Bright House Not Looking So Bright
As I write this, the battle between LIN Television and Bright House Networks continues into its second day. The parent company of WISH-TV (Channel 8), WNDY-TV (Channel 23), WIIH-TV (Channel 17) and the LWS Cable Channel is at odds with the company that provides cable television service to around 135,000 customers in Indianapolis’ center city and outlying northern suburbs.
Neither side could agree to terms moving forward on carriage of the television stations and cable channel, so all of them are no longer being provided to Bright House’s customers, of which I am one. No CBS. That means no CSI…no David Letterman…no Katie Couric. (OK, two out of three ain’t bad.)
At issue, is the request from LIN that Bright House pay a small fee to carry the popular channels. Under Federal law, the TV company has the right to be compensated for the product that Bright House takes and resells to their customers.
LIN is seeking less than a penny a day per cable customer. Small change in WISH-TVs case for one of the most important channels on Bright House’s system.
I know my biases are showing, big time. But, I’m a strong believer that anyone who takes a product and resells it should compensate the rights holder, in this case, LIN-TV. It would be akin to someone renting a DVD at Blockbuster and charging people to watch it in a theater. That’s illegal.
Bright House pays for a lot of its less popular programming. The monthly cost for a channel such as ESPN is in the two dollar/subscriber/month range. Sure ESPN is popular but it’s no CBS, which is only looking for a fraction of what ESPN costs.
I’ve been involved in these “retransmission consent” negotiations for years. I understand that the cable giant doesn’t want to add to its costs. I hate it when the program suppliers we use, such as Paramount Television, are able to raise the license fees for programs such as Judge Judy. But that’s business.
The cable guys claim that if they have to pay for the ability to carry WISH et al, they will have to pass along the cost to customers. That doesn’t make sense. Our costs go up. See Judge Judy example above. But, using that as the basis of raising our commercial rates, falls flat. I have to find the expense savings elsewhere or make the decision to tell Judge Judy good-bye.
And other resellers do have deals to pay the broadcast stations. I’m not privy to LIN’s deals, but am guessing the satellite guys have no problem realizing the value of having CBS and their other offerings available to satellite customers.
Bright House and other resellers have to wake up and realize that the broadcast stations, such as Channels 8 and 23, make up a huge amount of the viewing on their systems. Think of the half dozen favorite channels you watch. I’m betting at least three or four are the local stations.
Bright House and its brethern could get away with this when they were monopolies and carved out exclusive territories. No, they didn’t collude but the cost of “overbuilding” on a competitor’s territory didn’t make sense. So we got quasi-monopolies who were only regulated, to some extent, on price by the cities that controlled their franchises.
But those days are long gone. With two major satellite providers and others such as AT&T and Verizon offering similar services, they are in real danger of losing customers. Actually, not in danger. They are losing customers. Each month, data is released on the number of television households subscribing to cable, to alternate delivery systems (ADS) which includes satelliteand phone companies or receiving local stations over the air. The trend is a decrease in cable penetration. Current subscribers and new residents are turning to ADS and the percentage of homes using antennas to get their TV for free is increasing.
Customers get angry with both parties. They could care less about the business end of things. They want their CBS, My Network and Univision programs. And, carriage of the Colts game on CBS this Sunday at 1PM has the telephone lines to DirectTV and DishTV humming as Bright House’s customers look to a way to see the game. I’m guessing the sports bars will be packed if they don’t come to an agreement.
I’m also betting Bright House is losing customers. Channel 8 is playing a gutsy game. Their faithful viewers may stray and find other favorites. Their advertisers may seek a rebate for undelivered Bright House households.
I doubt it. This is a temporary blip. Unless it goes for a very long time, Channel 8 won’t lose its long-time fans. And the effect on ratings by not counting Bright House households will be pretty minimal.
But, Bright House, in my opinion, is driving its customers to seek other alternatives. And, the loss of those customers is permanent.
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I’m incredulous that brighthouse would do this since AT&T U-verse is now available!
hi don!
please correct me if i’m wrong- aren’t they looking for a penny per customer per channel per month (.01×4x30) ?
that adds up to $1.20 per month rather than .30.
or, did i misinterpret the original story?
retrans $$$ is nexstar’s talking point every qtr.
btw- nxst, the stock, just closed at a new 52-week low earlier this week; ~ $2.
I’m not sure it’s “less” than a penny for each of the four channels. Maybe a quarter for WISH, maybe the same for WNDY and just clearance of WIIH and the LWS channel.
Retrans revenue will probably be the talking point of every broadcast company before long. Cable’s enjoyed dual revenue streams, dipping into the TV revenue market to sell ads while charging customers for viewing.
