Jan 142009
Original post December 31, 2008
MTV Networks have declared an all out war on Time Warner Cable placing print ads in major markets showing Sponge Bob crying that say, “Why is Sponge Bob Crying?” “Time Warner is taking him off the air tonight along with 19 of your favorite channels.” (Ad Age 12/30/08) The real story is that Viacom, the negotiating partner for the MTV Networks, is pulling them off of Time Warner because they have not been able to reach an agreement on the carriage fee for their channels which consist of only 6 that affect basic cable subscribers: MTV, Comedy Central, Spike, TV Land, Nickelodeon, and VH1. At midnight tonight, those networks will go dark on all Time Warner systems across the country until a deal is agreed upon by both parties.
MTV Networks have declared an all out war on Time Warner Cable placing print ads in major markets showing Sponge Bob crying that say, “Why is Sponge Bob Crying?” “Time Warner is taking him off the air tonight along with 19 of your favorite channels.” (Ad Age 12/30/08) The real story is that Viacom, the negotiating partner for the MTV Networks, is pulling them off of Time Warner because they have not been able to reach an agreement on the carriage fee for their channels which consist of only 6 that affect basic cable subscribers: MTV, Comedy Central, Spike, TV Land, Nickelodeon, and VH1. At midnight tonight, those networks will go dark on all Time Warner systems across the country until a deal is agreed upon by both parties.
Why is this only affecting Time Warner right now? Other distributors have contracts that expire at different times. Right now, Time Warner is the only provider that is in negotiations. MTV wants Time Warner to pay millions more (triple the previous amount) for their content which in a tumultuous economy is a difficult demand that would result in customers paying more on their monthly cable bills and could potentially cause a loss in subscribers. Time Warner is also frustrated with the fact that much of the content provided by these networks is available online for free and the networks do not share any of that revenue with them. I believe that MTV is also posturing on the future growth of cable customers because of the Digital TV Transition on February 17th, 2009 when all traditional analog broadcast signals will no longer be viewable without a digital TV or digital converter box. Cable providers are expected to benefit from this transition as any analog television will still work with a cable subscription.
During the MTV network blackout, Time Warner is preparing to offer customers a credit for the inconvenience and loss of programming while the continue to negotiate earnestly on behalf of their customers.
