College Media / General Media / industry news

Viacom/Time Warner battle – just the beginning?

What has only made headlines today is the announcement of Viacom pulling over 18 channels off cable giant Time Warner if a new retransmittal fee is not agreed upon.  Shows like Sponge Bob, Dora the Explorer, Colbert, The Daily Show – basically all Nickelodeon, MTV and Comedy Central shows will no longer be seen by tons of subscribers.

Great, so what does this mean, nothing new right. Certainly not for college newspapers. What you might have missed is why this problem has come up. In a nutshell, decreasing ad revenues is forcing content providers to find other revenue streams. Turning to subscribers is one way to shore up a decline in ad sales.  Cable companies don’t want the increase because they have to pass it along to the subscriber which can cause them to lose customers.

Like an iceberg, this is just the tip. Here in the pacific northwest, satellite provider Dish Network is having a similar battle with Fisher Broadcasting.  Certain local channels have been off air now for two weeks for those Dish Network providers in Washington, Idaho, Oregon, northern Ca and parts of Nevada. Want to watch a playoff game on CBS in Boise? Too bad, KBCI is off air for Dish Network subscribers. Want to watch the BCS bowl games on Fox in northern CA? Will have to go to your local bar for those games if you use Dish.

The Dish/Fisher problem is exactly the same as Viacom/Time Warner. This time, however, we are talking local TV stations needing to shore up revenue from subscribers. Turning to subscribers, though not a major change, is a shift in thinking for broadcast TV.  Local TV stations don’t have deep pockets and Dish could “win” here  and that could spell trouble for other stations when their contracts run up, not only with Dish but also DirecTV and the local cable operator.

So why the big deal?  We all know advertising dollars are tight.  College newspapers have been seen as expensive on a cost per thousand basis. If you check around, not only may your local TV stations be losing viewers you might be surprised to find just how much your local daily is dropping the number of copies printed.  This could be a good time for college media to step up with a more focused alternative in each market.  You will need to make your case and have your local information in hand but there is a perception out there which might swing in college media’s favor.

Last point, keep your eye out for new legislation dealing with retransmission rights (possibly in favor of the cable/satellite provider) and the impact of the transition to digital television.  In 2009 both of these could impact media in general as well as shake up advertisers who only think of television when they think of advertising.

Happy New Year!