After its retrans talks with Smith Media collapsed last night, Time Warner Cable was forced to drop Smith's NBC affiliate in Utica, N.Y., and its ABC and Fox affiliates in Burlington, Vt. But rather than go without those signals, TWC substituted affiliates of those same networks from other markets.
RETRANS WARS (UPDATED)
Denied Locals, TWC Importing Distant Signals
Denied retransmission consent by Smith Media for its affiliates in Utica, N.Y., and Burlington, Vt.-Plattsburgh, N.Y., Time Warner Cable on Thursday began importing affiliates of the same networks from other markets.
In Utica, Time Warner replaced Smith’s NBC affiliate WKTV with Nexstar’s WBRE Wilkes Barre-Scranton, Pa.
Meanwhile, in Burlington, it replaced Fox affiliate WFFF with WNYF-CA Watertown, N.Y., and ABC affiliate WVNY with Nexstar-managed WUTR. Smith operates WVNY through a shared services agreement.
The signal shuffle was triggered by the failure of Time Warner and Smith to reach a new retrans deal despite five years of trying. The last extension of the old deal expired last night, according to Kevin Latek, an attorney for Smith.
Terence Rafferty, regional VP of operations for Time Warner, said in a prepared statement the cable operator made the substitutions so its customers would not miss out on their favorite programming.
“It’s unfortunate that Smith decided to take their local stations off our lineup, with little regard for their viewers, advertisers and our customers,” Rafferty said.
BRAND CONNECTIONS
“It’s our responsibility to reach an agreement at a fair price on behalf of our customers, and Smith was simply unwilling to be reasonable during our negotiations.”
Mike Granados, CEO of Smith Media, said that the small station group (it also owns KEYT Santa Barbara, Calif.) has negotiated with Time Warner “in good faith” and that it has long history of doing retrans deals without causing any service interruptions.
“We believe we are asking for fair market value for our content,” he said.
“At the end of the day, Time Warner just continues not to recognize the millions of dollars we’ve invested in the news product for the last 50 years. And it’s somewhat appalling and insulting to the people of Utica and the surrounding area to bring in a Pennsylvania newscast and let them watch news from a market 200 miles away.”
Granados also said that Nexstar told him that it has sent cease-and-desists letters to Time Warner Cable, asserting that it never gave the operator permission to carry its stations outside their markets.
In an e-mail, Nexstar CEO Perry Sook confirmed that those letters went out, but declined to make any comment.
Comments (22)
Manuel Morales says:
December 16, 2010 at 6:15 pm
Nice of Nexstar to do this for the folks in these markets. Stewards of the airwaves.
Gene Johnson says:
December 16, 2010 at 6:48 pm
Is Smith exercising its rights under network and syndicated exclusivity rules? I doubt the Nextar or other stations are significantly viewed in the other markets. Also interesting that Nextar, a strong advocate of retransmission fees, would “allow” its signals to be used in such a way. Something doesn’t sound (read) quite right.
Kathryn Miller says:
December 17, 2010 at 2:35 pm
not bieng significantly viewed mostly effects the copyright rates that the cable system pays. Of course, there are a few tricks, like with the number of days that you pick up the distant signals for free, and the fact that you have to pay for them in bundles of 4. Am I the only person who knows these things?
Manuel Morales says:
December 17, 2010 at 3:24 pm
Sig Viewed status is also very important with regards to an affiliate’s grant of retransmission. Affiliation agreements restrict the grant of retransmission to the DMA only (FOX), DMA, SV and Historically Carried areas (NBC and CBS) and DMA and SV areas (ABC). Thus a FOX station can only grant retrans within its own DMA and so forth. A grant of retrans by a station in Wilks-Barre to the Utica market would likely violate the affiliation agreement.
Greg McAlister says:
December 16, 2010 at 7:13 pm
We did not give permission to TWC to do this and sent them a cease and desist letter this morning.
