Cablevision CEO James Dolan warned cable content providers that they are in
danger of undoing their own business models if they continue to demand higher
subscription rates.
Cablevision is in the midst of a dispute with Scripps Networks Interactive,
which has pulled Food Network and HGTV from the cable system in the New York region. The
decision is affecting service for 3 million households, though Scripps is
hoping to restore the services once it has worked out a new contract with
Cablevision that reflects the high ratings of its two services. In the meantime
Scripps is broadcasting some shows over the air.
Speaking at the Citi telecom and media investor conference in San Francisco on Jan. 6,
Dolan said: "I worry more for the programming business that they don't make the
same mistakes the music business did and allow a disruptive technology or government
intervention to come in and then undermine the overall economic model."
Dolan pondered that a basic package of programming might cost between $80 to
$100 for basic service, in the next five years, if content providers continue
to demand higher subscription fees. That price is about double the current fee
of a Cablevision basic package. Cable content providers are chasing higher
subscription fees from distributors for two reasons: programming investments
are paying off and attracting higher viewership rates which also benefit
operators and secondly, the advertising market has cratered making it harder
for cable channels to hit revenue goals.
Meanwhile, Scripps reported Wednesday night (Jan. 6), its executives had
held initial talks at Cablevision's New York
headquarters in Bethpage, Long Island. Scripps
said it had made "some progress."
"We reached out to Cablevision and had a constructive meeting in Bethpage today," John Lansing, the executive VP and
president of Scripps Networks, said in a statement. "We made some progress and
we continue to hope that we can move this discussion forward."
