Despite a nasty public relations fight and retransmission fees dispute between FOX and Cablevision that resulted in a blocking of FOX shows on the MSO’s network, Cablevision suffered a customer loss of a mere 8,000 or so households during the blackout, or, about 500 per day.
"In other words," Sanford Bernstein cable and satellite analyst Craig Moffett wrote in a 1 November research note, "barely big enough to notice."
The two reached a deal over the weekend, after FOX pulled the plug on 3.1 million Cablevision subscribers in the New York Metro area back on 16 October. Cablevision called FOX’s demands ‘greedy,’ saying the requested fee amounts—estimated to be $150 million per year—were way out of line with other content providers. FOX went so far as to note in communiqués to consumers that might be missing, say, the World Series due to the blackouts that they have other options in pay-TV providers.
Cablevision had asked the FCC to arbitrate the issue, with FOX refusing.
Moffett said the impact to the Cablevision base was limited due to a few factors: one is a lack of competition. Many Cablevision subs are apartment-dwellers who do not have access to Verizon FiOS nor satellite services.
Also, he noted that Verizon’s capacity to turn up new FiOS subscribers is in itself self-limiting: the carrier does about a quarter of its total installs in the Cablevision territory, which translates into 1,000 FiOS TV installs per day in that New York metro area. Moffett said that the company’s stable of trained installers could only handle about 150 percent more installs.
Satellite TV provider DISH Network had been in the same position with FOX, but settled with FOX on 29 October, ahead of the 1 November expiration of its FOX affiliate retrans agreements—and Moffett says it’s this move that likely forced Cablevision’s hand to settle.
"Once Dish had settled with Fox on Friday night, the probability of regulatory intervention dropped dramatically, and Cablevision was out of options," Moffett wrote. "They made that clear in their terse statement Friday night, which all but acknowledged that they had caved in to FOX's demands."
Others agreed as to the chain of events. “Given the tone of [Cablevision’s] press release, it does sound like the company agreed to pay the $150 million a year that FOX was asking,” wrote Wells Fargo Analysts Marci Ryvicker and Timothy Schlock, in a research note. “The two Fox affiliates involved--WNYW-TV, WTXF-TV--are believed to now be receiving retrans fees of 75 cents to $1 a month per subscriber. WWOR-TV, a FOX-owned MyNetwork affiliate, is believed to be getting 20 to 25 cents.”
DISH settled with FOX for a similar amount, the two estimated. Its new carriage agreement covers 18 regional sports networks, two cable channels and 27 local affiliates.
As for regulatory action, the DISH and Cablevision disputes against FOX drew Congress’ notice. Also, FCC Chairman Julius Genachowski has suggested support for mandatory mediation and binding arbitration within retransmission consent rules, and has signed off on a Congressional review of the system.
"I agree with you that recent events raise issues of real concern,” the chairman said in a letter last week to Senate Communications Subcommittee Chairman John Kerry (D-Mass.), before the agreements were reached. “Negotiations between broadcasters and pay television providers have become increasingly fractious, and we are now in the midst of an impasse resulting in a sustained blackout. I share your concern that the current system relegates television viewers to pawns between companies battling over retransmission fees.”
The FCC, he noted, has “very few tools with which to protect consumers' interests in the retransmission consent process…I agree that it is time for Congress to revisit the current retransmission law…”