Time Warner Cable’s agreement to pay News Corp. for over-the-air television programming has opened the door for broadcasters to demand as much as $5 billion a year from pay-TV providers and their subscribers, analysts said.
The companies agreed on a distribution deal Jan. 1, without disclosing the terms. Other broadcasters have also said they may seek payment for programming that’s currently free. CBS has a deal with Comcast, the largest U.S. cable operator, that ends next year, and already collects fees from Time Warner Cable and Dish Network.
News Corp. sought as much as $1 a month per Time Warner Cable subscriber for rights to Fox, home of “The Simpsons” and “American Idol,” two people with knowledge of the matter said. If other networks seek similar terms, cable operators may have to fork out as much as $5 billion a year — and would probably pass the cost on to subscribers, said Craig Moffett, an analyst at Sanford C. Bernstein in New York.
“The broadcast networks are really struggling to find a viable business model,” Moffett said. More…