Cablevision Offers To Pay Fox 'TWC Rate' For a Year [Multichannel News]
In an effort to finally resolve their retransmission dispute with Fox, prior to the first game of the World Series, which Fox has exclusive rights to, Cablevision yesterday offered to pay Fox the same rate that Time Warner Cable pays for the Fox broadcast stations in New York and Philadelphia. Fox rejected Cablevision's offer stating that they were unwilling to unbundle the negotiations for the over-the-air stations (that have the exclusive rights to the World Series) from the two, far lesser-viewed cable networks, Fox Desportes and Nat Geo Wild.
Fox's response highlights the fact that a free market does not exist in retransmission consent negotiations.
Because the law allows big media companies, who own both broadcast TV outlets and cable networks, to use their monopoly power in the negotiations. In this case, the exclusive (monopoly) rights to the World Series gives Fox the ability to demand that Cablevision carries their lesser-viewed cable networks in order to get a deal for the broadcast stations that are exclusively carrying one of the most important sporting events of the year.
Big media companies often demand big fees and preferential placement for their fledging networks on cable systems in return for carriage of their high demand channels. The result? Their low-rated networks are forced onto widely distributed tiers, taking up valuable bandwidth that could be used for much more consumer-desired services and causing large numbers of cable customers to pay high fees for channels that they really don't want.
This practice understandably helps consumers arrive to the conclusion that they should have the right to choose and reject each and every channel that they want to receive. I have opposed government mandated a-la-carte in the past and continue to oppose it in a free market. I still believe government mandated a-la-carte would ultimately lead to much higher prices for cable customers in normal market conditions and I stand by that view.
But if network owners continue to drive the price of their channels up in totally uneconomic ways, by using monopoly powers like exclusive rights to the World Series, then maybe a-la-carte begins to make real economic sense for consumers.
Alternatively, we seem to be living in a world where broadcasters and some networks are increasing their fees by 50 to 200% in one shot and forcing carriage to many viewers who don't really want to watch their channel.
That simply doesn't work over the long term and something has to give.