Fox v. Cablevision: STAGGERING increases!

[The Fat Man]

What makes me laugh is that they "temporarily" restored the service due to Cablevision Internet subs who aren't Cablevision TV subs. I was thinking, what if I was a Dish TV sub and Cablevision Internet sub? I would really be getting it from all ends.

Also, dustoman, my sediments exactly.

 

[rapidturtle]

Hey wait a minute, I have cablevision internet, and I have Dish. I am one of the ones getting it from both ends!!!!!!

 

[sam_gordon]

To wrap this up, I work at a school in a poor neighborhood. Almost every student is on a free lunch program. One day, one student didn't want his pear. He gave it another student. I got into the same arguement with the lunch police who demanded that the first student now pay for the pear, because it wasn't him who ate it. If you give it out for free, then you crap out of luck on how it's used. If the student charged his friend for the pear, I would have sided with the lunch lady, but to demand profit for something you gave for free and in turn was given again for free, makes you nothing but a money hungry greedy bastard. I think I made my point.

You realized you just proved the retrans price agreement, correct? For YEARS, cable and satellite providers were charging their customers in order to receive local channels. So Dish/Direct/Comcast/Charter/TW/etc MADE money by retransmitting the OTA signal, and didn't have to pay the locals a dime. Locals finally said "Enough is enough. If you charge your subscribers for our content, we want a piece". Don't make it sound like satellite/cable companies simply gave the locals away.

 

[The Fat Man]

You realized you just proved the retrans price agreement, correct? For YEARS, cable and satellite providers were charging their customers in order to receive local channels. So Dish/Direct/Comcast/Charter/TW/etc MADE money by retransmitting the OTA signal, and didn't have to pay the locals a dime. Locals finally said "Enough is enough. If you charge your subscribers for our content, we want a piece". Don't make it sound like satellite/cable companies simply gave the locals away.

You are right. However, I'm actually trying say that it's wrong to have the retransmission agreement in the first place. I've come in contact with that guy on a few different discussions and wind up making a bunch of analagies. They do charge their subs for local content, which I think is wrong in the first place. Fix that, and then take away retransmission fees. I feel that will fix the blacking out of local channels.

 

[sam_gordon]

You are right. However, I'm actually trying say that it's wrong to have the retransmission agreement in the first place. I've come in contact with that guy on a few different discussions and wind up making a bunch of analagies. They do charge their subs for local content, which I think is wrong in the first place. Fix that, and then take away retransmission fees. I feel that will fix the blacking out of local channels.

I'm guessing if there was no charge for local content, local stations would have kept "signing off" on the retrans without asking for money. It was seeing the cable/sat providers making money off their content that changed things.

 

[mike123abc]

You realized you just proved the retrans price agreement, correct? For YEARS, cable and satellite providers were charging their customers in order to receive local channels. So Dish/Direct/Comcast/Charter/TW/etc MADE money by retransmitting the OTA signal, and didn't have to pay the locals a dime. Locals finally said "Enough is enough. If you charge your subscribers for our content, we want a piece". Don't make it sound like satellite/cable companies simply gave the locals away.

This is is not a very true statement. Yes some subscribe to cable to get locals that for some reason they were unable to get OTA (including not wanting an unsightly antenna). But, many communities force a low price locals only package on the cable company. It is not like delivering OTA locals is free to a cable company (or DBS). They do have to pick up the signal and deliver it. Miles of cable/amps/customer billing/etc.

It is worse in the case of DBS companies where they have to build a local POP to get the signal. Encode it and send over fiber to an uplink, then build spot beam satellites to deliver the local signal. I suspect even at $5/month, they lose money in most markets, it is a cost of doing business since people will not sub without their locals.

It is not like the DBS/Cable companies have been reselling locals only and making a huge fortune. Instead they are forced to carry the locals to compete.

 

[sam_gordon]

This is is not a very true statement. Yes some subscribe to cable to get locals that for some reason they were unable to get OTA (including not wanting an unsightly antenna). But, many communities force a low price locals only package on the cable company. It is not like delivering OTA locals is free to a cable company (or DBS). They do have to pick up the signal and deliver it. Miles of cable/amps/customer billing/etc.

