The Wall Street Journal’s Holman W. Jenkins Jr. notes the “war” between Time Warner Cable — which supplies cable TV to Milwaukee, the Fox Cities and Green Bay, among other places — and TV station owners, including Journal Communications, which owns WTMJ-TV in Milwaukee and WGBA-TV in Green Bay:
The two sides are locked in one of those “retransmission” showdowns that Congress ordained in the 1992 Cable Act, when it gave local broadcast stations the option of demanding that cable operators pay them for the same signal the broadcast operators put out free over the public airwaves.
But here we struggle to find the right metaphor. These battles are like Burger King and McDonald’s fiercely battling over a prime corner in Atlantis 15 minutes before the city sinks beneath the waves.
One doesn’t normally look to cable executives to give voice to ontological ironies. But Time Warner’s Glenn Britt did so when he suggested that if CBS wasn’t happy with what Time Warner was willing to pay to carry its channels, CBS could offer those channels directly to consumers on an a la carte basis. …
But in another sense, nothing is stopping CBS right now from cutting out the middleman and selling its programming directly to anybody with a web connection. CBS doesn’t need a retrans agreement. It just needs to put up an app in the app store.
The real question is whether cable’s channel-bundling middleman role will go away quickly or slowly. We already know what business model will replace it for the cable guys—net neutrality turned on its head.
This is especially true for the great revival that we forecast is coming for ad-supported video, though nothing like the ad-supported business models of the Big Three TV networks of yore. …
As video engulfs the Web, the Internet is becoming less a two-way medium and more a one-way. Secondly, in such a world usage-based pricing, in some form, is inevitable. Light users need to be able to pay less than heavy users—or light users won’t be customers at all and won’t contribute anything to covering the network’s overhead. (Don’t buy the guff you read on the Web about how cable operators are imposing metered pricing to “make up” for lost TV profits. Broadband wasn’t previously a charity.) …
The value proposition of broadband is changing as it becomes the main carrier of our entertainment. The same logic that leads to bizarre pricing permutations in the airline business—designed to bring more customers into the air—is a sign of a grownup and more competitive broadband industry.
But something even more interesting is happening. Charlie Ergen of satellite broadcaster Dish Network has been trying to link up with a wireless company to answer the question “How do you put communications inside and outside the home together?”
Verizon Wireless is pursuing research with a consortium of cable companies toward the same end—seamless connectivity in and out of the home.
All of this is the reason Packer fans who are Time Warner subscribers in the eastern half of the state didn’t get to watch last Friday’s Packers–Cardinals preseason game, and won’t get to watch Saturday’s Packers–Rams preseason game either.
For those who are interested in their corporate spin, Time Warner’s is here, and Journal’s is here.
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