In Demand and representatives of small cable systems last week said they worked out a deal to reduce a minimum fee that threatened to knock pay-per-view out of much of the small-cable universe.
Instead of a $500 per-company minimum monthly fee, regardless of PPV buys, In Demand agreed to cut the fee to $250 if two conditions are met. They are: Operators must file activity reports electronically, using an In Demand-developed spreadsheet; and they must pay fees in a timely fashion, the American Cable Association said last Monday.
Negotiating for the operators were the ACA, a lobby group for small operators, and the National Cable Television Cooperative, which acts as a buying consortium for such companies.
The ACA said it was pleased with the compromise. In Demand spokesman Joe Boyle said the plan "benefits both parties." The PPV and video-on-demand content aggreator didn't want to cut off small operators, but had to look closely at the costs of providing the service, Boyle said.
The ACA said In Demand "also expressed an interest in getting all affiliates under current contracts. Apparently, some contracts are out-of-date or have not been signed."
In Demand pushed back the effective date for the minimum to June 1, meaning small operators' first payment under the plan would not be due until July 31 or other dates specified in individual contracts, according to the ACA.
The agreement would help about 150 companies that had considered dropping PPV services, ACA attorney Chris Cinnamon said.
Want billing solution
Unlike some programming entities whose rate increases have put pressure on small cable operators' profit margins, In Demand "listened and worked with us," Cinnamon said.
"The result, though not an entire elimination of the minimum, will hopefully provide significant relief to many of our members while we continue to work toward a permanent solution," ACA president Matt Polka added in a prepared statement.
The ACA hopes to work with vendors to create an aggregate billing and invoicing solution that will cut In Demand's costs and eliminate the need for a monthly minimum charge for any ACA member.
Operators seemed relieved by the compromise, while adding that any fee will be difficult for systems with fewer than 1,000 customers.
"It will take care of our problem," said Tyrone Garrett of Semo Communications in Sikeston, Mo.
His company serves 2,000 customers in 15 small communities. The system already has the spreadsheet program in place so it will qualify for the $250 floor.
"I believe it will help a great number of operators," he said.