Cable Programming Blackouts Continue To Rise As Cord-Cutting Continues

from the fueling-the-fire dept

We've for some time written about cable TV programming blackouts stemming from contract disputes over retransmission fees. The way this works is that cable operators pay broadcasters of television channels fees to retransmit those broadcasts to customers. When those contracts come to term, broadcasters often demand rate-hikes, which the cable operator resists. In the event no agreement is reached, one side or the other blacks out the channel, pissing off fans of that channel. That anger is then leveraged by both sides to negotiate better terms. Pay TV customers, meanwhile, never see any kind of refund for the missing channel.

In the pantheon of reasons that cord-cutting continues to be a trend, blackouts may not rank as the highest of reasons, but it might be one of the easiest to understand, irritating examples of how the cable TV business simply isn't serving its customers all that well. Blackout instances have been trending upward for years, but as Karl just discussed 2019 is already a record-breaking year for blackouts, and we're only a bit over half way through the year.

Broadcast TV stations are being blacked out on cable and satellite TV systems in record numbers this year, with 230 blackouts so far in 2019. That beats the record of 213 blackouts set in 2017, even though 2019 is just seven months old. The 230 figure represents a huge rise over the eight blackouts seen in 2010 and 42 in 2011, according to a pay-TV industry advocacy group.

Blackouts has mostly been trending up in the past decade, though the number frequently goes down one year before rising again the next. There were 90 blackouts in 2012, 119 in 2013, 94 in 2014, 193 in 2015, 104 in 2016, 213 in 2017, and 165 in 2018.

Both sides are, as per usual, scrambling to blame the other side. What nobody is really speaking to, however, is why consumers should bother putting up with any of this. With tons of options for professional and amateur content on the internet, much of which is on par with anything offered through pay TV channels, and without the entanglements that lead to these blackouts, why should the public stick around to see the end of these blackouts at all?

Many of them aren't, of course. They're cutting cords faster than a new father in the delivery room. Any battle cable providers want to wage against that trend is going to be hampered by these blackout squabbles, as customers see less and less value in the service for which they pay. And it's not as though blackouts are the only thing reducing the value-per-dollar equation for customers.

AT&T and other TV providers have complained for years about rising programming costs in general, not just for broadcast stations. One counter-strategy TV providers have used is to buy large programmers, like AT&T did with Time Warner in a deal finalized last year. But that doesn't stop the AT&T-owned Time Warner from charging high prices for its content, and the industry consolidation hasn't prevented TV users from being charged ever-higher prices.

AT&T claimed that its Time Warner merger would lower prices for consumers, but AT&T has since been raising them instead. AT&T is also starting to pull Time Warner shows off Netflix in order to make them exclusive to an upcoming service it calls HBO Max.

There's a lot in the world about which to be confused, but why the public is cutting the cord in the face of these lies and greed is not one of them.

Filed Under: blackouts, cable programming, cord cutting

2019 Brings Another Wave Of Cable Programming Blackout Feuds Nobody Wants To Address

from the just-cut-the-cord-already dept

We've written for years about how retransmission and carriage fee disputes in the cable industry have grown increasingly common and are only getting worse. The short version: when it comes time to sign a new deal paying for content, broadcasters generally demand huge rate hikes for the same channels. Cable operators then play hardball, and during negotiations one side or the other (usually broadcasters) pulls their content from the cable lineup in a bid to apply the resulting consumer anger against the other guy in negotiations.

According to cable providers, there were 140 such blackouts last year, up from just 8 back in 2010. One of the biggest problems with these feuds: consumers never see refunds, even though they're often left without access to channels they've already paid for, for months. And while regulators from both parties occasionally make some noise about protecting consumers from such tactics, nothing ever actually happens. Generally, these fights are seen by regulators as "boys just being boys," and the consumer impact is routinely ignored.

So as 2019 arrives, so too arrive yet another round of consumers losing access to content they pay for. Millions of Charter (Spectrum) customers in 24 markets this week lost access to local broadcast channels after the cable company couldn't reach an agreement with Tribune Media:

"As many as 24 markets are affected by the TV blackout, including Denver, Houston, New York, Los Angeles and St. Louis. Tribune pulled its signal at 5 p.m. Eastern time after negotiations stalled. The programming outage comes days before sports fans are expected to switch on their cable TV to watch highly anticipated postseason college and professional football games.

The same story is playing out between Verizon (FiOS TV) and Tegna, resulting in Verizon cable TV customers losing access to local broadcast channels just as the NFL playoffs heat up. And while broadcasters often do deserve the blame for the outages for demanding huge and often unreasonable increases, it's fun to watch cable providers (legendary for their own nickel-and-diming) claim they're the ones standing up for consumers:

"The talks stalled because Tegna had demanded a “significant rate increase” for its channels, said Verizon in a statement on its website.

“The rising cost of programming is the single biggest factor in higher TV bills, and we are standing up to broadcasters like Tegna in order to protect you from rate increases,” Verizon said.

Of course it has been made pretty clear that nobody in this dance of dysfunction (including regulators) actually really cares about the impact on consumers. As a result what usually happens is customers get pissed, they're directed by both sides to yell at the other guy, prompting the two sides to strike a confidential new deal. Those costs are then quietly passed on to consumers, and the whole thing repeats itself in a year or two.

The FCC has occasionally pondered rules requiring that the two sides engage in "good faith" negotiations without harming user access to the content they've paid for, but because this is seen as "heavy handed intervention in the markets" in American culture, nothing really gets fixed as we wait, rather uselessly, for "the market" to somehow magically fix itself. But because said market is a coagulation of politically-powerful natural broadband monopolies which avoid genuine price competition (even with the rise of streaming) like the plague, that's not happening anytime soon.

And while consumers can cut the cord and switch to streaming alternatives, we've already seen heavy-handed efforts on the streaming front as well. In its fight with Cablevision in 2010, News Corporation went so far as to get Hulu to block Cablevision broadband customers from accessing all Fox content. Viacom did something similar in 2014 when it blocked all CableONE broadband customers from accessing Viacom content online, even if those broadband users were paying for TV from another provider.

There's ample room for creativity here where broadcasters (increasingly launching their own streaming services) could attempt to ban streaming customers from accessing this as well via IP range blacklists and other absurd, internet-breaking behavior. In the wake of the death of net neutrality and FCC oversight of cable providers, you can expect this particular problem to get notably dumber before we finally, actually decide to impose a simple rule that lets broadcasters bicker and battle all they like over rates, as long as consumers don't lose access to programming they've already paid for.

Filed Under: blackouts, cable programming, isps, negotiations, rate hikes, tv, tv companies