Programmers May Worry Over Comcast-Time Warner Cable Pact

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Comcast has long been a formidable entity for TV networks who need its connections to viewers’ homes to keep their ratings sound. Now that sparring partner is about to bulk up.

By proposing to buy Time Warner Cable in an all-stock deal valued at $45.2 billion, Comcast is set to control about a third of the nation’s cable subscribers, making it a daunting gatekeeper to millions of couch potatoes. Comcast has in recent years largely stayed out of the contentious frays that erupt whenever a programmer and a video distributor fail to come to terms – consider last year’s set-to between CBS and Time Warner Cable or a 2010 fracas between Cablevision Corp. and Walt Disney – but it may find itself in more pressing circumstances as it takes control over access to 30 million TV viewers.

“If your content isn’t strong enough, then consolidation in Europe, consolidation around the world can be a challenge,” said David Zaslav, president and chief executive of Discovery Communications during a call with investors Thursday in response to a question about Comcast’s proposed deal.

Large programmers like Discovery, 21st Century Fox and Viacom’s MTV Networks have long used their size to carve out favorable terms in carriage negotiations. But a tightened Comcast grip on the nation’s TV viewers could give the Philadelphia company, which already controls the many networks of NBCUniversal, more power in such talks.

Comcast is “already the nation’s largest ISP, the nation’s largest video provider, and the nation’s largest home phone provider.  It also controls a movie studio, broadcast network, and many popular cable channels,” said John Bergmayer, senior staff attorney with Public Knowledge,  an advoacy group focused on consumer rights. “An enlarged Comcast would be the bully in the schoolyard, able to dictate terms to content creators, Internet companies, other communications networks that must interconnect with it, and distributors who must access its content.”

Large programmers contacted Thursday opted for the most part to keep mum. The bigger outlets may have less cause for concern, because popular networks like Time Warner’s TNT or Fox Cable’s FX carry signature programs or sporting events to which a large part of U.S. viewers crave access. Walt Disney, for instance, has long used favor accorded sports juggernaut ESPN to eke out  terms in such talks. Media companies that operate a broadcast network or own the bulk of their content could also maintain leverage in distribution discussions.

But smaller or stand-alone programmers may have more reason to worry. In the last few years, these companies have had more trouble in negotiations with carriers.

Ovation, an independent arts network, found itself booted off of Time Warner Cable for ten months after the New York cable operator suggested the small outlet did not carry enough original programming (and after its executives suggested the company needed to be mindful of the cost to consumers of delivering channels that were not heavily watched). More recently, The Weather Channel, owned by a consortium that includes NBCUniversal, has had a parting of the ways with DirecTV, which has stated it feels subscribers can get weather information from other sources and have little need for docu-series that have become mainstay on the network. In 2010, both the Hallmark Channel and the Hallmark Movie Channel were booted off of AT&T U-verse over carriage talks.

These smaller companies have less bargaining power with a large distributor – and sometimes even small ones – because they don’t control a passel of networks. And they are less able to push back against demands from distributors they may find unfavorable.

The chief executive of Ovation, in a post on Twitter made after this article was posted, indicated the merger did not, in his view, raise any issues:

Comcast is making the argument to regulators and advocates that the landscape will be just as competitive after a merger with Time Warner Cable as it was before one. Because the subscriber bases of the companies do not overlap, Comcast said, rivals will not face a reduction in the number of competitors in a single market. And the company cited competition from a growing number of entities, including satellite broadcasters like Dish and DirecTV or telecommunications concerns like AT&T U-verse or Verizon FIOS.

What’s more, with companies like Hulu, Apple. Netflix, Google and Amazon entering the video-delivery business,the company said in a statement, “previous antitrust concerns about further cable consolidation are truly antiquated in light of today’s marketplace realities.”

Updated 9:30 AM PT

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  1. RobD says:

    Hmmm…Comcast owns The Weather Channel thru it’s ownership of NBC/Universal. We have little to no choice as it is to who offers what on TV and Comcast WILL be the bully on the block in my opinion. I would like to see numbers from the host of internet programmers that Comcast suspiciously says removes antitrust concerns. I don’t believe they are that powerful. Comcast, on the other hand, can now force DirecTV to put the Weather Channel back on and make DirecTV raise my rates (already tremendously high). Removing the Weather Channel was the best thing that ever happened to weather – no more screaming at the sky every time a cloud appeared. WeatherNation is what they used to be – about the weather.

  2. Stephanie T says:

    Think I will cancel my Comcast cable subscription. Their charges are too damn high.

  3. The Monarch says:

    And yet Comcast and the other MSO’s cry loudly about local TV consolidation, how the competition is unfair despite the massive leverage these guys already have.
    And the FCC makes it clear that sidecar deals are in their sights, while this deal will get “harrumphed” over but ultimately pass muster with a few weak concessions.
    I’d blame the NAB, but it’s really a question of dollars, and broadcasters just don’t have the pockets to buy legislation/regulation like the big cable guys and telcos do.
    Not even considering how much monkey business Comcast can get up to when they will be 30% of the country’s only realistic option for broadband in the absence of any neutrality regs. This is gonna be a windfall for them, and bad for consumers. The actions in the next year will shape the future of the paid Internet for a long time to come.

  4. Thomas Voelker says:

    Monopolies always decreases competition and should be broken up.

  5. BriteBlonde1 says:

    Basically, there’s a problem before it even gets off the ground. Anti-trust.

  6. Jim Ponsoldt says:

    not only programmers but all of us should worry about this mammoth merger in a critical communications market. in general, with very few exceptions, the public does not benefit from increased concentration and reduced competition in any media market. i hope the enforcement agencies put a stop to this. yes, money talks; but it shouldn’t talk this “loudly”.

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