Satellite, cable TV battles continue

McClatchy-Tribune

Disputes between television stations and the cable and satellite providers who bring them into viewers’ homes — such as the Dish Network fight that pulled AMC off the air and the one between Viacom and DirecTV — aren’t going to stop any time soon.

But why are these disputes happening?

Rapidly changing technology and consumer habits are introducing new kinks to complicated negotiations, according to James Goss, a senior investment analyst focusing on media and entertainment at Barrington Research out of Chicago.

When multiyear contracts to provide TV programming are signed, guesses must be made about how people will be consuming content years from now.

These days, technology and people’s habits are changing rapidly. A five-year agreement signed three years ago couldn’t have predicted the iPad, for example, so carriage contracts might not have covered who controls the programming on that screen, according to Goss.

“You have to build some flexibility into the contracts,” he said. “Things constantly have to be re-evaluated. It’s probably important that the contracts get renewed every few years, and it’s good they don’t go through at the same time. Gradually everything gets incorporated into these agreements.”

Can a cable or satellite company stream channels to a tablet or phone? Is that streaming allowed when you’re away from home? Can you watch the content in other ways?

Did the service provider pay for exclusive rights to anything? How are the channels packaged into tiers? How do you track how many people watch, and thus the ad rates that can be charged and channels shown on these new devices?

“The dispute might not mean a great monetary value now, but it can have a big monetary value down the road,” Goss said.

Many customers fed up with their provider lament the packaging of channels and dream of “a la carte” freedom, something Goss suggests is a “be careful what you wish for” situation.

If you unbundle the stations, then a much smaller group of people must be willing to pay more for that specific programming. In other words, things could get very expensive.