Sometimes, it seems like there are more commercials on pure cable channels.
As for Nexstar, is there a media or any other other company that didn’t close last week at at 52-week low?
thanks for the clarification.
it’ll be interesting to see how this plays out.
as for which companies didn’t close at/near a 52 week low: campbell’s soup (cpb)- presumably because we’ll all be lining up for ours, and clorox (CLX) this is a little tougher to call, but the thinking is they’ll be selling a lot to (re)whiten folks’ shorts after they open their 3rd qtr brokerage statements.
I’m very curious–does Bright House compensate WRTV (or for that manner any of the other local stations) or is WISH unique in this regard?
I can’t get into the specifics of our retransmission agreements because of confidentiality clauses. But, LIN’s stand in this and earlier negotiations with Charter, Comcast and Cable One have been protracted and principled on the receipt of cash compensation for resale of their content.
Thanks for a thoughtful take on the situation.
Though a few years ago I quit cable and just get my TV off the air. One thing I learned in 10+ years of being a cable customer is that they WILL pass costs on to the customer because, frankly, they CAN.
This may change with increased competition. I sure hope so.
Thank you for admitting your bias, because it is obvious. The greed that WISHTV is showing is not winning them any viewers, because I will stop watching WISHTV now, as a sign of protest that probably doesn’t matter to anyone but myself. My husband and son are angry about the football games and I don’t blame them. If and when WISHTV comes back to Brighthouse, they will watch the games and probably CSI. I, on the other hand, had switched to WISHTV for superior weather reporting, both on their normal channel and their weather channel. They obviously couldn’t care less if we have a major storm, however, because they not only took away their broadcasting for channel 3 (8), but also took away their 24/7 weather channel! Therefore, I will not watch WISHTV for normal, everday shows for which I would have chosen them.
The truth is that WISHTV has its stranglehold on the Colts games, and it wants to be paid for something that Brighthouse customers can get for FREE with an antenna. Brighthouse is notoriously cheap, and they don’t want to set a precedent for paying companies for something they should get for free, in return for giving them a good channel (in the must-carry clause, by which cable companies must abide).
So, I’m going to start writing letters to advertisers of WISHTV, and I hope you will all do the same. Imagine how upset THEY must be, after paying in advance for advertising for the Colts games, then watching as all Brighthouse customers are knocked off the viewing numbers! How can WISHTV justify this, without giving them a refund?? WISHTV, your stupidity and greed is showing!
I, for one, will not switch from cable, as WISHTV has suggested, in their, “Let them eat cake” sort of suggestion. I can afford it, but I’m sure others cannot afford the high cost of basic satellite, versus the cost of basic cable. I have the whole cable package, but NEWS FLASH for WISHTV–I can’t get DSL where I live, even though I live in a suburb of Indy. So, I have to use cable for my Internet, and I am not going to cancel my cable television/Internet package just to make WISHTV happy, and probably give them a larger kickback from DISHTV. I guess you didn’t think of the cable Internet subscribers, WISHTV. Shame on you.
“Let them eat cake” sort of suggestion. I can afford it, but I’m sure others cannot afford the high cost of basic satellite”
Actually, it’s about the same I think, in fact Satellite may be even cheaper in some cases. Only difference is if you don’t pass a required credit check you have to buy the equipment for which they will credit your account each month for a certain amount of time.
“Therefore, I will not watch WISHTV for normal, everday shows for which I would have chosen them.”
You know you probably could have just bought a small cheap set of rabbit ears and your problem would have been solved.
“How can WISHTV justify this, without giving them a refund??”
I don’t think it was established that they weren’t, or weren’t working out some sort of deal with the advertisers right now for rebates or discounts on future ad space. Even Don alludes, in his opinion of course, that there may not exactly be a backlash by the advertisers. Of course, as with Don, and especially not being part of the TV business, I couldn’t say that this is happening for sure as it’s just speculation.
With high gas prices, financial crisis and a 700 billion buyout, Here is WISHTV seeking to take more money from subscribers and companies who are already struggling. I am a brighthouse customer and will not change to something else. Because to change to DISH or AT&T it will cost me something and frankly I don’t have the money to spend like most Hoosiers!! Thanks WISHTV for kicking us Americans while we are already down!!
Who’s faithful to any local TV station anymore? I gave that up in the early ’80s. The only thing that differentiates one local station from another today is their news programming. Otherwise, they’re just a conduit for delivering syndicated and network programming.
So I say that boycotting WISH because of their maneuvering is just cutting off your nose to spite your face. “I’m going to quit watching because I think they’re greedy!” WISH won’t notice or care — unless you have a Nielsen box on your TV.