Will The Fox and Time Warner Cable Spat Rekindle The A La Carte Debate?

Posted by: Tom Lowry on December 31, 2009

As surely as the ball drops in Manhattan’s Times Square, another certainty on New Year’s Eve now seems to be that a tv programmer and a cable distributor will be locked in a public feud over money that almost certainly goes right down to the wire at midnight.

This year’s warring contenders are executives from News Corp.’s Fox Network and those from Time Warner Cable, the country’s second largest cable operator with 14 million customers. Fox is threatening to pull its programming at midnight tonight and leave those subscribers staring at black on their flat screens unless Time Warner Cable agrees to pay Fox a buck a month for every subscriber.

These kinds of disputes are nothing new. Time Warner Cable and Viacom did the same dance last New Year’s Eve before an 11th hour resolution was worked out.

But even if Fox and Time Warner Cable iron out a deal before midnight, the year-end spat may just have greater repercussions this time. The two sides may see negotiating in public as a necessary tactic, but being front and center with consumers, and pandering politicians, could come back to bite them.

Whatever Time Warner Cable agrees to pay Fox will surely be passed on to subscribers in their monthly bills. Consumers are already fed up with escalating cable bills, threatening to drop their service and instead watch free video offerings on the Internet. In this economy, the possibility that cable bills will rise even further can only mean that a campaign to mandate something called the a la carte model will be rekindled. Under this model, subscribers would have the choice of receiving, and paying for, only the channels they want. That may mean you would only get 30 channels instead of 500, but they would be the channels you know you will watch on a regular basis. If the Internet has taught consumers anything, it’s that choice on their own terms is a great thing. If, once the dust settles and Fox gets anywhere near a buck, the battle with Time Warner Cable may serve to push frustrated consumers to the breaking point.

A la carte was a big deal about five years ago when then-Federal Communications Commission Chairman Kevin Martin supported giving consumers this choice. Cable companies and programmers vehemently opposed a la carte, saying it would destroy the economics of their business. By unbundling cable offerings and fragmenting audiences, they argued, advertising rates would plummet and niche programming could not be supported. At the same time, distribution fees would rise even more, they posited.

Congressional hearings were held on the matter, but the a la carte debate faded away after Martin’s FCC reports on subject were called into question. The current FCC Chairman Julius Genachowski, busy with plans to expand broadband access in the country, has said little about his position on a la carte. But with politicians like Sen. John Kerry taking a deep interest in the Fox- Time Warner Cable standoff (he’s threatening to intervene to make Fox stay on the air), can it only be a matter of time before Congress along with consumer groups make a la carte headlines once again?

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Reader Comments

High Point

December 31, 2009 01:19 PM

I would love A La Carte option. I don't need all those channels. BET, MTV, CNN, QVC, Spanish channels plus many more are channels that I have blocked/skipped anyway. I bet that I would only end up with about 30 channels. I know many of these channels would just ago away. But who cares.

Bill MacKay

December 31, 2009 01:20 PM

I would love a la carte: I don't watch sports nor religious programming, and Fox News would have to go. Bring it on!!!

George

December 31, 2009 01:21 PM

A la carte would be great. We only watch 15 channels, yet we pay for two tiers of channels because some fall in one tier and the others fall in the next tier. Leaving me with around a 180+ channels I don't watch

denny

December 31, 2009 01:24 PM

i wanted this kind of programming for years. i hope it will happen one day.
i have no choice at this moment i i will not buy a bundled products.

Zidium

December 31, 2009 01:24 PM

Sci-Fi Channel (during Stargates),
NBC (when Heroes is on),
ABC (flashforward and v),
A&E (Intervention, Hoarders, Criminal Minds, etc.),
FX

Plus the Cinemax HD suite.

That's all I ever use. Can I sign up for a 5 pack?

barclay

December 31, 2009 01:25 PM

Cable has become over priced and it all the same. I am ready to have my computer stream video to my flat screen.

Roger Wirsing

December 31, 2009 01:26 PM

We have too few choices in vendors and get the raw end of any deal as consumers because of the lack of real competition among cable companies.

