Carriage battles are busting out all over, turning a sleepy post-holiday week into a battleground as Hearst Television yanked its broadcast station signals from Time Warner Cable at midnight on Monday.
TW Cable called the move “unfair to customers and unsustainable for our business.” It said Hearst demanded an “outrageous” 300% fee increase.
“Time Warner is seeking a significant discount of market-based fees that is neither fair nor reasonable,” Hearst TV president David Barrett shot back in a statement issued late Tuesday.
The news was somewhat overshadowed by Viacom’s threat to pull its cable networks, including Comedy Central, MTV Networks and Nickelodeon, off DirecTV’s 20 million subscriber systems on Tuesday night if those two companies can’t reach a new rate agreement.
With programming costs rising, consumers strapped for cash and the media landscape shifting fast, content and distribution companies are testing each other like never before to see where the limits lie.
Hearst owns ABC affiliates in Pittsburgh, Boston, Portland, Maine, and Lincoln, Neb.; NBC affiliates in Cincinnati, Hartford, Vt., Plattsburgh, N.Y., and Winston-Salem, N.C.; a CBS affiliate in Louisville; and an ABC and a CW affiliate in Kansas City, Mo.
“Hearst Television has chosen to black out their signals from our customers rather than continue negotiations, despite their CEO saying just two weeks ago that broadcaster blackouts are unfair to consumers. Time Warner Cable has reached hundreds of agreements with other broadcasters without broadcaster blackouts, but Hearst’s demand for a nearly 300% increase is way out of line,” Time Warner said in a statement. “Despite Hearst’s blackout, we stand ready to continue negotiations and are hopeful that their stations will be returned to our lineups shortly.”
Hearst disputed the notion that it ordered a “blackout,” noting its signal was still available free over the air or on rival multichannel services. Barrett also said its increase request was on par with what many other distributors pay. “Time Warner’s characterization of the percentage increase in carriage fees we are seeking is inaccurate,” he said. “We have sought a reasonable increase consistent with the increased costs we have to pay for our highly valued programming and the carriage fees now paid to us by Time Warner’s competitors.”
The carriage agreement expired at midnight after having been extended for a week for the two sides to negotiate.