Takahiro Shibayama says:
December 17, 2010 at 11:24 pm
WBRE Is still on the cable line-up in the Utica NY market. It may be time to pull out the big guns and have the corporate attorney shake up Time Warner Cable. Next it is time to have Time Warner Cable knocked down a peg or two. This company has obviously become too big to be of any good public service to anyone. Next, the mayor of Utica NY should REVOKE Time Warner Cables franchise rights in that market and bring in another cable operator. A “little” competition would keep everyone on a level playing field.
Manuel Morales says:
December 17, 2010 at 9:38 am
Good to hear Perry. Nothing TW does should shock anyone. They are now liable to Nexstar under the Copyright act. This is a willful infringement.
Kate Vossen says:
December 17, 2010 at 10:29 am
Time Warner is nothing but a bully. They bully everyone – including their subscribers. They also flat out lie. I hope they loose more subscribers to OTA. They have a NY News channel that competes with broadcast. How their monopolistic behavior is allowed I do not know. Fact: They would rather not carry any broadcaster for they even ignore must carry and its “free” programming.
scumbags
Lance Vitanza says:
December 17, 2010 at 10:53 am
Cable penetration is eroding so quickly, not sure why this is a major issue. With each passsing day, cable HH’s convert to ADS, and it seems the cable industry continues to find ways to shoot itself “in the foot”. If the local stations no longer on cable loose advertising revenue, they will gain it back over time. However, when TWC (or other cable providers) loose a customer, they are gone forever. So, who is the winner here? It’s certainly not TWC.
Greta Mittereder says:
December 17, 2010 at 11:06 am
gentleman in this day in the busniess Cease and Desist by some managers could me a F*** off you should know that and how things have changed . In the world of DirecTv and Dish Network. Their customers WILL not put of with it and change over. I have been in the busniess since 1984 I have had DirecTv since 2004 and would NEVER go back to Charter.
Lance Vitanza says:
December 17, 2010 at 10:59 am
A question to those of you that operate local stations…since cable is selling avails in the local market, and competing with stations for local advertising dollars, why have you allowed cable to (in many cases) make false claims to the advertising community regarding how many homes actually receive television via cable? As an advertising firm, we find that many cable systems provide false data regarding how many subscribers they actually reach in an effort to sell the local spot to the local advertiser. As a company that buys advertising, we find it very difficult to determine just how many homes our ad dollar will reach if we insert via cable. When we do learn actual numbers, they seem (almost always) to be far less than the cable sales department has stated…in some cases a LOT less. Have wondered over recent months why local television stations do not help advertisers such as us have the correct data on just how few homes actually receive cable. Just a thought.
mike tomasino says:
December 17, 2010 at 12:24 pm
Cable companies have made lying to their customers standard operating procedure, so why doesn’t it surprise me that they would lie to their advertisers? Even if you believe Neilson (which I don’t) wired cable only reaches 54% of the market. Meanwhile local TV reaches 100% of the market and has the most watched programming. That seems like a better deal to me!
Brad Dann says:
December 17, 2010 at 4:44 pm
No TV station in this country has 100% Net Weekly Circulation, so nobody “reaches” 100%. I’ve sold Cable and Broadcast and everybody lies. There are plenty of TV stations whose signal strength doesn’t allow them to reach 100% and everybody would be better off without these kind of arguments. The question for an advertiser is, will this make my cash register ring?
Casey Cotton says:
December 17, 2010 at 12:11 pm
Thanks, Perry, for not being a part of TW’s dirty tricks.
jeff lee says:
December 17, 2010 at 1:26 pm
Sounds like TWC is the one bargaining in bad faith (or no faith). I’m sure the FCC will be on TWC’s side on this one anyway. John Kerry is probably smiling……
Manuel Morales says:
December 17, 2010 at 2:10 pm
It will be very interesting to see how this shakes out. TW is willfully infringing on copyrights yet at the same time they’re begging for gov intervention in their negotiations. I would love to know who authotized this copyright infringement.
Cara Pearson says:
December 17, 2010 at 4:15 pm
A big break for ABC’s WUTR with no local news coming from the only local competition WKTV. I was there when WUTR signed on as a UHF station against the boomer channel 2 V.
