The same week National Cable & Telecommunications Association chief Michael Powell took the stage in Washington, D.C. at The Cable Show, touting the cable industry’s embrace of competition in the television and broadband markets, the industry’s public relations suffered a black eye after reports surfaced that some distributors were striking carriage deals that locked out over-the-top video providers.
Reports in several publications fed off a blog by BTIG Research media analyst Rich Greenfield, who wrote on June 11 that “one or more” unidentified multichannel video programming distributors had insisted on carriage contract language that would prevent programmers from licensing their content to over-the-top companies like Intel Media or Apple TV. In some instances, according to the Bloomberg report, distributors were willing to pay a premium price, offer other incentives or threaten to drop channels. He questioned whether the federal government should investigate what appears to be an antitrust violation.
Later that day, Time Warner Cable chairman and CEO Glenn Britt said in response to a question from Greenfield during an analyst session at the convention that the cable firm’s contracts may contain similar incentives.
“We actually have roughly 300 different deals for different networks and I hesitate to make any generalizations,” Britt said. “We may well have ones that have that prohibition. We have other ones that probably say, ‘If you go over the top, we get those same rights and all the variations of that you can imagine.’ ” He said those additional rights would include the ability to deliver that programming on a national basis.
The company later said distributors regularly seek out exclusivity in deals. “It is absurd to suggest that, in today’s highly competitive video marketplace, obtaining some level of exclusivity is anticompetitive,” TWC spokeswoman Maureen Huff told The Wire. “Exclusivities and windows are extremely common in the entertainment industry; that’s exactly how entertainment companies compete.”
Reports also outed DirecTV, Dish Network and Cablevision Systems as engaging in blocking behavior. DirecTV declined comment. Dish and Cablevision did not return a request for comment. Comcast’s NBCUniversal, the reports noted, agreed to offer programming to online video distributors on the same terms offered to multichannel video program distributors as a condition of the Comcast-NBCU merger.
Industry sources from both the distributor and programming camps, though, indicated to The Wire it was hard to imagine a network that would agree to such a clause without being paid a huge premium, which they said would be an unlikely scenario.
One source from a large programming firm said its contracts with big distributors such as TWC don’t bar cutting deals with the likes of Intel or other set-top-based program providers.
Big programmers, which often have leverage in carriage negotiations, aren’t likely to freeze out new distribution avenues altogether just to appease current ones.
Clearly, cable companies — some of which still rue the program-access rules that made “cable” programming available to satellite firms and telcos — have reason to be concerned about new competitors coming their way. But pay TV firms also can be hurt by stories that say they’re willing to pay more for already expensive networks in order to lock out new competitors that might offer consumers a lower-priced alternative.
Cable Show & Tell: Commerce Aides On TV Likes, Habits
WASHINGTON — Like the owner of the Hair Club for Men, staffers of the House and Senate Commerce Committees with jurisdiction over cable don’t just oversee the product. They use it.
At a June 10 panel session at The Cable Show, various top aides to legislators on both sides of the aisle were asked (by Time Warner Cable federal affairs VP Cinnamon Rogers) how their video viewing habits have changed with the advent of video everywhere.
Several said their TV viewing had shifted, and timeshifted, to the laptop or mobile devices.
Neil Fried of the House Communications Subcommittee, a father of 19-month-old twins, said that at the end of the day, he picks up an hour of TV over his cable system “that I have shifted — legitimately — to the laptop.”
Roger Sherman of the House Energy & Commerce Committee said that while he still gets The Washington Post and The New York Times, he watches ESPN on his tablet with his morning coffee. Ray Baum, from the House Communications Subcommittee, said he has ESPN and CNN apps and is into video chat with his grandkids.
David Quinalty, of the Senate Commerce Committee, said he no longer reads newspapers. “Almost all my news consumption these days does come online,” he said, whether on a desktop or tablet or smartphone, lately more so on the latter two.
Greg Orlando, from the Senate Commerce Committee, said he also uses on-demand video to time shift.
“Mobile is a big part of my viewing,” David Grossman, senior technology adviser to Rep. Anna Eshoo (D-Calif.), said, whether it’s HBO Go, Hulu, Netflix, Slingbox or the Xfinity app on his iPad. “I use them all,” he said.
Kristin Sharp, from the office of Sen. Mark Pryor (D-Ark.), said the iPad was for on-the-go viewing, while other time-shifted programming was for the end of the day. “I have a 2-year-old and there is a lot of watching videos on the iPhone and watching previously downloaded shows on demand,” she said.
They were also asked for their favorite cable channel and program. Not everyone volunteered an answer. HBO got the most mentions — from three of the eight panelists — with Showtime and NBC Sports Network also getting nods for favorite network. Game of Thrones got multiple mentions, while Mad Men, The Wire and Californication each got a best-show vote, though Californication came with the caveat, from Sherman, that it was perhaps too racy and he had “outgrown it.”
— John Eggerton
