WASHINGTON — So much for the macho honchos at CBS. After pledging to focus all its efforts on over-the-air broadcasting, the Eye web blinked in its standoff with the cable industry and confirmed Aug. 26 it’s in talks to form a new cable channel.
Though insisting it’s still pursuing straight cash-for-carriage payments, the CBS decision seems to reflect a reality that Laurence Tisch and Co. were previously unwilling to admit: that King Cable now dictates terms in TV land.
To be sure, CBS’ leverage was diminished when ABC, NBC and Fox began cutting cable deals of their own. And ironically, some cable execs believe CBS may eventually pocket more coin from a cable channel than from its broadcast net.
Nevertheless, cablers still livid over CBS’ brilliant lobbying campaign for retransmission consent last year could barely contain their glee. “Instead of getting a (retrans) check in the mail every month like they expected, CBS is now going to have to go through the stress of the marketplace,” crowed one cable lobbyist. “Plus, there’s no guarantee the channel will succeed.”
CBS refused to divulge the type of program service in the works, but industry sources said the format involves a news/public affairs channel that may make generous use of CBS News archival material. “I’m calling it CBS-Span,” quipped the head of one CBS-affiliated station.
It’s also possible the channel will carry news feeds from CBS affiliates throughout the U.S. CBS intends to provide local ad avails for affils to share in the channel’s revenue. “The network intends to ensure that affiliates will be involved in a meaningful way,” said one industry source.
Just as with the previously announced ABC, NBC and Fox cable deals, cable MSOs that agree to carry the new CBS channel would receive free access to carry CBS’ owned stations.
Comcast Corp., the fourth-largest MSO in the U.S. with 2.56 million subscribers, has tentatively agreed to carry the channel at a price near 12 cents per subscriber per month, says an industry source. The Philadelphia-based firm declined comment, but it’s believed Comcast’s roll-out is contingent uponCBS striking carriage agreements with TeleCommunications Inc. and Time-Warner, the country’s top two cable MSOs.
CBS senior veepee Jay Kriegel reportedly met with Time Warner and TCI execs last week to discuss the new venture. “Obviously, this deal doesn’t get done with only Comcast on board,” said one industry source.
Industry insiders say it’s doubtful the CBS cable channel will have a format similar to Cable News Network, in part because TCI and Time-Warner — which each own a stake in CNN-parent Turner Broadcasting — will use their respective clout to insist the two channels not compete.
(TCI has used a similar strategy in the past: when NBC unveiled plans to launch a 24-hour cable news channel, TCI insisted it be changed to business news before carriage of what is now CNBC was granted.)
Whether the new channel will be viewed as “affiliate-friendly” enough remains to be seen. Ben Tucker, prez of Fresno-based Retlaw Broadcasting, which owns CBS affiliates, said, “A lot of people don’t see the value in a second channel.”
Tucker said the costs of producing and sending local programming to the cable head end might not be worth the trouble. Nevertheless, Tucker said the idea is worth exploring.
Left unclear is the effect the announcement will have on hundreds of TV stations still insisting on straight cash for their signals.
‘Doesn’t change anything’
Gary Chapman, head of LIN Television Corp., whose seven stations include CBS affiliates in Indianapolis and Ft. Wayne, Ind., said the proposed CBS cable channel “doesn’t change anything in regards to our position.” Chapman is demanding payments comparable to what cable systems pony up each month for networks such as CNN.
“We think since we have 10 times the viewership (of most cable nets), we shouldn’t be paid less,” said Chapman, who added he’s busy making plans to drop his stations from cable systems after the FCC’s Oct. 6 deadline for completion of retrans negotiations. “Without cash, on Oct. 7 there will be no World Series for cable customers in Indianapolis,” said Chapman.