not an ISP, it's almost certainly correct. But Markey wants the FCC to look into it nonetheless. "This is an anti-consumer result that I urge the Commission to investigate, and I encourage the Commission to actively defend internet freedom and consumer rights," he writes.

Markey isn't the only one concerned that customers are being "caught in the middle" of the dispute. Representative Anna Eshoo (D-CA) has promised to see if legal changes are necessary to prevent future channel blackouts. Earlier this week, Time Warner Cable itself filed a letter to the FCC asking the commission to "make clear that such abusive conduct will not be tolerated by broadcast licensees and their affiliates." Both TWC and advocacy group Public Knowledge suggest that CBS is abusing the privileges that grant it free airspace courtesy of the FCC. "Congress created the retransmission law on which CBS justifies pulling its programming from Time Warner Cable subscribers to protect local broadcasters and local programming — not as a gift to media giants to extort even higher fees," writes Public Knowledge's Harold Feld.

Whether the FCC will act, of course, is another matter. Bloomberg has reported that Chairwoman Clyburn doesn't believe the agency can intervene under current laws, and that rewriting them wouldn't help the present disagreement. Likewise, the FCC's comment to The Verge did not suggest any involvement. "The Commission is disappointed that the respective parties could not reach a retransmission agreement," said an official. "Our primary concern remains with consumers and viewers in the affected markets. We urge all parties involved to resolve this situation as soon as possible."

http://www.theverge.com/2013/8/7/4598328/senator-ed-markey-wants-fcc-to-investigate-cbs-blocking-time-warner-cable

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