"The News Corporation is threatening to remove its Fox stations from Time Warner Cable systems at the end of this week if the cable company does not agree to pay sizable subscriber fees, the same way it does for cable channels. In negotiations, the News Corporation is pushing for about $1 a month for each subscriber, potentially setting a precedent for broadcasters that are seeking a new revenue stream to offset advertising declines."
Now I like Murdoch and I also was a Group President at Warner Cable almost thirty years ago so I have a set of divided loyalties in this fight. Yet as a consumer I think it is stupid.
Let's see. We have Cablevision and the fighting Dolans getting an arm and a leg for the MSG network already. You see I never ever watch sports. I went to one baseball game in my life, it was with the Brooklyn Dodgers and yes in Brooklyn. Never again. Never saw a football game, saw two or three basketball games. You see in my world sports is getting exercise, climbing mountains, cycling, swimming in heavy surf, and the like, not sitting with a stuffed tummy and a beer, I don't drink the stuff.
So why should I pay for MSG. I can even give up FOX in New York and see Family Guy reruns on the dozens of other channels. House has gotten dull, he should be sent to a good institution, and I have never seen the other reality shows. So why should I pay for FOX if I never watch it. If the CATV company was charged $1 for every channel times all its subs then I may be paying for one channel at a time by at the rate in excess of $1,000 per month, most going to the content providers! Insane.
You see, it is these tipping points, I really hate to use such a well worn phrase, but it does apply here, the tipping point is reached. Stop cable, keep broadband, and then use only Internet content which is free! Disintermediate the FOX and MSG owners. There is a point that Mr. Murdoch must come to understand when the customer just says no more and goes elsewhere.
You see just a few weeks ago in the same NY Times, they had shown everyone how to disintermediate cable content. The author states:
"Although the initial investment was costly, totaling $550, it took only a few months to recoup the money. Back in the olden days of cable we were forced to shell out a relatively standard $140 a month, for television service alone. This cost gave us access to a digital video recorder and hundreds of unwatched TV channels.
Contrast this with today, where our only expense is $9 a month to stream Netflix videos from the Web and the $30 a month that we always spent on an Internet connection. O.K., maybe that’s not completely accurate. When the wireless keyboard died a few weeks ago I was forced to spend another $4 for two new AA batteries. We’ve not yet recovered from that financial loss.
We still come home from work and watch any number of shows, just like the people who continue to pay for cable. We just do it a little differently, starting the computer and then using services like Hulu, Boxee, iTunes and Joost. Another interesting twist to this experience is that we’re no longer limited to consuming traditional programming. With these applications we can spend an entire evening flicking through videos from YouTube, CollegeHumor or Web-only programs."
The old business model for broadcast TV was give it away and make money by advertising. The new one is charge everyone whether or not the look at it and again charge for advertising. Somewhere in this new model is a class action lawsuit!
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