October 7, 2008
Time Warner Vs. LIN — It’s Time for a Compromise
By Alan Pergament
Who is the good guy and who is the bad guy in the dispute between Time Warner Cable and LIN TV, the owner of Channel 4 and Channel 23?
Like Sarah Palin, I can spot the bad guys. In this case, it appears there only are only bad guys.
But don't blame anyone in Western New York -- this is an issue being decided by the national offices of Time Warner and LIN, and it's a lose-lose situation for the two companies playing the blame game.
That said, the issue became somewhat clearer Saturday after I headed to a local cable office to pick up a rabbit-ears antenna and the diagram that explained how to use it.
As any of my family members can tell you, I'm a technology idiot. My brother-in-law usually has to come over to fix a cable or DVD issue, which usually means he moves a plug.
But this time, I placed the male plug from the antenna into the female spot marked "antenna" on my HDTV set, moved the "source" button on my TV remote to "air" and, voila, Channel 4 and all the local stations came in crystal clear. Channel 4's HD picture actually looked sharper off the antenna than it does on cable.
If it's that easy, it's no wonder Time Warner doesn't want to pay for transmitting Channel 4, or any local channel, especially since it will become even easier in February with the national switch to digital signals.
However, there still are some downsides to the inside antenna. Not all homes in Western New York will get a clear picture. Additionally, subscribers would need an antenna on every one of their sets. And you can't use your cable DVR on the local channels - - which carry the most popular programs -- if you get them over the air.
The inconvenient truth is that TWC's rabbit-ears solution takes away a few things that cable subscribers have taken for granted. Because of that, one imagines there will be cable subscribers who will opt to drop cable for satellite or Verizon's new FiOS service, which have deals to carry the local channels. In the short run, changing carriers is a little inconvenient. But in the long run, it will be more convenient.
The accumulation of issues surrounding Time Warner -- including its rate hikes and its dropping of the NFL Network last year -- may make this the last straw for enough cable subscribers to head to alternate services to badly hurt the company's bottom line.
It almost certainly is an issue in the other LIN markets serviced by Time Warner. Green Bay Packer fans weren't any happier than Buffalo Bills fans Sunday when their game wasn't carried on cable when the Fox affiliate owned by LIN dropped off TWC's system there.
Pleasing customers and making life more convenient for them should count for something, However, the dispute probably has more potential damage to local LIN TV stations like Channel 4 than it does to Time Warner.
The longer the dispute goes the more damage it will do to Channel 4 News, the No. 1-rated newscast in town for years. Without cable, the station is only entering about 50 percent of the market and it is probably losing half of its advertising revenue. The other 50 percent of the market undoubtedly is sampling Channel 2 News and 7 News.
On Sunday, the Bills loss in Arizona had a 20.4 rating on WIVB- TV, about half of what it would have gotten if cable had carried it (people watching in bars or groups at a friend's house are not counted). On Friday, Channel 4's normally top-rated news was uncharacteristically a weak third at 6 p.m. and 11 p.m., with ratings that didn't even hit a 5.
Even before this battle, Channel 2 was creeping up on Channel 4 for news supremacy. Channel 7 is deep in third place, but at least it will get sampled more because it is now one of two options for half of the WNY audience.
Additionally, Channel 4 News is harming its journalistic reputation by the one-sided way it has covered this story. It hasn't told Time Warner's side. That's fine when you're taking out a full- page ad in the newspaper with the headline "Time Warner Cable Has Let You Down." It isn't fine when it is presented within a newscast.
Channel 4 is blaming Time Warner for taking the stations off the air, when its owner, LIN, actually made the call that forced Time Warner to take them off. The advertisement is about as accurate as most presidential political ads -- there are half-truths in it.
"Time Warner already charges you for WIVB and CW's 23's signals in your monthly bill," the ad proclaims, adding "we feel you should demand that Time Warner Cable lower your monthly bill since you are now unable to watch (Channel 4 and Channel 23 programming)."
Time Warner spokeswoman Robin Wolfgang said that subscribers pay for a service, not a specific channel in the basic tier, where Channels 4 and 23 are located.
"The truth is that we take Channel 4's signal and we amplify it, clarify it, and send it much further than over the air signals go," she wrote in an e-mail. "Furthermore, it exposes more people to Channel 4's programming and advertisements, boosting their revenue."
The rating for the Bills game supports that contention. Additionally, the phrase in Channel 4's ad that Time Warner subscribers are "unable to watch" is misleading. Many subscribers can watch -- with rabbit ears.
The ad also advises TWC subscribers to switch to DISH (LIN has acknowledged a partnership with the satellite provider) or another provider, adding "and remember, you can always see (the channels) for FREE using a television antenna."
Hmm. That's exactly Time Warner's point.
What is needed here is a compromise.
The January 2007 deal between Time Warner and Sinclair Broadcasting -- which owns WUTV (the local Fox affiliate) and WNYO (the local MyNetworkTV) affiliate -- would seem to be the foundation for an agreement.
According to a Sinclair filing, the group of 58 stations received $44.4 million from retransmission agreements in 2007 from all of its carriers, about a third related to advertising time. Sinclair, which gave numerous extensions, is believed to have received a significant advertising buy from Time Warner, in addition to cash.
Now that the Bills don't play for two weeks, local Time Warner subscribers without an antenna probably will be most upset at the possibility of missing popular CBS programming carried by Channel 4, such as Thursday's return of "CSI."
It's surprising that a deal hasn't been worked out already and would be shocking if one isn't made by Thursday. If it isn't made soon, national LIN executives should realize it might take weeks, months or even years for its Buffalo affiliate to recover.
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Originally published by NEWS TV CRITIC.
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