News

Don’t Talk About It

1/23/2010 2:00 AM Eastern

Reading the settlement news from the Scripps Networks Interactive-Cablevision Systems feud, I thought of the infamous line from Fight Club: “The first rule of Fight Club is, you do not talk about Fight Club. The second rule about Fight Club is YOU DO NOT talk about Fight Club.”

Cable operators and cable programmers could learn a few lessons from Brad Pitt.

After three weeks of some of the nastiest public feuding between public companies that consumers have seen in a while, both sides have laid down their swords. The two companies scored a pact that will return HGTV and the Food Network to the New York area MSO’s 3.1 million subscribers, who got their beloved Bobby Flay back.

What did the public airing of their grievances win? Terms were sealed. And neither side commented much beyond the treacle public statements of newfound admiration for one another.

Scripps Networks executives called Cablevision a “valued distribution partner” while executives at the cable operator commented on how pleased they were to have Food Network and HGTV’s “strong and loyal followings” back on the system.

Weren’t these the guys just duking it out over the airwaves, so uncompromising in their positions that they left customers in the dark for three weeks?

While each may privately claim victory, surely neither bested the other by much in the final settlement. The long-term pact most likely includes a creative settlement that goes beyond a straight money-for-carriage deal. (See story on page 3.)

What is certain is this: Cablevision alienated customers and Scripps lost advertising dollars. And more than anything, the cable industry drew unwanted attention to their pricing methods and market power, and reminded viewers that each individual — read: a la carte — channel has a certain value.

Consumer groups have pushed for a breakdown of bundling so consumers can “pay only for channels you want,” but the cable industry has successfully tamped down such efforts.

And for good reason, since the entire financial architecture of cable-network pricing would be threatened. The disparity in pricing today, with ESPN asking more than $4 per subscriber per month, and others asking only pennies, would certainly force some networks to simply vanish for lack of demand. Public fights like this don’t help cable’s cause.

This is where Mr. Pitt comes in. Keep the contract fisticuffs down under the surface, away from the light of day, and for Pete’s sake, don’t make a big public show of it. Why parade this ugly side of negotiations into public viewing? Vent it out in a closed room. And above all, do not talk about it.

If you figure that most all of these public battles are typically settled in days, not months, how big can the chasm really be?

Cablevision had complained that Scripps was seeking to triple its rates, while Scripps countered that it was asking for fair value for growing networks.

If it’s just a reflection of a stubborn war of wills, the weeks of darkness are not worth the public black eye.

November

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