I was waiting for someone to bring this up. Presumably, cable companies already had "miles of cable/amps/customer billing/etc." set up. They had to in order to deliver the "non-local" stations. So, in order to deliver a local station, a cable company needed to put up an antenna, a tuner, a modulator, and a combiner. That's probably less than $100 worth of hardware. Even if there are 5 local stations, you're at $500 in hardware. I'll be generous, let's even say they spend $10,000 in hardware. $5/month/customer, right? You'd need less than 200 customers to make up your hardware costs in a year. The lines are already going to the subscribers homes. The amplifiers are already in place.

It is worse in the case of DBS companies where they have to build a local POP to get the signal. Encode it and send over fiber to an uplink, then build spot beam satellites to deliver the local signal. I suspect even at $5/month, they lose money in most markets, it is a cost of doing business since people will not sub without their locals.

It is not like the DBS/Cable companies have been reselling locals only and making a huge fortune. Instead they are forced to carry the locals to compete.

I agree and disagree. Yes, DBS companies had a bigger upfront cost to carry the locals. But at $5/month you need 8300 subscribers to make $500,000 (that's 1/2 million) in a YEAR! Something tells me they've made their money back within a year or two (on the outside). So again, what happens once they've made their money? What happens to the local fee? It doesn't get dropped.

 

[Scott Greczkowski]

Here is a letter from the FCC to FOX and CABLEVISION.

Dear Messrs. Carey and Dolan:

We are deeply concerned about the impact of your current retransmission consent dispute on consumers
in Cablevision's service area. As Chairman Genachowski has stressed, both parties share responsibility
for consumer disruption caused by your unwillingness to reach a deal. We are troubled, as the Chairman
said, “that Cablevision and Fox are spending more time attacking each other through ads and lobbyists
than sitting down at the negotiating table.” I know that you are aware that both broadcasters and
multichannel video programming distributors (MVPDs) have a statutory duty to engage in "good faith"
negotiations.1

The Commission has stated its belief that "by imposing the good faith obligation, Congress intended that
. . . broadcasters and MVPDs meet to negotiate retransmission consent and that such negotiations are
conducted in an atmosphere of honesty, purpose and clarity of process."2 We ask each of you to describe
to us how your company is satisfying this important statutory obligation in the context of your
retransmission consent negotiations. In particular, we request that you describe with specificity what has
transpired since you initially began your negotiations, and detail the efforts your company is making to
end the current impasse. If you are aware of any conduct by the other side that you believe violates the
good faith requirement, please so indicate and provide supporting evidence. Please submit this
information to me by the close of business Monday, October 25, 2010.

As you know, your contract dispute extends beyond just Fox and Cablevision. Indeed, it affects millions
of innocent consumers who expect to watch their preferred broadcast programming without interruption.
We urge you to place the interests of these consumers first and conclude your negotiations promptly.
Please call me as soon as possible if you have any questions about this letter.

Sincerely,
William T. Lake
Chief, Media Bureau

Stephanie A. Roy
Steptoe & Johnson LLP
1330 Connecticut Avenue, NW
Washington, DC 20036
202.429.6278 tel
202.429.3902 fax

 

[jabberjoe]

I agree and disagree. Yes, DBS companies had a bigger upfront cost to carry the locals. But at $5/month you need 8300 subscribers to make $500,000 (that's 1/2 million) in a YEAR! Something tells me they've made their money back within a year or two (on the outside). So again, what happens once they've made their money? What happens to the local fee? It doesn't get dropped.

And local stations could start making money on the deal right away by claiming more viewers and charging their marketers more. It is not always cut a dry. There is a symbiotic relationship between the two. What is to be determined is if one side of the relationship has become abusive.

 

[Scott Greczkowski]

You realized you just proved the retrans price agreement, correct? For YEARS, cable and satellite providers were charging their customers in order to receive local channels. So Dish/Direct/Comcast/Charter/TW/etc MADE money by retransmitting the OTA signal, and didn't have to pay the locals a dime. Locals finally said "Enough is enough. If you charge your subscribers for our content, we want a piece". Don't make it sound like satellite/cable companies simply gave the locals away.

Actually they have been paying for retransmission rights for a long long time now.