Paul Monteforte

December 31, 2009 01:28 PM

Who is really to blame for this debacle? For what we the consumer is already paying and you people can't agree, on what.....$$$$$. You are going to have a revolt on your hands.....with your subscribers being the losers.....

Get your heads out of your asses and do the right thing by us....the people who pay your salaries -- your bread and butter.


BoloMKXXVIII

December 31, 2009 01:30 PM

Your definition of a la carte is flawed. Instead of choosing channels individually, consumers should be able to choose individual shows. Cut out the networks and the cable companies and allow the consumers to purchase only the shows they want directly. Content providers and consumers would benefit. Only the middle men would be hurt. I doubt many would weep for them as they have been bilking the consumers for billions for years.

MO

December 31, 2009 01:30 PM

Time Warner needs to dump Fox, they can and will be easily replaced.

james

December 31, 2009 01:30 PM

let fox pull plug. We can do without the RNC idea of news.

M. Sobotka

December 31, 2009 01:31 PM

If Fox wins this one all of our cable bills will go thru the roof as the other networks insist on similar increases. I never thought I would say this, but I support time Warner Cable totally on this issue.

Bob Geuder

December 31, 2009 01:31 PM

Television is no different than retail. We have too many channels with many of them showing old programs over and over and over because there are a finite number of new ideas or shows the programmers can come up with. Sports are almost as bad. How many games can one person watch in a week?

Donkey Kong

December 31, 2009 01:32 PM

I finally had enough of $90 bills for basic satellite/DVR service for channels I never watch. Dropped down to the el cheapo plan, added netflix, and have no regrets. I even started watching live sports on ESPN 360... for free.

Ryan

December 31, 2009 01:37 PM

My household does not subscribe to cable for exactly this reason. I don't need a $65 to $115 monthly bill so that I can have 494 channels I don't watch.

Jeff Bezo

December 31, 2009 01:38 PM

A la carte is how the folks across the pond get their tv.. Don't expect it to come to the US though. We in the media control you and what you watch and there isn't a thing you can do about it. So shutup and go watch what I tell you.

Graham Barton

December 31, 2009 01:39 PM

An open letter to both parties to this dispute:
Get real, grow up and do what is right. You are both wrong.
Let's start with Fox programming - 90% garbage. You are far too proud of your "product". If you think that it is worth money, you are mistaken. There are a few bright lights in a dark pit of dross. You get fair payment for those from your advertisers. I am forced to watch Fox for NFL action rather than doing so voluntarily. Other networks (NBC, ESPN) provide far superior coverage, but are limited by old contracts. When it comes to the additional cable channels you list that I might "lose", understand that I don't watch them anyway, something you probably don't want the advertisers on those channels to know...
Now, on to Time Warner.
TWC has been my provider of choice for some time, but it has been progressively getting more expensive for no apparent improvement in content. We have included the associated HBO network from time to time, but the highly repetitive and low quality content has easily and more cheaply been replaced by Netflix.
Far too many of the channels that we are forced to pay for involuntarily are just not required. I'm particularly disappointed by the failure to offer a-la-carte pricing, so that I don't have to include channels that I don't watch. This would be a particularly effective way for me to control the cost of my cable. It is long overdue and still awaited.
It is almost inevitable, that if TWC doesn't find ways to reduce my bill, rather than just maintain the cost, I will migrate to another provider sooner or later.
To conclude, neither one of you is in a place where you are able to grandstand on the basis that you occupy the high ground.
If a compromise is not reached and I end up paying for programming I am not receiving, I will terminate my arrangements with TWC and seek another service provider. And of course, as DirecTV is associated with Fox, it is automatically excluded from the competition to provide service.
Time to wise up folks.

Jason

December 31, 2009 01:42 PM

I currently only watch TV/Movies (except live sports)via the internet. Hulu or directly from the networks website. I had to drop TWC. They are just terrible. They had a monopoly on most of the apartment communities in my area so their service was awlful. They just didn't care. So I got rid of them.

