My Opinion on the Latest Cablevision Fiasco

As millions of people around the world look forward to watching the Academy Awards on ABC this Sunday, many New Yorkers who have Cablevision as their cable television provider may find the network blacked out.  Cablevision and Walt Disney, ABC's parent company, are in a bitter dispute over fees to air the broadcast network to the cable goliath's subscribers.  Click here to read the latest update as of this writing.

Luckily for me, I dropped Cablevision a long time ago and am now a very happy DirecTV customer.  I become disgruntled with cable back when they refused to air the YES Network, the New York Yankees' brand-new-at-the-time channel.  Being a life-long Bronx resident, not only was I shocked that Cablevision didn't seem to do everything it could to make sure its Bronx residents had access to the baseball games of the Bronx Bombers, I was especially disappointed with their nonchalant attitude to my repeated calls requesting status updates and any information on what to expect.  After getting the runaround for months, I gave up on Cablevision and I haven't looked back since.  (I confess, the company still provides me with my Internet connection but I refuse to pay them a single penny for television programming.)

New Yorkers are becoming used to these fee wars between cable companies and television content providers -- a recent dispute with Scripps Networks resulted in the popular Food Network and HGN being blacked out on Cablevision for a period of time.  TimeWarner Cable customers in New York faced a threat similar to the ABC/Cablevision imbroglio when News Corporation tried to get fees from the cable company for transmitting its FOX broadcast network.  (Read my commentary about that here.)

Now, ABC and Cablevision are waging a public propaganda war as their negotiators try to reach a deal behind closed doors.  I side with ABC on this.  Cablevision's commercials have been arguing that they already pay millions of dollars to Disney and that ABC is a free broadcast network anyway.  But such arguments are misleading.

First, Cablevision pays Disney for its other cable channels such as ESPN, ABC Family, and of course Disney Channel.  But the ABC broadcast network is not part of that payment mix -- the Walt Disney Company right now gets nothing from Cablevision for airing ABC. Cablevision's statement is basically comparing apples and oranges.  It's like saying, "I went to a department store and spent X amount of dollars on merchandise, so the owner is just being greedy when they want me to pay for this other item that I took without paying."

Cablevision then argues that ABC is broadcast over the public airwaves for free and some ABC programs are even available for free online, so Cablevision shouldn't have to pay when it offers ABC to its cable subscribers.  My counterpoint to this is that if Cablevision is charging money from its subscribers for a basic package that includes the local broadcast network affiliates, than those broadcast networks deserve a fair piece of the revenue pie. If Cablevision is making money from its subscribers for ABC content, then ABC and its parent company rightfully deserve some of that money. Just because ABC's business model is based on free over-the-air broadcasting with advertiser support does not give a third party like Cablevision the right to take that programming, distribute it through its cable lines, and charge customers a subscription fee for that otherwise free content without paying a royalty fee to the content creators.

There are of course more complicated factors involved and Walt Disney isn't a complete victim in the matter, but I have been opposed to the so-called "cable monopoly" for a long time and think their fee system is outrageous.  Their customer service record still leaves much to be desired, and their misleading commercials in this latest dispute is yet another example of their flawed public relations response when these types of things happen (far too frequently it seems).

People should be vocal to their cable companies, letting them know their displeasure, and seek alternatives (like satellite television) when their comments are not taken seriously.  People shouldalso contact their elected officials to request that other cable companies be allowed to compete in any given area where the current company isn't providing satisfactory services or heeding the voices of the customers it claims to serve.

I hope my fellow New Yorkers get to watch the Oscars on ABC this Sunday if they have Cablevision.  I'll be thinking of them when I'm tuned in.


Anonymous said…
As someone who has reviewed the financial statements of cable companies, cable company's programming costs go up by insane amounts each year, which is a big part of what drives the increases in what cable companies charge you. I am not a happy camper when TW raises my fees every other month, but I have to say I am not in ABC's corner on this one. Cablevision's basic cable charge covers lots of content for which they do have to pay, and the cost of building, maintaining, and upgrading their infrastructure (which is in the billions, and also explains why there are so few 'overbuilders' -- like RCN in NY -- that provide competition). ABC is trying to find a way to make more money on the traditional broadcast channels since ad revenues are hit in the age of TIVO. Tough situation, but this isn't an evil cable company scenario.

Nick said…
Had a great discussion about this on Facebook.

Glad to see ABC and Cablevision reached an agreement. Too bad their propaganda war got to be so ugly.