The latest battle in the war between content and distribution

Posted: January 5, 2010 in Branding, Business, Marketing, Media
Tags: , , , , , , ,

As the new decade dawned, the war between content creators and distribution channels was heating up on a new front:  Television.

While Fox loudly beat its chest and threatened to pull its programming off Time Warner Cable, at 12:01 am Jan. 1st, without fanfare or warning shot, Scripps Network actually did pull the Food Network and HGTV off of Cablevision.

But unlike what happens when a news organization pulls content from a news aggregator like Google News and there are hundreds, if not thousands, of articles waiting to take its place, when a cable network like Scripps pulls its content from TV, there’s just an empty hole where yummy goodness used to be.

As in any good conflict, there are two sides. Cablevision accuses Scripps of “effectively holding their own viewers hostage in order to pursue a more than 200 percent fee increase…” And Scripps says the fault lies with Cablevision, and that “every other cable and satellite provider in the country has willingly and professionally renegotiated a fair market rate…” (You can read the full text of the statements from both Scripps and  Cablevision here on paidContent.org, which provides global coverage on the economics of digital content.)

In the case of Food Network and Cablevision, the dispute comes down to less than the cost of a candy bar.

Currently, Cablevision pays Scripps about 8 cents per household to run Food Network. They also pay 13 cents for HGTV according to this very informative article in Broadcasting & Cable about the Scripps Cablevision dispute yesterday.

Food Network, a Top 10 cable network, has seen ratings increase 21% in December among the 18-49 year old demographic, and HGTV increased 13% over the same period. Ratings increases like this can be worth millions in extra ad revenues.

In an attempt to reflect the increased value of their programming, Scripps is asking for an “astronomical” increase of over 200%, or about fifty cents. (Cablevision charges $55.95 for basic cable, which includes Food Network, so you can decide for yourself whether Food Network is worth more than 8 cents a month… or even $0.32.)

Apparently, according to Scripps, Cablevision made a much lower offer that was “take-it-or-leave-it, and would still make Food Network… one of the lowest paid channels on its (Cablevision’s) lineup.”

Of course, as these two giant superpowers fight it out, there’s bound to be collateral damage.

First of all, there are the advertisers who are losing coverage. Don’t cry too much for them, though, because  audiences and ratings are guaranteed by contract, or backed up by make goods. Although if you had a time sensitive offer, let’s say a new product launch in the gourmet food category or home appliance category at the start of the year, a future make-good may not be enough to overcome lost opportunity.

No, as is frequently the case with war, it is the cost in civilian casualties that hurts the most. The real victims of this conflict are the 3 million Cablevision homes in the NY tri-state area: innocent men, women and children who are being deprived of Rachel Ray and Alton Brown.

How can we live without knowing who was victorious in the Iron Chef Super Chef Battle featuring special guest Michelle Obama: Mario Battali and Emeril Lagassi or Bobby Flay and White House Chef Cummerford? Did Paula Dean invent some new way to combine butter, sour cream, mayonnaise and bacon and not die of an instant coronary? What cool, out-of-the-way soon-to-be-overwhelmingly popular joint did Guy Fieri find on Diners, Drive-Ins and Dives?

But more importantly, can someone please explain to me how I can make sense of this dispute for my 5-year old daughter, who knows nothing of Gross Rating Points and syndication revenue, when all she wants to do is see Chef Duff and his merry cakesters bake a cake shaped like a kitty cat on Ace of Cakes?

Comments
  1. Josh says:

    Swiper swiped it…

    🙂

  2. A Fan says:

    …or what about matching wits with House Hunters on the home and garden channel? One of my guilty pleasures.

    A.F.

    • jlsimons says:

      I wondered who watched that? I heard the president of HGTV on a commercial on the radio saying that House Hunters (I think it was that one, but I could easily be wrong) would be on PIX, whatever that is. Thanks for the comment, AF.

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