The on-going dispute between CableVision and the Scripps Network Interactive of Cincinatti, only underlines how much cable TV gouges its captive subscribers.
The dispute started when negotiations over a new contract between CableVision and Scripps broke down completely. Scripps had been providing Cablevision viewers access to HGTV and the Food Network , two programs which Scripps produces. The first that most cable subscribers knew about the dispute was just before the New Year when CableVision began airing messages that, as of January 1st 2010, viewers would no longer be able to watch these two channels. In a self-serving message that aired constantly,Cablevision blamed Scripps for being unyielding in its demands and for cutting off negotiations and suspending service. Like most viewers , I tended to blame Scripps at the time . However , the true state of affairs appears to be quite, quite different.
According to published reports from independent sources, Cablevision was paying Scripps a total of 21 cents ( 13 cents for HGTV and 8 cents for Food Network) per subscriber per month. This is very low considering that the two channels are among the most popular ones on cable ; the viewer base has increased by double digits for the past two years. By way of contrast, I believe that Cablevision pays $ 4.50 for rights to the two ESPN channels. When you consider that Cablevision collects an average of $ 83 per subscriber per month, I think the 21 cents it pays Scripps are peanuts.
Scripps’ position is that it wants the new contract to be fair . It points out that Cablevision is paying itself much higher fees for two other channels which it owns and which are nowhere near as popular with viewers. As for the charge that it is asking for a 200% raise, Scripps says that all it is asking for is a fair shake , much less than the value viewers put on its services. ( An independent polling service has viewers puting a value of $ 1.03 for Food Network and 73 cents for HGTV ; both figures are per month per subscriber).
When one considers the average monthly cable bill and the relative values of channels, I don’t think Scripps is being at all unreasonable. No matter what settlement is arrived at , the increased cost is sure to be passed on to subscribers and it will be less than 50 cents even with a 200% increase to the current fee structure. If CableVision is taking a hard line in it’s negotiations , I think it a) wants to set the tone for negotiations with other content providers and of course to maximize it’s own profits and b) because it feels it is negotiating from a position of strength. It will continue to charge subscribers the same monthly rate but Scripps , on the other hand , stands to lose millions in revenue as the impasse goes on. Furthermore 65% of CableVision subscribers have Optimum Triple Play ( meaning they get cable services + Internet Access + telephone sevicesfrom Cablevision ) and historically, such customers are unlikely to terminate their contracts and go elsewhere .
No matter how this dispute is settled the only loser will be the consumer. Either there will be a settlement and the increased costs plus a markup will be passed along to the consumer OR it will not be settled and we will no longer have access to the Food Network and HG TV. A lose-lose situation for you and me.
The problem is that consumers have no real alternatives. No matter whether we go to one of the satellite TV services ( Direct TV or DishTV ) or to Verizon FIOS we will be paying for a bunch of channels that we do not want. All these companies boast that they provide access to scores of channels but the truth is that most of us only watch ( or want to watch) about 15 or 20. However, we cannot cherrypick the ones that we want . Thus I find myself with channels like Home Shopping Network, QVC, Nickelodeon, BET, SNY, Headline News, MSNBC, SciFiTV, Spanish Language channels and dozens of others that I never watch. Why for instance would I want both Fox and CNN ? Watching both would make me a very confused individual. Give me CNN, take away Fox , please. ( Someone else might feel exactly the opposite and he should be able to choose what he wants ). On the other hand , I would love to be able to watch BBC America but it is not an option that Cablevision gives me.
Mike Virgintino @ examiner.com has a very sensible proposition, “One option would have cable and satellite companies eliminate the various channel packages that now include a number of channels that viewers do not watch and do not want in their homes. These packages could be replaced with a price per station deal. Each basic channel could cost $1 or less. A viewer would be charged based on the mix and match of selected channels. Providers would be allowed to charge a minimum of $25 per customer. A home would have the option to select Food Network as one of its stations but not choose ESPN Classic. It can choose the various cartoon networks but not six Spanish-language stations that it never watches. Certain channels, such as HBO, can be placed on a premium level. Movies can remain on the pay-per-view plan. “
Alas, I don’t know when that will happen , if ever. This whole mess was created when Congress gave exclusive franchises to cable companies in their respective areas. I know the reasoning was that it would cut down on duplication of cable laying and would hold down capital costs ; what it has done is eliminated competition and created virtual monopolies in which captive consumers have no real choice.
One disgruntled member of the public wrote in to say ” Cablevision is an evil corporation with little regard for its customers and community “. I agree, and the same could be said about its rivals, any of them.