CBS – Time Warner Blackout Update

If you’re a Time Warner Cable customer living in New York, Dallas, Los Angeles, or several other major markets, you probably noticed your channel options for most of this week did not include CBS. The two communications giants have been disputing network fees and the valuation of CBS programming, which has resulted in a blackout of CBS programming in eight different markets. As retaliation, CBS blocked TWC internet users from material. In short, if you’re a TWC customer in one of these markets hoping to catch the PGA championship this weekend, you may be out of luck.

This disagreement underscores the larger issue of the increasingly blurry lines between one media entity and another. The way today’s media landscape is controlled is largely a result of isolated chronological events. First there were broadcast TV stations, which established an advertiser-based revenue model. Simple enough.

Then, cable TV boxes came along, which function on both subscriber revenues and advertising dollars. If your home receives cable, your cable box also provides the over-the-air channels that non-cable homes receive for free (which is how TWC is able to cut off CBS from customers).

Finally, in the Internet age, we have even more subscriber-based options – such as Hulu and Netflix – in addition to streaming options, which can have any of these revenue models. In other words, you could be watching an ABC show on Netflix, through your Time Warner Cable internet connection. If you’re not confused yet, try deciding who you think really owns that transaction and who should be given the biggest piece of the pie.

I’m not sure, but apparently neither are CBS or Time Warner. TWC’s proposed solution earlier this week was to offer CBS as an option to customers “a la carte,” which is an interesting idea but to me would only be fair if all stations were offered that way (CBS promptly rejected the offer).

It’s always frustrating when consumers must suffer as a result of disagreements at the corporate level, and it seems a bit juvenile that both companies appear to be showing the other whose boss by slashing the options consumers are paying for (apparently without a deduction in their bills). I hope for the sake of millions of customers that the issue can be resolved soon. If not, there’s always the other 200 channels…


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