I personally think the local stations should pay the satellite companies to carry their signal. After all they pay their tower companies to send their signal out to viewers. Satellite is bringing more of an audience to these local off air channels. You do understand that many people cant view their locals even with an antenna. Satellite is doing them a favor by bringing the channels that these local broadcasters are SUPPOSED to serve, plus they pay for the infrastructure to receive and broadcast these channels.

Imagine if DISH and DIRECTV dropped all their locals tomorrow. How do you think the stations ratings would look?

 

[The Fat Man]

It's amazing how quick one small statement can spiral out of control.

1.) Yes: Cable/Satellite makes profit off the ability of having locals.

2.) Yes: That's why there are retransmission fees.

3.) Yes: This practice has existed for a while.

These are the points that Sam Gordon was trying to civilly make. Now people are trying to correct a correction that was a misconception in the first place.

We all know these three facts. I tried to explain in a lengthy argument that I don't agree with them. However, this misconception that first I, then Sam, don't understand these facts needs to end. As the guy that started the comment, I'm saying let's just end it. I don't agree with giving a product for free one way then crying that others are making money off this product that you give away for free, and the fact that the others try to use a free service for financial gain, but obviously we will never come to an agreement on it.

 

[sam_gordon]

Fat Man...

Thank you. I do understand people who say locals shouldn't charge DBS/cable companies to retransmit. And they didn't use to. I do believe stations wouldn't levy retransmission charges if the DBS/cable companies weren't making money from them.

My analogy... you have a blog (I'd say newspaper, but in this day and age... ). You get advertisers for the blog. You find content for the blog that people like. You publicize your blog and you get all kinds of readers. You're happy because your advertisers are happy. Now a company comes along and says "I can send your blog to people that don't have internet!" Hey, great you think... more eyes on your product. Makes sense. Then you find out the company is charging those who don't have internet. Some of you apparently have no problem with that. Fine. But the local broadcasters (and I) do.

 

[david_jr]

Here is a letter from the FCC to FOX and CABLEVISION.

Dear Messrs. Carey and Dolan:

We are deeply concerned about the impact of your current retransmission consent dispute on consumers
in Cablevision's service area. As Chairman Genachowski has stressed, both parties share responsibility
for consumer disruption caused by your unwillingness to reach a deal. We are troubled, as the Chairman
said, “that Cablevision and Fox are spending more time attacking each other through ads and lobbyists
than sitting down at the negotiating table.” I know that you are aware that both broadcasters and
multichannel video programming distributors (MVPDs) have a statutory duty to engage in "good faith"
negotiations.1

The Commission has stated its belief that "by imposing the good faith obligation, Congress intended that
. . . broadcasters and MVPDs meet to negotiate retransmission consent and that such negotiations are
conducted in an atmosphere of honesty, purpose and clarity of process."2 We ask each of you to describe
to us how your company is satisfying this important statutory obligation in the context of your
retransmission consent negotiations. In particular, we request that you describe with specificity what has
transpired since you initially began your negotiations, and detail the efforts your company is making to
end the current impasse. If you are aware of any conduct by the other side that you believe violates the
good faith requirement, please so indicate and provide supporting evidence. Please submit this
information to me by the close of business Monday, October 25, 2010.

As you know, your contract dispute extends beyond just Fox and Cablevision. Indeed, it affects millions
of innocent consumers who expect to watch their preferred broadcast programming without interruption.
We urge you to place the interests of these consumers first and conclude your negotiations promptly.
Please call me as soon as possible if you have any questions about this letter.

Sincerely,
William T. Lake
Chief, Media Bureau

Stephanie A. Roy
Steptoe & Johnson LLP
1330 Connecticut Avenue, NW
Washington, DC 20036
202.429.6278 tel
202.429.3902 fax

I heard a commercial today on a NYC radio station with Fox complaining that Cablevision is negotiating in bad faith and one of their arguments was that CV had pulled their MSG channel from a major television provider.

 

[mike123abc]

Fat Man...

Thank you. I do understand people who say locals shouldn't charge DBS/cable companies to retransmit. And they didn't use to. I do believe stations wouldn't levy retransmission charges if the DBS/cable companies weren't making money from them.

