CBS, Time Warner Cable Carriage Beef Escalates | Adweek CBS, Time Warner Cable Carriage Beef Escalates | Adweek
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CBS, Time Warner Cable Carriage Beef Escalates

Network could go dark in NYC, LA

Photo: Getty Images

After weeks of quietly working to hash out a new carriage deal, CBS and Time Warner Cable are no closer to reaching an agreement than they were on the day the original pact expired. And as has been the case with so many other affiliate dust-ups, both sides are taking their respective beefs to the public.

In a bid to draw support from viewers, CBS on Thursday began running an ad in Time Warner markets warning that the operator could drop the network at any time.

Over a graphic that depicts a flat screen TV wrapped in chains, a male voice alerts viewers that, “Time Warner Cable is holding your favorite shows hostage!”

As clips from CBS shows such as NCIS, The Big Bang Theory and Under the Dome flicker across the shackled TV screen, the voiceover warns that Time Warner Cable is “threatening to drop CBS-2—and it’s not an empty threat.”

The 45-second spot continues in this vein, noting that Time Warner Cable has “dropped 50 channels” in the past five years, and while CBS is working to get a deal done, its signal could be disrupted “as early as next week.” (The extension expires on July 24.) A call to action directs viewers to seek out further information via a website (KeepCBS.com) and a telephone number.

KeepCBS.com enables viewers to send the cable operator a note asking that CBS be spared; barring that, there are links to the DirecTV and Verizon FiOS TV homepages.

Print and radio ads are also in the works.

In a statement released Thursday evening, Time Warner Cable said CBS is demanding that it “pay over 600 percent more than we pay in other areas from coast to coast for the same programming,” adding that it is “negotiating very hard for a reasonable price.”

Time Warner Cable went on to add that the impasse “is not a standard debate over price increases. This is different. CBS’ demand for a 600 percent premium is unprecedented.”

The distribution deal between the No. 1 television network and the nation’s second largest cable operator expired on June 30. In a show of good faith, both parties agreed to temporarily extend the old deal for a few weeks while they negotiated a new contract.

The expired pact was signed in January 2009 and covers CBS-owned affiliates in Time Warner Cable service areas, a collective that includes WCBS-2 in New York and KCBS-2 in Los Angeles. Also on the line in the impacted markets is carriage of Showtime and CBS Sports Network.

Carriage deals tend to be particularly knotty, as they touch on everything from retransmission consent fees to alternative delivery systems (video-on-demand, TV Everywhere, etc.) But as CBS points out, it has never had its signal cut by a cable company—a precedent that may reassure TWC subs.

Under president and CEO Les Moonves, CBS has been unapologetically aggressive about securing premium retrans consent rates. Barclays projects that CBS this year will generate $377 million in retrans revenue, putting it well on the way to its goal of reaching the $1 billion mark by 2017.

For the most part, CBS can command the price it thinks it deserves because it has so much content that consumers crave. “It certainly helps in negotiations to have the NFL, the NCAA [Men’s Div. I Basketball Tournament], NCIS, The Big Bang Theory and 60 Minutes in our arsenal,” Moonves said during CBS’ Q1 earnings call.

Time Warner Cable closed out the first quarter with 11.9 million residential video subscribers. CBS averaged the same number of total prime time viewers over the course of the 2012-13 broadcast season and finished tops among adults 18-49 and 25-54.

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