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Cablevision Gets A Tentative Deal With ABC, But Will It Last?
Cablevision, one of the largest providers of cable TV in New York New Jersey, and Connecticut, almost didn't have the Oscars on last night. A disagreement with the Disney corporation left 3.1 million customers without ABC TV for several hours. Whether or not viewers took out quick loans to get digital broadcast TV receivers, it was about 13 minutes into the broadcast when the signal turned back on.
The disagreement between Cablevision and Disney
The disagreement that led to Cablevision customers being without ABC this weekend started over two years ago. Disney Corporation, which owns ABC broadcast television, was asking Cablevision to pay $1 per customer that receives the ABC TV signal. Cablevision currently charges $18 a month for basic broadcast signals - the channels that are broadcast for free over the air. Although Cablevision charges its customers for this service, Disney Corporation has not been paid any of that fee.
Cablevision dilemma reflects Time Warner’s
The financial disagreement between Cablevision and Disney is quite similar to the disagreement News Corp, the owner of FOX TV, and Time Warner Cable had sometime last year. In that disagreement, News Corp was demanding that Time Warner pay a per-customer fee for their broadcast signal. Without any channel service interruption, Time Warner and News Corp eventually came to an agreement.
How cable television works
A fee-for-channel service is the current method cable providers like Cablevision are using. Cable channel providers have contracts with cable TV services. To receive their broadcast, each channel charges the cable service a particular fee. The cable service then packages the channels into the various bundles they offer. On the other hand, premium channels, like HBO and Showtime, charge an individual, higher fee for subscribers. Until recently, the major free broadcast signals - the ones you get for free with an antenna - were provided for free to the cable service.
Where Cablevision got stuck
Recently, with ad revenues dropping, TV channel producers have been trying to find ways to help prop up the ever-expanding cost of producing these "free" channels. To continue receiving their broadcast channel, Disney, which owns ABC, was asking Cablevision to pay a fee per subscriber. Cablevision was refusing, however. Cablevision's argument was that if every broadcast channel required the same sort of deal, it would cost Cablevision subscribers several extra dollars per month. They believe the extra fees would eventually lead to losing subscribers that may later need a loan to cover the extra costs.
The Changing Face of Television
The ongoing drama of the availability of television does not end with Cablevision. Everywhere it seems cable service providers and cable TV companies are digging for ways to modify their fee structures. While broadcast channels can still be obtained for free, it certainly looks like most customers are going to have to end up paying more in the near future, even for a basic cable TV service.
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