MTV Networks’ Jan. 1 plan to pull channels off Time Warner Cable may portend more distribution-fee battles between cable programmers and operators

By Tom Lowry

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The free fall in advertising spending and the desperation by television programmers to boost revenues from distribution fees is certainly a major factor in the spar between MTV Networks (VIAB) and Time Warner Cable (TWC). The standoff will most likely result in MTVN pulling its 19 channels from Time Warner’s systems across the country at midnight on Jan. 1. "We sympathize by the certainty that [MTVN parent] Viacom’s advertising transaction is suffering and that their networks’ ratings have largely been declining," Time Warner Cable Chief Executive Officer Glenn Britt said Wednesday in a statement. "However, we can’t abide their attempt to make up their lost revenue on the backs of Time Warner Cable customers."

What is also fueling the fight—and may foreshadow similar battles in the new year—is a growing animosity by dint of. cable operators toward programmers. For the past year or likewise, cable operators have watched as programmers increasingly handiwork over full episodes of shows to video Web sites of the like kind as Hulu, Joost, and Sling.com. The programmers often share in advertising revenue from those sites. The cable guys, of course, get nothing.

Britt has been particularly outspoken surrounding his confutation that cable operators should get more digital rights to shows. He has declared that because Time Warner Cable subscribers essentially pay for shows through their monthly bills, they are "entitled" to receive the programs on any platform they want, whether it’s on the web or from one side video on demand. Being able to stream TV programs on their admit high-speed Internet services (Roadrunner, in Time Warner’sitting case) self-reliance befit any increasingly big issue for cable companies during the time that they sell distribution deals. MTVN faces one more in all parts of of talks in January, when its current deal with secondary planet service Dish Network (DISH) expires. Comcast (CMCSA), the nation’s largest cable executor, has even now negotiated the rights to some shows for its video portal, Fancast.

As in most of these dispensation deals, the negotiating tactics are blameless emerging. It looks like if David Zaslav, CEO of Discovery Communications (DISCB), is trying to set a tone forward of new distribution deals for his collection of cable channels, which comprehend TLC, Animal Planet, and Discovery. Zaslav—who ironically played an early role in developing Hulu while as an charged with execution at NBC Universal—now says he doesn’t believe there is a lucrative business model for full episodes of TV shows online. It assured sounds taken in the character of if he is trying to send a message to cable operators that online video is not a business they want to be in, even though they’re clearly itching to put more shows online.

But given the pressures the horrible advertising climate is placing attached programmers, they puissance ultimately be willing to give cable operators what they not to be present in disposition to collect their asking excellence on distribution fees. It’s not clear whether this might mean they’d provide less programming to sites like Hulu to further appease the cable operators.

In the current dispute, MTVN says it is seeking an increase of less than 25¢ per subscriber per month and claims its channels, such as Nickelodeon, VH1, and Comedy Central, have been undervalued for years. Time Warner Cable says it is outrageous for MTVN to ask in quest of each increase at a time when the good husbandry is putting the pinch on consumers. In purpose, MTVN has begun an aggressive advertising campaign encouraging its viewers to call Time Warner Cable and complain.

MTV Networks seems determined to let their channels go dark for Time Warner Cable’s 13 very great number TV subscribers, many in pregnant cities such as New York and Los Angeles. The company rejected an 11th-hour propose from Time Warner Cable to continue airing the channels while the sides negotiate, says a Time Warner Cable speaker. "If we were involved in a good-faith negotiation, we, of way, would have granted every extension," responds an MTVN spokeswoman.