Kristina

December 31, 2009 01:44 PM

People claime they would love la carte because they falsly believe this will proprortionately lower their bill. However, it will more likely mean paying about the same amount but receiving less-- and special niche channels would likely disappear. Currently the programing costs are spread across the board, with la carte the cost will go up for these channels because of fewer subscribers. Do you really think you would only pay a few dollars for each channel? The programmers and cable company will still get their money-- consumers will just have less options.

brian

December 31, 2009 01:46 PM

i wouldn't like this because I watch a little of each channel. Could we just select the Channels we dont watch and keep the other one's if we have more than 30

Alexal

December 31, 2009 01:46 PM

I always skip Fox News. They are so far from fair and balance so I can't listen their unilateral coverage and comments at all.

Bonnie

December 31, 2009 01:49 PM

I'll bet a la cart would end up costing the subscriber a lot more in the long run. Plus how would you know if a channel is any good unless you had a chance to check it out because it's there? I hope it never happens.

Eugene

December 31, 2009 01:52 PM

The previous posters have expressed my feelings in that I don't watch the shopping channels, religious channels, or most of the others that exist only because cable providers want to up the number of channels because the more there are the more they feel they can charge. Bring on A la carte so each of these hanger ons will have to stand on their own merit. If they want my viewership then earn it by having something I want to see. I have always went through and blocked out BET and Spanish channels I never watch but now they have taken that away by forcing me to use a clicker that doesn't support that so they can sell me pay per view which I'll never watch either.

SineSwiper

December 31, 2009 01:53 PM

A la carte may seem like a good idea, but ultimately it would cause niche channels to all but disappear. Already you have channels like G4 (RIP TechTV) and "SyFy" turning into Spike-like formats, and it would make the problem worse. If people aren't channel surfing to find new programs, they would never find those shows. If they never find them, nobody watches them and the channel gets canned.

Besides, I would prefer to have more channels for my buck, instead of paying lots of money for just 30 channels. Give me those 500 channels, even if I don't watch them all the time, since the alternative is only giving me 30 channels that I choose for the same price.

Darr247

December 31, 2009 01:53 PM

ala carte is the way to go... let the tinfoil hat wearing ditto heads pay for murderoch's jets and mansions. I watch the NFL on any network EXCEPT fox... and every time ABC gets an interesting show they cancel/change it (like Dennis Miller on MNF, then moving it to cable-only), so I will never pay for their (nor ESPN's) content, either. If the content is not commercial-free, they should have to pay the cable companies to distribute their commercials. Say, $1/month/customer.

john

December 31, 2009 01:54 PM

Wouldn't the bills only increase around 50 cents to 75 cents for fox news, let's say they receive a 50 cents concession, that's a 25 cents increase. So if you have 100 channels, let's say all the programmers demand a similar increase and get it, that's what an extra 25 dollars a month? Only for Time Warner, perhaps their in a weaker position to capitulate or perhaps if other cable company follow suit they won't raise prices nearly as high or absorb the costs to gain a competitive advantage. I think a savvy cable company or a startup will come along and offer a la carte. I think the internet will if it hasn't already start to erode the cable companie's market share and revenue and this allow customers a similar freedom while enjoying it on their fancy HDTV and already purchased entertainment sets without the negative aspects of internet tv.

Pat in Raleigh

December 31, 2009 01:54 PM

As a senior citizen on a fixed income, I cannot afford, and deeply resent being forced, to pay for programming I do not watch. I watch NONE of the Fox programming that would be dropped if the contract with Time Warner was not renewed. I completely support the concept of a la carte cable TV. I really only watch CNN News, Channel 14 Local News, and the History, Animal, Nat'l Geo, and HGTV channels. Why in hell should I have to pay for the rest of the garbage carried on Time Warner? We need an a la carte option!

Dje Orlando

December 31, 2009 01:55 PM

I think that Fox should be paid for their programming just as much as any other network. It is Time-Warner I blame! I'm on DirecTV and I would drop the cable company in a second. If everyone who has cable would drop them you will see them come around.

sylvia mastandrea

December 31, 2009 02:02 PM

I would like the a-la- carte option. Thirty channels would just be fine.

