CBS Calls Time Warner Cable Proposal a ‘Sham’ — and Blackout Continues

CBS says Time Warner Cable isn't "negotiating in good faith"

  • Share
  • Read Later
Mario Anzuoni / REUTERS

Cast member Robin Williams speaks at a panel for the television series "The Crazy Ones" during the CBS portion of the Television Critics Association Summer press tour in Beverly Hills, California July 29, 2013.

Media titan CBS blasted a proposal from Time Warner Cable to resolve the ongoing CBS blackout in the nation’s top media markets as a “sham,” as the two sides seemed to dig in for an extended battle.

For a fifth straight day, millions of cable viewers remained without CBS, the highest-rated broadcast network in the country. CBS is home to popular programming such as “The Big Bang Theory,” “Big Brother,” “NCIS,” “60 Minutes,” and, come fall, NFL football.

On Friday night, Time Warner Cable, the nation’s second-largest cable company, yanked CBS programming from its customers after the breakdown of negotiations between the corporate giants over so-called retransmission rights, which cable and satellite companies pay to broadcasters to carry their channels. According to published reports, CBS had been asking for an increase from Time Warner Cable of about 100%, to $2 per subscriber from $1. By comparison, ESPN commands more than $5 per subscriber, according to industry estimates. (Time Warner Cable was spun off as an independent public company from TIME parent Time Warner in 2009.)

On Monday afternoon, however, Time Warner Cable seemed to lay out a path through the impasse. In a letter to CBS chief Les Moonves, Time Warner Cable CEO Glenn Britt proposed that CBS could return to Time Warner Cable customers on an a la carte basis. That would mean that individual cable subscribers could choose to buy CBS programming for an additional cost on top of their normal cable package fees. Britt said such an arrangement would “allow customers to decide for themselves how much value they ascribe to CBS programming.”

This suggestion shocked many industry observers, because a la carte pricing has long been the bête noire of the cable industry. Giving consumers the ability to pick and choose channels would undermine the entire cable industry business model, which has long been based on selling bundles of channels to subscribers. By raising the specter of a la carte pricing, Time Warner Cable was essentially calling the CBS price increase a bluff — and then increasing the bet. In effect, Time Warner Cable is saying to CBS: “You think your programming is worth twice what we’ve been paying? Well, let’s let the consumers decide.”

(MORECBS, Time Warner Cable Blackout Drags On as Consumers Fume)

In a strongly worded response, CBS turned around and accused Time Warner Cable of bluffing. “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,” CBS said in a statement emailed to TIME. “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.”

Retransmission consent fees have become substantial sources of revenue for broadcasters, and have led to financial disputes between broadcasters and cable and satellite providers. CBS, under president and CEO Les Moonves, has been particularly aggressive in retransmission fee negotiations. As the talks deteriorated leading up to Time Warner Cable’s blackout of CBS, Moonves declared, “We’re at war with Time Warner Cable.”

On Friday, CBS also blocked Time Warner Cable customers from CBS.com. That decision alarmed public interest groups. “CBS, by blocking all Time Warner Cable broadband subscribers in every market, regardless of whether or not they subscribe to Time Warner Cable’s video services, has crossed the line from hardball tactics to outright abuse of consumers,” said Harold Feld, senior vice president at D.C.-based consumer watchdog Public Knowledge.

29 comments
Juggs64
Juggs64

What else can we do as TWC subscribers right now but bend over and take it?? Until more networks get all their content on the internet where the ads on their site pay for viewership, we don't have a choice. Too many "exclusive" deals being made were content is only available in certain places. If CBS gets double their prior asking price, what's keeping FOX, ABC, NBC from trying the same thing? Is deregulation the answer?? Who knows..Content needs to be free flowing and that is a long time away...

shawn-g
shawn-g

This is great! Let TWC customers pay for CBS. In fact, let them all refuse to pay and find out how great CBS is over the air.  While your seeing how good OTA HD is, find all your other local affiliates and drop cable all together.   

All sarcasm aside.  I think this fight is long over over-due.  I'm very interested in how it plays out; I think leaving it up-to the customer is a fantastic choice.  

HAMNC
HAMNC

TWC, in many cases, has a monopoly in particular areas.  They are abusive and care nothing about their consumer base.  My family was forced to endure them until Dish came out with a new satellite dish with a different orbit.  BEST day in history!  TWC will lie, cheat, and steal to gain every cent they can from a consumer.  CBS is acting appropriately, and in line with other network stations.

