The war of words between Time Warner Cable and Fox on Friday became more heated, as the programmer warned that viewers may be deprived of American Idol, 24 and NFL playoff action should the two sides fail to hash out a new carriage deal before the end of the year.
In a bid to win support from consumers in at-risk markets like New York, Los Angeles and Dallas, Fox has launched a series of promos accusing Time Warner Cable of playing fast and loose with the truth.
“Time Warner Cable isn’t playing fair and you could lose Fox because of it,” declares one spot, adding that the cable company “is using programming costs as an excuse to raise your bill while they continue to rake in billions in profits.”
The ad goes on to note that the operator’s refusal to compensate Fox for retransmission consent comes on the heels of “a 20 percent rate increase in some cities.” (In New York, TWC’s standard cable service will increase 6 percent, to $46.75 per month, while the digital starter package will increase 7 percent next year, to $55.95 per month. The monthly cost of renting a DVR from the operator will increase 18 percent, to $12.95.)
As the spot concludes, viewers are advised to “tell Time Warner Cable to stop making excuses and continue to give you the programs you want at a price that is fair,” whereupon the voiceover throws to a Web address (KeepFoxOn.com) and a toll-free telephone number (866-Keep-Fox).
Among its many bells and whistles, the KeepFoxOn site alerts visitors that they may miss out on Fox’ coverage of three BCS Bowl games––the Allstate Sugar Bowl, Fed Ex Orange Bowl and Tostitos Fiesta Bowl––should the parties fail to agree on a new carriage deal.
The Fox campaign comes on the heels of a Time Warner Cable initiative that launched in late November. The “Roll Over or Get Tough” effort prompted subscribers to vote on whether the MSO should acquiesce to programmers’ demands for increased affiliate fees. While the cable company did not identify the networks with which it is sparring, the Get Tough site claims that some programmers were looking to increase their carriage fees by as much as 300 percent.
Negotiations between Fox and Time Warner Cable effectively have stalled over the retrans issue. Fox is seeking compensation for its over-the-air programming at a rate of around $1 per subscriber per month. By way of comparison, CBS Corp. CEO Les Moonves has said that he expects his network to take in retrans fees of around 50 cents per sub.
According to Fox, some 13 million TWC households are at risk of losing their access to the network on Jan. 1, 2010. Also in danger of going dark are the Fox cable channels, which include: FX, Speed, Fuel TV, Fox Soccer Channel and Fox Sports en Español, plus the nine regional Fox Sports nets.
In a note to investors, Pali Research media analyst Richard Greenfield said that Fox was in a similar position with Cablevision a few months ago, but rather than push for the $1 retrans fee, the programmer agreed to a one-year extension of its current deal. That said, Greenfield believes the current situation is likely to result in the “Fox broadcast and cable network signals being dropped,” adding that it’s likely that “the two sides will ultimately settle...within days of [Fox’ going dark on TWC], at a figure closer to $0.50-$0.60/sub/month than $1/sub/month.”
The most high-profile carriage conflict of the last 12 months played out in December 2008, as TWC and Viacom engaged in a very public battle that could have resulted in a blackout of all MTV Networks programming across the MSO’s [then] 13.3 million-household sub base.
Both parties worked into the pre-dawn hours on New Year's Day, arriving at an agreement in principal that kept the MTV nets from going black and allowed for a formal deal to be reached a few days later.
The last time a major broadcaster was pulled from a cable lineup was in spring 2000, when the Walt Disney Co. and TWC couldn’t come to an agreement on a new contract for ABC’s owned-and-operated stations. Viewers in 11 markets woke up on the morning of May 1 to a blue screen that read, “Disney has taken ABC away from you.”