I live in New York City and the monopoly
Time Warner Cable has little or no customer service.

I'm already thinking of cutting everything but basic cable, keeping only one cable box to cut my bill.
It's $126. per month with internet.
Too much money to pay for clear reception.

George Douramanis

December 31, 2009 02:03 PM

Its unfortunate that either way this thing goes its going to end up being passed on to the consumer. Its all about having a reason to charge more.

New York Business Insurance

you wusses

December 31, 2009 02:14 PM

You will take what they give you just like with our government. We are a nation of wimps. There are no Democrats, Republicans or Americans...... just wimps.

Larry

December 31, 2009 02:18 PM

I can't believe the staggering amount of input re these comments that put down FOX. Everyone - I mean everyone I know - ONLY watches FOX.. I believe these inputs as shown are carefully selected by a controlling group that are extreme socialists.. Truth be told, the only credible info in the news media is without a doubt,, FOX!!! To think otherwise is clearly stupidity...

laughing

December 31, 2009 02:22 PM

No one should be forced to pay for Rupert Murdoch's extremist, anti American propaganda.

Janine

December 31, 2009 02:23 PM

I've been saying this for years--we should be able to request, and only pay for, what we want. We have had so many dumb, boring channels thrust upon us.

And does anybody besides me remember the reason they first told us we needed to pay for cable? Because they had no advertising. They were not making money off advertisers, so we had to pay for this "commercial-free" thing called cable.

Where did that concept go?

Dudecicle

December 31, 2009 02:29 PM

Screw Fox. The world would be a better place without them anyway. Besides, does Fox really want to loose that market share. That's a lot of brains that they could be washing!

Has anyone pointed out that Time Warner owns CNN?

Jimbo

December 31, 2009 02:35 PM

You libs are too dumb to know what FOX channels they are talking about!

Harry

December 31, 2009 02:36 PM

I'd like 'a la carte'. But let the free market work however it wants to. Change = opportunity = profits. Like the newspapers, networks may have to re-think. In fact, 'cable' may be outdated. Ask any teenager with an iPod, iPhone or whatever.

sarah

December 31, 2009 02:38 PM

Who cares about Fox. They cancel all the good shows themselves. We don't need to blame time warner for Fox going out. I dont want to pay extra for channels that suck anyway. although if you take it away I better see a reduction in my cable bill.

stupidity

December 31, 2009 02:40 PM

larry - you obviously only watch fox and live in there little world. and everyone - i mean everyone you know, should seek out better programming

jimbo

December 31, 2009 02:40 PM

I find it too funny that a lot of you are griping about FOX News. You are literally too dumb to get your facts straight before posting on a public site. Fox News Is NOT part of this negotiation it is other stations owned by FOX. Look it up, DA!!

Eliott Smith

December 31, 2009 02:46 PM

Since Time Warner is one of Kerry's top five campaign finance supporters (100's of thousands of dollars in 2004 came from TWC), it looks like Kerry is just trying to enforce TWC's monopoly power that the legislature (Sen. Kerry) gave TWC and protects (in return for campaign donations). As a result of these payments, Kerry (an Article 1 official) is actually saying he is going to influence an executive branch agency (Article 2 Agency) and try to force them into protecting his sugar daddy (TWC) by helping them wield their monopoly power. After all the whole premise here is that this is an issue because viewers can only access the programming through TWC's monopoly conduit. TWC wants to use it's monopoly power to buy programming low and charge cable customers high prices. How else has Comcast come to a position to buy the NBC Universal juggernaut? Kerry’s actions are reprehensible.

wowlfie

December 31, 2009 02:54 PM

Careful what you wish for. A la Carte would be great from a consumer standpoint but businesses could fail and at the least some favorite channels could be axed. And others trimmed. Advertising does pay the bill no if and or buts about it. You simply won't get any programming using public TV like on channel 6 and 12.

I love the idea but know it would result in catastrophic changes to what's offered.

