Originally Posted by skylab
As you well know, the local networks have been given a monopoly on the airwaves for free (there are others that would be willing to pay alot of money for those same airways). Why should they get it for free when they make money on the advertising?
This is not correct in several ways. First, there is no "monopoly". I'm not sure where that even came from. Second, broadcasters don't get the airwaves for free, they pay for them.
Well, they give there signal away for free. But they shouldn't have it both ways when it comes to cable retransmission. Its either free or it isn't.
You might want it to be that way, but it isn't. A content owner gets to choose who gets to use their content, and how they get to use it. The owner of a popular song may charge $16 for a CD with a bunch of other songs you don't want. You might also have the option to buy just that song digital download for $0.99. And then again, you might also have the option to listen to it for free on FM radio. Oh... and then you could pay $13 or whatever it is per month for SiriusXM and listen to it on satellite radio. So no it's not "either free or it isn't."
Consumers shouldn't have to pay for it just because they can't get an OTA signal and are forced to subscribe to cable.
Nobody is forced to do anything. We have free will. I can't get ESPN over the air, but that doesn't force me to subscribe to cable. People seem to forget about the choice to do without.
I agree its worth something for TWC to be able to retransmit local OTA signals.
Yes, it's worth quite a bit!
But I don't think TWC is making anything substantial off of this service,
YES THEY ARE! Without the OTA locals on their line-up, their business would suffer greatly.
particularly when it comes to lifeline customers.
Let's try not to get caught up in one-offs, but know that lifeline rates are enough to cover any expense the cable company might have in providing that service to the customer.
Exhibit A is TWC's unwilingness to pay for the ability to retransmit local network affiliates.
They pay for lots of local network affiliates. The dispute isn't over whether they will pay, it's how much they will pay. Not being carried on cable will hurt an affiliate's ratings. It will also hurt the cable company's subscription numbers. There is a value to be determined by the market, and that's what Time Warner needs to pay. All you're seeing here is the market at work.
At the end of the day, however, what its worth to TWC is irrelevant when the content is otherwise given away for free.
NO! It's not irrelevant. It's 100% relevant! What it's worth to TWC is what TWC should be willing to pay!
The price of any good or service is not determined solely by what one party is willing to pay.
Well, in a specific circumstance, it is. If I am going to buy a car, I'm willing to pay x. If dealer offers it for x or less, I will buy the car. If not, I won't. It's that simple, and the same case here. If the TV station offers it for x or less, the cable company will pay for the rights to distribute the channel.
To take your example, sure, some people aren't willing to pay $4/month for ESPN.
The costs I listed are not what consumers pay, they are what cable companies pay. The cable companies charge a lot more than that.
For others, its worth alot more than that (and might be the only reasons they subscribe to "pay tv"). But the customer that is willing to pay $20/month for ESPN pays the same as someone who is willing to pay just $1.00 per month. The key difference here is that ESPN has chosen to charge everyone for its content. The OTA networks have not. They could just as easily move their best programming to "pay tv" networks and make money that way.
So, you're saying that if ESPN decides to offer their programming streaming online for free, that they shouldn't be allowed to charge for it on cable???
Or, if FOX45 decides to turn off their OTA broadcast tower, that then (and only then) they can charge the cable company to carry their content?
I realize I responded to a lot of comments above, but really, the only thing that matters is this: Time Warner needs to pay the station owners what the content is worth. I don't know what that amount is. But, Time Warner needs to decide how much they're willing to pay, and the station owners need to decide how much they're willing to accept. They need to negotiate and come to an agreement. If they can't come to an agreement, then the station will not be carried on cable.