CalebMurdock
CalebMurdock

Time-Warner pays CBS to rebroadcast their station apparently because CBS is providing "content", and content is what's considered valuable.  However, CBS's content also comes with commercials.  By providing a larger audience to CBS, Time-Warner should be increasing CBS's ad revenues.  That being the case, I'm not sure why CBS is the one which is getting paid.  By trying to squeeze more money out of Time-Warner, they are forcing T-W to increase their subscriber fees, which are already way too high.

My point of view is that broadcast stations should provide their content to cable operators for free, and be glad that they are getting the extra exposure so they can charge more for their commercials.

HollyKick
HollyKick

in short whose fault is this btw ... i have stopped reading news, i rely only on comments to understand the news.

jjjohnson03301216
jjjohnson03301216

My life does  NOT evolve around what my carrier does and  (grammar check too late)



jjjohnson03301216
jjjohnson03301216

I have been with Time Warner since 1999.  Here is the deal:  when CBS-Showtime went dark, my only concern was 'dexter"  I don't watch much Tv but I love this series.  So, I missed it Sunday and guess what-I woke up on Monday and the world had not tilted on its axis.  As is the case for everything, look at the last 6 years, its just about change.  I no longer care about Showtime.  My life does evolve around what my carrier does and does not offer.  This is much to do about nothing.  Sorry for the football fans, my family is a big part of that elite group.  But like I told them, go to the local sports bar and watch it for free.  if I never pay for Showtime again, its fine with me.

JoeyPeralta
JoeyPeralta

I still have CBS in our Cincinnati area but we don't Showtime yet since CBS-Time Warner problem last Friday. Instead switching Other Providers such as Direct TV and Guys you need to take your time until they reach agreement. For Example Last Year, Direct TV had pulled out Viacom Channels for 2-3 weeks and Direct TV Costumer have to wait until they agree which They did. In Order to Bring Back CBS on TWC get more likes and follow this link at http://ifunny.mobi/i/0HLAfxyE1

SantaElf
SantaElf

I can easily connect my antenna for the only few programs I do watch on CBS. So I say drop CBS from TWC and let them go a la crate. The fact that CBS has blocked all TWC internet customers tells you who is really not playing nice in the sandbox. CBS is the sham in this case.

Dude_who_cares
Dude_who_cares

Does anyone realize that you can watch CBS over an antenna and in HD? Let the morons fight it out, cancel your TW cable and buy a $9 HD antenna and your good for a few local channels and ABC, NBC, CBS, and FOX (unless they some how manage to pull enough strings to drop the broadcast service). Then for a month's payment to TW go out an buy yourself an internet connected set top box. Trust me the cable companies are scared to death right now. They all now provide traditional phone service, who among you has dropped your home phones and only use a cell phone now. Well the same is happening with cable, more and more people with getting tired of either A) switching provider to provider to get the best deal, giant pain or B)  tired of being a good customer who just pays the monthly bill even though it continues to increase every couple of months.  

spookiewriter
spookiewriter

I am offended that 2 billion dollar companies are throwing customers under the bus.

DeweySayenoff
DeweySayenoff

It's one thing to offer one channel as an ala carte choice.  That's called "grandstanding".  If they had offered ALL channels as ala carte, then it would have been relevant and newsworthy.

I cut the cable TV cord three years ago. I miss the Mythbusters and that's about it.  And I can catch episodes online.  The more cable providers cost, the more people like me will go to streaming services.  Ala carte programming is the only thing that will save cable TV.  But they have to be serious about it.

If Time Warner Cable didn't do this to ESPN years ago, it won't to CBS.

seasons2216
seasons2216

I am sorry, but it is all getting out of hand, $5 a month for per customer for ESPN??? And then all of these stations "STILL" make money from commercials, which was the "PERK" of having cable when it got popular in the 80's. The networks are getting out of hand! And now this digital crap??? You have to pay for a box no matter what level of cable you have now. If you get anything more than 23 channels you pay more for their bigger box. And 1 million dollars an episode they have to pay some of these actors on regular TV?? Don't get into TV if it's not enough money for you then. And the executives for all of these networks, billionaires who don't care about customer service. "We are the customer, and cannot afford all of you anymore!" ... I knew their was going to come a day soon when WE couldn't afford to purchase their stuff anymore and the only thing they can do is keep upping the prices so they can make their record profits and eventually when no one can afford it anymore, they will go away. This will happen with everything soon... - Should have let the stock market crash so it could re-set itself, but that wasn't going to happen due to the conflict of lining politicians pockets.