BamaHall

December 31, 2009 02:58 PM

Come on folks, don't just complain about, wish for or hope for........DO SOMETHING! Call, email and/or write your congress representatives and DEMAND the changes we all want. If we all don't keep after our "representatives," they will ignore us (their employers)and continue pleasing the special interests. It's up to us.

Ken

December 31, 2009 03:14 PM

Kristina, Bonnie, and SineSwiper all get it.

The magic candyland of a la carte is an illusion.

Danielle

December 31, 2009 03:24 PM

The whole thing seems ridiculous that Time Warner should have to pay for something that people without cable can watch for Free!

Eric

December 31, 2009 04:15 PM

A joke a read a long time ago in Reader's Digest:

My friend dropped his cable last month. Now there's nothing on but now he saves $50 a month.

JG

December 31, 2009 04:29 PM

ESPN gets north of $3 per subscriber.

Riversider

December 31, 2009 05:09 PM

The different tiers are carefully designed to force subscribers to pay for 250 channels to get all of the 20 or 30 they want. As an example, on Dish I would have to go from 200 channels to 250 just to pick up the National Geographic channel which would cost me $10 additional for that one channel that I would actually watch.

Great marketing concept at the expense of consumers.

jb

December 31, 2009 05:26 PM

Dump Fox, who needs them, and who needs all the ridiculous channels no one can possible all watch? If you got to have American Idol and the NFC go to a bar fer cryinoutloud! Raising already high cable rates in these times is beyond ridiculous. TW should let em go black and watch them come crawling back...I give em 72 hours max....

DB

December 31, 2009 06:00 PM

I had this idea like 20 years ago and everyone laughed

Max

December 31, 2009 07:52 PM

One problem with Liberals, they don't like facts, fact is FoxNews and Fox Business Channel are Not part of the 11 channels in dispute. They have a separate contract for them.

Jonathan

December 31, 2009 08:29 PM

The first channel I would drop is fox news and get rid of those channels that I waste my time skipping through.

Brandon

December 31, 2009 08:36 PM

I will just go buy and HD antenna and get Fox for free the old fashion way. I also wonder if after the NFL's contract with Fox is up would they go back to NBC. That might be a good way to save that network.

ricky

December 31, 2009 09:45 PM

we love speed and fx. fox news is the best news channel . cnn sucks .

Mad Max

December 31, 2009 09:49 PM

So, we wanna see Fox News die it seems? Is that the recurring theme here from you smarmy liberals? Die Fox Die?

That probably explains why Fox rejected the offer for the FCC to intervene in arbitration. You just can't trust the Obama administration...

Kudos to Fox. Capitalism is king, and if they want $1.00 per subscriber, you will pay it, or not watch... It's just that simple, and you socialist wanna-be's who think this will finally kill fox news are dreaming.

My bet is that Fox will stay on, and get paid...

John

December 31, 2009 10:06 PM

If cable providers continue as they are, we'll all head back to the airwaves for our viewing pleasure. Most of the stuff on cable is useless junk, not worth a plug nickel. If ala carte cable simply resulted in increased per channel pricing and no decline in monthly bills, I'll wave good bye to that useless piece of wire.

Neil

January 1, 2010 04:04 AM

Do we really need something else to pay for? I don't want it, but the day is coming when everything just turns off , (not just cable), and we all just be sitting looking at whatever our eyes are focused on at the moment. Just watch. You'll see. This entire government is killing us softly and slowly. If they take over cable next, I am more than willing to use my rabbit ears again, and get what ever I can pick-up....."for free". You can still get free TV in LA with rabbit ears. Wake up America.

Commie Stooge

January 1, 2010 08:20 AM

Having written about ala carte Cable TV previously, the economics of Pro Sports relies on the millions of folks forced to take Sports Channels that they don't wat or need. Acccording to one poll, only 30% of subscribers WANT sports channels.
If people could choose what channels they actually wanted, one leg of the three legged sports financing "stool" would be knocked out; the others being public financing of stadiums; and the fans themselves.

jlo

January 1, 2010 09:57 AM

cable providers will continue to not offer a la carte. As can be seen from these comments, the majority of subscribers would cut out a huge amount of channels, and cable providers would not want a decline in profit... so why would they offer such a service?