Amy Warren says:
December 17, 2010 at 8:23 pm
It seems to me that Perry Sook is doing the right thing (not allowing use of his signal in another market). Only he knows if it is for legal or moral reasons, or both.
But at least he’s doing the right thing.
Pel Ican says:
December 18, 2010 at 6:59 am
If TWC wasn’t the only choice for cable maybe they would negotiate in good faith. Take away their franchise rights and they would be forced to talk. Have multiple cable operators like there is multiple telephone providers and watch rates go down. Stations need to insist on not allowing their signals to be imported because it is going to come back to haunt them latter. The trend is video migrating to the web, on demand and television stations need to be prepared for that. Shame on the networks for pushing more and more of their content off of their affiliates. Be prepared this is just the beginning of the content distribution war. There is more on the horizon
Billy McDowell says:
December 19, 2010 at 11:40 am
I worked in the technical side of broadcasting for many years, but am now in a different industry. Call me stupid if you wish, but I frankly don’t understand the whole retransmission compensation issue. At least not in smaller rural markets that are very dependent on cable.
In my area, (which is quite mountainous) our signal would probably have reached only 15% of our viewers directly over-the-air, and frankly, I think that in this day and age, maybe only 1 out of 5 viewers are even aware of the concept that one can actually receive televsion programming OTA using an antenna.
Until very recently, probably 75% of all televsion householfs were able to watch my former employer’s programming ONLY on cable – (mainly TWC, but there were several small locally-owned cable systems involved as well.) Neither satellite network offered local-into-local until very recently, and even now, only one of the two is providing the local affiliate – the other still imports ABC out of New York City.
In other words, if not for the cable operators’ retransmission of our signal into the local market, we wouldn’t HAVE any viewers – certainly not enough to pay the bills via local ad revenue.
The cable systems charge nothing (to the local station) for this service. Why should the cable company pay the local broadcaster for content? If anything, it should be the other way around – as the cable company transports the local signal into thousands of households who could not get it any other way. In our DMA, which contains 4 medium-sized cities, only one of those 4 towns would have had even the remotest chance of being able to reach viewers directly OTA. The other 3 are blocked by terrain.
In a situation like this, expecting the cable company to pay the broadcaster, seems like expecting a shipping company like Fedex to pay the SHIPPER for the “privilege” of transporting his package from point A to point B.
Yes, I realize the cable operator receives revenue from its customers for providing the local station’s signal as part of its channel lineup, but considering that the local station is only 1 of 400+ other channels in the cable lineup, the actual percentage of revenue would only be a few cents per subscriber.
kendra campbell says:
December 19, 2010 at 2:55 pm
Vorbish – you are a breath of fresh air. Why the cable companies have agreed to pay broadcasters for the “privilege” of providing their off-air signals is beyond me. I’m not fan of the cable companies, but they should have taken a hard line position on this long ago. Just say no to the stations. They will come crawling back in about a week – and cable bills will come down by a few bucks a month. Enough of this nonsense.
Kate Vossen says:
December 19, 2010 at 9:17 pm
Vorbish and jdshaw you do not get it. We need see channels unbundled and if a cable channel – which is subsidized via subscriber revenues – wants to charge a customer – let the customer decide if they want it. Same for OTA. As a broadcaster I am sick of having cable channels bid for product against us because they get these subscriber subsidies. To compete fairly for programming we should have the same right to charge or not charge for our signal. Cable is CATV – Community Antenna Television – Yet they have to be forced to carry broadcasters because they are advertising competitors who want free programming and no local competition.
If one is not a big 4 affiliate they will do everything possible to keep a broadcaster off the community antenna system – so must carry was instituted. I am still fighting with Time Warner who is ignoring must carry rules and notifications.
They are scumbags – pure and simple and I hope Smith gets $4.50 per sub like ESPN. No TW screams if they ask 50 cents and claims they cannot afford it. What a lie and what a joke.
If they really were serious about costs they would attack the outrageous cable channel rates they pay and quit blaming the providers of the best programming they have for the out of control costs of cable.