Cable One Blasts Turner NetsSays Programmer 'Retaliated' Against Move To Drop Lesser Nets 10/03/2013 1:51 PM Eastern
The dispute between Cable One and Turner Broadcasting kicked up a notch yesterday after the Phoenix-based distributor said the programmer pulled three of its top networks despite the mid-sized MSO having a separate deal to carry the channels.
Cable One’s existing agreement to carry the Turner networks expired on Oct. 1, with the parties not being able to reach a deal.
But in what at the time appeared to be a savvy move, Cable One believed it was able to keep access to three of Turner’s more popular channels – TBS, TNT and Cartoon Network – while dropping lower-rated networks like CNN, CNN International, Turner Classic Movies, Boomerang, HLN and TruTV. That maneuver didn’t last long. Later on Oct.1, Turner de-authorized all of its networks on Cable One systems.
Cable One, owned by The Washington Post Co., has about 600,000 video customers in 19 states.
In a statement, Cable One CEO Tom Might called Turner’s actions a retaliatory move, given the operator had signed an agreement through the National Cable Television Cooperative that allowed it to buy the three channels for about 50% more than paid through its previous deal.
“We signed contracts for TBS, TNT and the Cartoon Network through the National Cable Television Cooperative, which allows for the purchase of individual channels rather than the entire bundle of eight,” Might said in a statement. “In a disgraceful punitive reaction, Turner Networks refused to recognize the NCTC contracts and immediately de-authorized all Cable One systems in order to ‘teach’ Cable One a lesson about the power of cable programmers to tie and bundle channels together and force carriage of unwanted bundles. They refuse to give cable operators or their customers any choice about what they can or cannot buy.”
Turner Broadcasting declined to comment on ongoing carriage negotiations.
“As we previously communicated on Tuesday, Cable One does not have the right to distribute TNT, TBS and Cartoon Network through the NCTC,” the programmer said in a statement.
The NCTC declined to comment, citing confidentiality clauses in network contracts.
Other programmers allow distributors to buy programming individually, but usually at prohibitively high premiums. Programmers have argued that bundling networks is necessary to help fund the cost of producing quality programming across all of its channels.
Cable One’s efforts appear to be part of a broader effort by distributors to rein in high programming costs.
“As we enter the era of declining national Pay TV penetration and rapidly expanding choices of video over the Internet, it is hard to understand the long-term business sanity of many cable programmers' behavior,” Might said in a statement. “Fewer and fewer consumers can afford Pay TV every year and more and more consumers are choosing the convenience of video over the Internet. This kind of programmer behavior will rapidly accelerate this trend as Pay TV providers pass these exorbitant programming costs on to customers with less money and more alternatives.”
Cable One said it will issue customer credits for the loss of TBS, TNT and Cartoon and will replace the other Turner networks over time.
“We hope Turner Networks stops their greedy, bullying antics, respects the contracts we have signed for TBS, TNT and Cartoon, and returns them to viewers soon,” Might added.