My analogy... you have a blog (I'd say newspaper, but in this day and age... ). You get advertisers for the blog. You find content for the blog that people like. You publicize your blog and you get all kinds of readers. You're happy because your advertisers are happy. Now a company comes along and says "I can send your blog to people that don't have internet!" Hey, great you think... more eyes on your product. Makes sense. Then you find out the company is charging those who don't have internet. Some of you apparently have no problem with that. Fine. But the local broadcasters (and I) do.

If you take Dish for example and look at their profits last year they made about $6/sub per month. I would hardly call that profiteering on Fox's signal (which Dish is estimated to have paid $.25-$.50 per sub/month depending on the market). I have not looked at Cablevision's P&L to make a similar comparison, so will use the Dish one since Dish's contract with O&O Fox comes up at the end of the month.

If Fox is successful and gets their $5/month/sub that would wipe out almost all of Dish's profit per sub over their entire array of channels. What happens when the other 3 networks want the same deal? The cable/DBS company will have to raise prices to compensate, they are not going to lose their profit.

You the sub end up paying. Is it worth $20/month more to get the locals over cable or DBS vs free OTA? This is what Fox wants.

 

[mike123abc]

I did some more research on the CVC profits. Their annual earnings for 2009 after taxes was $286 million. This is over all their operations: phone, internet, cable, MSG, etc.

Fox wants $80 million more for its signal. Do you really believe that CVC made 28% of their profit retransmitting FOX to its cable subs?

Fox was paid $70 million, now they want $150. It was high before, now it is insane.

 

[gdodd12]

So is there any chance we keep our Fox locals on Nov 1st?

 

[Ghpr13]

Fat Man...

Thank you. I do understand people who say locals shouldn't charge DBS/cable companies to retransmit. And they didn't use to. I do believe stations wouldn't levy retransmission charges if the DBS/cable companies weren't making money from them.

My analogy... you have a blog (I'd say newspaper, but in this day and age... ). You get advertisers for the blog. You find content for the blog that people like. You publicize your blog and you get all kinds of readers. You're happy because your advertisers are happy. Now a company comes along and says "I can send your blog to people that don't have internet!" Hey, great you think... more eyes on your product. Makes sense. Then you find out the company is charging those who don't have internet. Some of you apparently have no problem with that. Fine. But the local broadcasters (and I) do.

sam_gordon,
With all due respect, I think your analogy proves just the opposite point. If my blog is free to all who want to read it, and it's making money from ads, then the reason I can ask for an increase in the cost of ads on my blog is due to the number of people reading it. Now if "Z" comes to me and tells me they can send my free blog to people who don't have internet, then I've just increase my readership, thus allowing me to up my ad rates. So why shouldn't "Z" be able to charge for that service to their subs? Why should I be able to charge them for my blog, when they're supplying me a service?
But you might say, Well the only reason "Z" wants to carry my blog is because so many people want it and it helps "Z" get more profits. Yes, that's right...but without "Z" I can't get my blog to all these other people who want it, and these people that want it are the same people my advertisers want to reach, again, allowing me to increase my ad rates.
Like I've said in the other thread on this subject, to me, channels that sell ads and also charge carriers to carry them, are "double dipping" the consumer.

Ghpr13

 

[flyingsquirrel]

So is there any chance we keep our Fox locals on Nov 1st?

There are two chances:

1. Get an antenna

2. If the FCC thinks that cablevision and fox are not bargaining in good faith, the may try to order arbitration on that case. And that may spill over into the dish-fox case. So arbitration may be ordered in that one as well.

Me, I have an antenna.

 

[Slamminc11]

There are two chances:

1. Get an antenna

2. If the FCC thinks that cablevision and fox are not bargaining in good faith, the may try to order arbitration on that case. And that may spill over into the dish-fox case. So arbitration may be ordered in that one as well.

Me, I have an antenna.

I don't watch enough on FOX to warrant the cost of an antenna, and what I do watch I can live without, so...

 

[sethwell]

i wonder now if fox will back off now that NY and Philly are both out of the world series race. while there still will be some fans that want to see the world series it will have less of an interest to viewers in those areas. i bet fox was hoping like crazy for a yankees-phillies world series. too bad now