Pat in Raleigh

January 1, 2010 11:53 AM

I surfed the cable channels last evening (New Year's Eve) and found virtually nothing but program repeats, endless commercials, and Anderson Smith laughing in nervous embarrassment while Kathie Griffin killed her crude, worthless, loud-mouth career in public and ugly Americans in hideous, giant blue Nivea advertisement hats milled around in a tawdry scene of Times Square looking like it was swimming in air-borne garbage after a bomb explosion. What stellar New Year's programming . . . looked like a harbinger of things to come. So I cut off my worthless Cable-encumbered TV, fired up my PC and surfed for news, music and videos on topics I actually enjoyed viewing. I'm beginning to get what you folks advocating PC-viewing vs. Cable TV are talking about! This is true a la carte entertainment. The solution may just be to cancel my Cable TV contract that's looking more and more like money down the drain, and connect a larger screen to my PC! When I think how much money I could save and how much more enjoyable entertainment could be, I find this more than tempting.

Chris

January 1, 2010 12:34 PM

I actually don't favor an a la carte option. Your 30 channels are probably not the 30 channels I would like to watch. Therefore, the current system lets both your channels and my channels stay on the air.

I do disagree with cable companies raising their prices any more to pay for Fox and other's demands. And, with revenue from advertising declining, I do think its reasonable to have Fox expect $1/month/subscriber to pay for the multitude of networks. And, in the spirit of full candor, this deal actually doesn't include the conservative & inhumane networks known as FoxNews & Fox Business Network.

The Shield, Its Always Sunny In Philadelphia, & House are just a few of the shows that this $1 would go toward. Rupert Murdoch is a scum-bag but he's a business man and there's money to be made on apolitical shows just like there is on espousing extremist conservative views via FoxNews.

Davyd

January 1, 2010 07:53 PM

There is way to may channels any way with out the programming to support them. Who needs 60 channels of reality programming? Bruce Jenner and the Kardishans as well as Jon and Kate can all go real jobs! The dumbest crap ever to be put on television.

Paul from NC

January 2, 2010 04:53 PM

JLO

The cable companies will never voluntarily offer an a la carte option. The only way it will happen is if the FCC gets behind it and congress passes a law requiring it. Of course that won't happen since the cable companies and content providers buy them off just like the health insurance and big banks are buying them them off and screwing us.

mathew

January 4, 2010 12:56 AM

Very nice.......I'm sure it will help many people.....

online marketing

Ben E.

January 5, 2010 11:32 PM

The recently announced Comcast / NBC Universal transaction says it all, yet is surprisingly absent in the context of the Time Warner vs. Fox debate. Cable TV Networks have become a very lucrative business model where you can pile on an hour's worth of commercials on a 90 min movie that costs next to nothing to air -- and still get paid per subscriber (think USA Network, A&E, History Channel, Bravo, American Movie Classics, etc.) Why would anybody want to pay for this? The answer is NOBODY, and the cable operators know it. That is why we are forced to pay for this garbage, and the real reason why a la carte offers will be resisted by these same operators who now want to own the same networks.

Brooke Sill

January 11, 2010 05:47 PM

@JLO The providers and networks won't take the initiative to go a la carte. Instead it is becoming a consumer led movement!

Bundling made sense... 20 years ago when we had a few channels. Now, cable bills are over $100 and technology makes customization seamless. Why should every other company being working day and night to cut costs, while Big Cable force feeds us more programming? And the cost just keeps going up!

Join the movement at http://tvalacarte.org/

And take the poll to see avg cost per channel... and get a sense of what you are really subsidizing others.

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The media, entertainment and marketing worlds continue to shapeshift on a near-daily basis, as new forms arise and old assumptions erode. Where is it all going? No one really knows. But on this blog BusinessWeek’s media writers Tom Lowry and Ron Grover promise to provide ample helpings of scoop, provocation, and sharp analysis as they track and annotate this constantly changing terrain.

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