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Did Showtime Suffer From CBS Blackout?

Sep 07, 13 Did Showtime Suffer From CBS Blackout?

Can you believe the plot twists on Dexter? Are you starting to find Ray Donavon to be a left coast version of The Sopranos as the lead character has to deal with his family and his other life, and the two keep intertwining? What about Under the Dome, what did you think of that?

How about the US Open? Have you been catching that as well?

If you live in New York City, Los Angeles or Dallas and are a subscriber to Time Warner Cable, chances are you haven’t been getting your fill of Dexter, or a fix of “fixer” Ray Donavon. Chances are instead of watching the exploits of the Hollywood fixer you’ve been facing the problem that the showdown between the corporate giants resulted in a blackout of CBS content – which included CBS-owned Showtime and its properties.

When big companies do battle, the consumer is the one who ends up on the losing end. This is certainly the case with this latest – and far from the first – showdown between content creators and content providers.

It boils down to this. CBS makes the content, and has to fend demands for more money from writers, actors, show runners and everyone involved in producing the shows. In some cases – CBS TV for example – it makes some money from advertising. In other cases – Showtime by contrast – it makes money from subscription fees that it passes on to the cable or satellite companies.

But for the broadcast content it wants “retransmission” fees. In other words, it wants the cable or satellite providers to pay for what it in essence can be gotten for free over the air.

In the early days of cable TV, the broadcast channels practically begged to be carried, as money was coming from advertising and there was a real fear that local channels couldn’t compete with HBO, Showtime and other cable offerings. As more and more cable channels popped up, this fear should have gotten to the point that CBS, as well as NBC and ABC, paid to be carried.

But no, a funny thing happened. People kept watching network TV, even as they watched cable channels. The other thing was that the plethora of cable channels that started out as independently owned or at least owned by companies that weren’t exactly titans of broadcasting, were the owners of channels like A&E, USA and MTV.

Over the past decade companies like Time Warner, Viacom (now CBS) and Universal (now part owned by Comcast) bought up those channels. And with it, content was suddenly more valuable. Hence, the retransmission fees crept in.

This is also the downside to so much content. Think about it; shows like The Walking Dead, Breaking Bad, Hell on Wheels, Sons of Anarchy, It’s Always Sunny in Philadelphia, any of the Real Housewives, Keeping Up with the whoever they are, etc. Those shows don’t air on ABC, NBC, CBS or even Fox. They air on a variety of cable channels.

That’s good news for actors, writings and show runners. But someone has to pay for all this content. The result is that fees are rising.

The question now is whether CBS made the right call in basically shuttering its content to get those added fees. Didn’t a month long blackout hurt Dexter and Ray Donovan?

Perhaps this is why – not surprisingly – that on Labor Day, and in advance of the fall TV season, that common ground was found. Neither side won, yet the consumer lost.

The consumer lost in the short term as he/she missed Dexter or whatever CBS owned stations in NYC, LA and Dallas had to offer. But, consumers will likely lose when the cable bill goes up.

The good news is that we have a lot more to watch on TV, but we do pay a whole lot more to do so!

Image Credit: ra2studio / Shutterstock

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