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April 23, 2014

Oscars Held Hostage in Another Cablevision Dispute

by Gary Susman, posted Mar 2nd 2010 12:00PM
Some three million cable subscribers in three states may miss Sunday's Oscar telecast on ABC, thanks to a subscriber-fee dispute between New York's WABC-TV (and its parent company, Disney) and Cablevision over fees the broadcast station wants to collect from the cable service provider.

On Monday, New York City's WABC began telling Cablevision customers in New York, New Jersey and Connecticut that it would pull its signal after midnight Sunday morning if a deal isn't reached by then. Cablevision, in return, issued a statement warning customers that ABC now wants to charge for what it used to give away for free, and that Cablevision customers might have to cough up an extra $40 million a year if ABC gets its way.

The threatened blackout follows two similar episodes earlier this year, including one involving Cablevision, but it probably won't be the last, as broadcast networks and basic cable channels are demanding a bigger share of cable subscription fees.

Increasingly, broadcast channels that have for decades aired their programming for free are demanding that cable providers pay them for the right to air their shows, just as they pay cable channels. That was what the threatened blackout at the beginning of the year was about in which Fox nearly pulled its signal from Time Warner Cable until a new deal was reached.

That's also the impetus behind the ads WABC began airing Monday, aimed at Cablevision's 3.1 million subscribers in the tri-state area. The Disney-owned flagship ABC station in New York City claims to be the most highly-rated local station in America. "With the help of our viewers, we've built ABC7 into the most watched station in the country, and have been trying for two years to get Cablevision to acknowledge the station's value to their business," said WABC president and general manager Rebecca Campbell in a statement. "Despite our best efforts, it has now become clear that Cablevision has no intention of coming to a fair agreement. We can no longer sit back and allow Cablevision to use our shows for free while they continue to charge their customers for them. We've worked too hard and invested too many millions of dollars in programming and community outreach, to be taken advantage of any longer -- especially since our viewers can watch their favorite ABC7 shows free, over-the-air, or by switching to one of Cablevision's competitors."

Indeed, if Cablevision subscribers lose access to WABC, they could still watch the channel for free over the air (if they have a digital-to-analog signal converter box) or through such rival service providers as Verizon FiOS, AT&T U-verse or satellite provider DirecTV. Not to mention that many ABC shows are watchable online at ABC.com after they air.

Cablevision responded Monday with a statement of its own. "It is shocking that in these difficult economic times, ABC Disney is threatening to remove WABC unless Cablevision and its customers pay $40 million in new fees for programming that it offers today for free, both over-the-air and online," said Charles Schueler, Cablevision's executive vice president of communications. "It is not fair for ABC Disney to hold Cablevision customers hostage by forcing them to pay what amounts to a new TV tax. We urge ABC Disney not to pull the plug and instead work with us to reach a fair agreement."

Both sides are taking their fight to the Web. Cablevision has a Web page that contains an e-mail form letter to ABC, a toll-free phone number (1-877-NO-TV-TAX) and some statistics. The provider argues that it's already paying WABC parent Disney $200 million a year for its programming, including its cable channels. The most expensive basic cable channel in America, Disney's ESPN, collects a nationwide average of $4.10 per subscriber per month. If Cablevision's claim that WABC wants $40 million per-year is accurate, that would add up to $1.08 per Cablevision subscriber per month.

WABC's web page at saveabc7.com also has an e-mail form and a toll-free number (1-877-990-ABC7), a countdown clock to the threatened March 7 blackout, an alternate service provider search engine (searchable by zip code), and embeddable video featuring clips from ABC shows.

WABC's Message to Cablevision Customers

Cablevision fought a similar battle in January against Scripps, parent company of the Food Network and HGTV. Scripps pulled both signals from Cablevision for three weeks after talks stalled over Scripps' demand for increased fees. The two sides did finally come to a deal, the terms of which have not been disclosed. (Scripps, which had been collecting no more than 21 cents per Cablevision subscriber per month for both channels combined, told Inside TV at the time that it was seeking no more than a 42-cent combined raise for the two channels. Cablevision told Inside TV that Scripps was seeking $20 million, or an additional 54 cents per subscriber per month.)

It's not clear yet if WABC and Cablevision can emulate Fox and Time Warner Cable and come to a deal before WABC darkens its shows, or whether the fight will play out like the one between Cablevision and Scripps, with a period of dark screens before a settlement is reached. But viewers in New York, New Jersey, Connecticut, and elsewhere can probably expect a lot of showdowns like this one in the near future -- and they can also probably expect their cable bills to rise incrementally with each one.

UPDATE: Cablevision has posted its own embeddable video, a message to its customers, outlining the arguments it has made elsewhere.

Cablevision's Message to Its Customers About WABC
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