Looks like we’re headed into the second week of no Colts football for Bright House Networks customers.  The dispute over retransmission rights continues with LIN Television, the parent company of WISH-TV, the local CBS Television Network affiliate. So, where channel 8 used to appear you’ll get to see more Big Ten Women’s Volleyball instead.

However, Bright House is offering some relief for its customers while they two giants sort it out.  Customers (I’m one) are getting e-mails with instructions on how to watch CBS programs.  They show how to hook up your computer to your TV to watch CBS programs.

It’s pretty simple if you know about DVI, HDMI, S-Video and the like.  And, really easy if you’re familiar with Windows and the multi-monitor display options and have a TV set with the proper inputs. My guess is that group makes up about less than one half of one percent of cable customers.

And, I’m surmising that small group already knows how to hook up a monitor to a laptop to watch CBS.com, ABC.com, Hulu.com or Netflix.com.  They are generally younger than the WISH-TV audience that tends to skew older.

Hopefully, they’re not trying to instruct the same viewers that call every week, incredulous that Channel 6 had changed over their broadcasts to Spanish and that I was an idiot for not realizing that folks in central Indiana speak English.  Somehow, their audio menu got selected to the Secondary Audio Program (SAP) channel which had a Spanish language translation of the program.  But, their powers of deduction failed them.  And, Bright House wants them to watch CBS online?  Good luck.

Most of the networks are now running prime time programs after they’ve had their initial exposure on their websites so 1) viewers can catch episodes, not miss sequential story lines and will stay with the series 2) viewers may see a show online and start watching it and 3) they can put commercials in those episodes and get more revenue from the repeats.

But, the pain point for a lot of customers centers around watching the Colts and Jaguars battle it out tomorrow at 1PM.  And, you can’t watch that on your computer, even if you are an IT genius.

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.