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BY AVI FRISCH
NEWJERSEYNEWSROOM.COM
With the arrival of 2010, there has been a lot of discussion about cable companies ceasing to carry certain channels in fee disputes with the owners of those networks. Most public was the pre-New Year's attention to the potential loss of Fox and all Fox cable networks on Time Warner Cable systems.
Then suddenly on the holiday itself came the surprise loss of Food Network and HGTV on Cablevision (my mother is particularly upset about HGTV).
For those of you who follow these things as I do (perhaps, like me, you too are a couch potato), disputes such as these have been quite interesting as they have been occurring with increasing frequency in recent years. The reason why they have become common is of course quite simple: everyone involved wants more money.
The system works like this: cable companies collect monthly fees from subscribers for TV service, a fact that most of us already know, and then pay a per subscriber fee to each channel. ESPN is generally the most expensive channel (around $4.10 per subscriber, according to the New York Times). Each channel's income from the provider, however, needs to be negotiated between the company that produces the channel and the cable companies.Fundamentally, these disputes are ultimately about how much money can be wrung out of subscribers. Cable companies pretend to want to protect subscribers from unduly onerous rate increases, but are really only concerned with maintaining their share of the money. Networks in their turn always think they deserve a greater percentage of what cable customers pay.
In these negotiations, customers are not truly represented. If Cablevision or Time Warner drops a channel, they do not cut your rates, no matter how much they may say their fight against the producing channels has to do with keeping rates down. The channels begging us to plead for them against the providers are the ones who have literally pulled the plug on their channels because they want increased revenues.
Whether we are suffering from a strike or a lockout, we suffer. Thus we may be sure no one out there is protecting consumers. "A plague on both their houses" should be the consumer's view as she watches the parties dividing the spoils to be obtained from us.
What can be done? The FCC has thrown around the concept of a la carte programming packages that would allow cable customers to choose any channel without being forced to accept 150 other channels that they as individual customers have no interest in. A system that forced each network to be chosen by individual customers would prevent the constant increase of fees for networks, as those networks had to compete for your business.
In fact, some channels do work this way. Premium channels are sold a la carte, and you can turn them on and off at will. Many people probably cancelled HBO when the Sopranos ended. Maybe some people pocketed the money saved, while others possibly shifted to Showtime for whatever interested them there.
The competitive nature of this marketplace if allowed to function could keep rates from going up, though some networks will respond to significantly smaller subscriber bases by raising fees, some possibly to the HBO/Showtime level.
It is possible that forcing companies to allow you to select each channel in a group of 50 or 100 channels (or some other combination) could work to force networks to compete for viewers. I would love to see a company try this and see what happens.
Another option could be for a set of regulated rates based on ratings. Any network that gets a specified number of viewers should get paid for its ability to attract viewers. Currently, ESPN, bundled with several cable networks and ABC, probably gets fees that are not justified by its ratings (though that is based purely on conjecture). HGTV had very high ratings in comparison with the rates it was being paid. A governmentally imposed system would force cable companies and networks to negotiate solely on the basis of what people watch.
There could be some downside to such a new system, however. Forcing networks to scrounge for ratings would create the same incentives to maximize ratings at the expense of quality that has produced shows like Jersey Shore on MTV. Nonetheless, I for one would be willing to experiment with this approach to see what developed.
A third approach, and one that is already partially happening, is to use the Internet as competition. There are already plenty of people who watch television over the Internet, either on their computer or on some Internet enabled set top box. This is not a true replacement for all of the content offered by cable.
Currently, one cannot simply purchase channels to watch on one's TV over the Internet. If that were to change, say by requiring that all set top boxes be internet enabled, we could move cable television away from the model we currently have to one where the cable company provides a pipe for the transmission of data. Then it would be up to the consumer to pick what she wants to watch.
For those who say this cannot work, think about how we use Google or NewJerseyNewsroom.com. I do not need my cable company to start providing me access to Newjerseynewsroom.com, so why should I need my cable company to provide me access to HGTV. Let HGTV broadcast its signal, for a fee, over the Internet. I could choose to pay it or not and watch it in HD on my TV.
True, video broadcast over the Internet is not yet at the quality level that cable TV generally provides, but I am certain the technology will soon enough be found. It is time to free our TV's from the greedy cable companies and networks.
Free enterprise and democracy for TV!
Avi Frisch is a lawyer in Paramus and Manhattan. He can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or at his website, avifrischlaw.com.
To aaa: "Jersey Shore"?!?!? =Gag!!=