NWLB
NWLB

I cut the cable months ago, I'll buy an antenna before I re-subscribe to cable TV bundles.  But for CBS to block Time Warner broadband access is taking this a step too far.  If they do that once, they will then think they can charge Time Warner for every broadband subscriber that access' their domain.  

If CBS thinks they are going to morph their broadcast TV into a combined offering online and off, they can forget it.  

This is such a shell game anyway.  Both sides know the existing model is imploding.  They know streaming and online access, which also means ala carte, is the future.  Time Warner has the edge because people still want and need broadband.  

HelmyElsaid
HelmyElsaid

Continued battle(Legal case at USA court against Obama,USA government,UN,viodafone company-As my documents at : www.helmyelsaid.blogspot.com)

NebuchadnezzarII
NebuchadnezzarII

As long as TW drops their monthly billing by $2 a month, I'd do CBS ala carte. Of course, I don't bother, because for a whole $30 I bought an HD antenna and get all my broadcast channels free. And to top it off DirecTV and I believe Dish as well don't bother charging separately to provide broadcast network programming anymore (it was just $4 on DirecTV).

So the whole argument is kinda moot. Either TW coughs up to rebroadcast, or consumers can go satellite or antenna for nearly free.

BobBlock
BobBlock

I for one support TW 100%. CBS and the other 'off-air' channels should receive no retransmission payments from CATV operators. They have been free to air and should remain that way. They actually should pay the CATV operators to carry their channel(s). Without cable carriage their audience base would drop sharply. If I was TW I would let the customers decide whether they want to pay on an ala carte basis or let them put splitter on the line and pick up CBS via an ordinary antenna for free.

sbelle
sbelle

Has anybody researched the actual cost of providing cable to what they charge?  It's got to be one hell of a markup!  I'm at 200 a month for cable and internet service - I'm seriously considering dropping cable and just finding shows via internet - screw you Time Warner.

Mickiee
Mickiee

I say ala carte everything.  CBS will survive and thrive.  Yet many others, that ride on the coat tails of the top 10%, will fold.  I'm paying over $130/mo and I don't have one single premium pay channel (HBO, etc.)  CBS is not only the #1 broadcaster, they're the #1 network on cable, and yet they're only paid a fraction of what ESPN gets. T-W needs to look at paring back the "coat tails" and hope they get this resolved before NFL kicks in.

The cable model has maxed out.  During this past week, my wife and I have watched Netflix "tv" three out of the past seven nights via Apple-TV.

benn.stoned
benn.stoned

CBS can bit me!  They cancel shows I love like Jericho and Moonlight, but have FIVE forensic science shows on with the three CSI's and the two NCIS'.  I will not pay for CBS.  Further more, I am all for an ala carte biling because there is way too much crap that I never watch, yet I am paying for it.  It is time for TV entertainment to go thru a survival of the fittest stage and allow the consumers to pick and choose what they will pay for.  If it doesn't come soon, Time Warner can kiss my subscription good bye!

wrathbrow
wrathbrow

Cable and Sat rates continue to rise sharply and much of that is based on the so called 'broadcast' networks charging increased rates for redistribution. Cable TV is loosing subscribers as more people use streaming services. I certainly don't want to pay those higher fees to cover the costs of the sports channels and shows, which are a big part, because I'm not much of a sports fan. Ala cart may be the future.

rbensuaski
rbensuaski

I won't pay. Besides, ABC since the last season, has become so much better than hoers channels.

auronlu
auronlu

@jjjohnson03301216 Why aren't you cutting cable, though, if you don't care which shows are available to you?


Just get Hulu or Netflix and save a ton of money.

CalebMurdock
CalebMurdock

@nhuss79 Broadcast was better when it was analog.  You might get a fuzzy image, but at least you got an image.  If you don't get a good signal with digital, it breaks up.  I just spent $130 on a big antenna, and I'm still not getting all the stations I think I should get.

jlkrause1
jlkrause1

@sbelle 

Some smaller cable companies actually barely make a profit.

Charter Communications (my area) has Never made a profit.

TWC? Probably doing OK, at least.

But Cable/Sat companies paying for the same thing the networks give-away free over the air and online is just plain stupid.

Like asking some guy selling bottles of water from Niagara Falls to pay the US and Canada for the water first.

All they do is Deliver the stuff, a Service to the networks. The payment model is backwards.