SBD/January 8, 2013/Media

Rising Costs For TV Sports Rights Imperiling Smaller, Independent Cable Channels

Cable TV distributors have “talked for years” about dropping some channels, but “two things are different now: potential Web competitors are creeping up and programming costs are soaring, particularly for sports channels and broadcasters,” according to Brian Stelter of the N.Y. TIMES. Time Warner Cable Exec VP and Chief Video & Content Officer Melinda Witmer said, “We are having to take a very hard look at our lineup, not unlike a network that takes a hard look at its lineup when deciding what shows it will put on the air.” Witmer predicted "more changes in the future." She said the changes would "enable consumers to buy the stuff that we’ve really got to have, and let go of stuff that’s not really moving the dial.” Stelter noted TWC among major distributors is “taking the most aggressive public stance against low-rated channels.” When TWC “warned that it might drop Current last month, it also singled out low-rated channels like Hallmark, IFC, Lifetime, NHL Network, the Style Network and WE tv.” But channels with exclusive sports rights are “crucial, even though they may make profitable distributors feel impoverished.” Witmer: “Any given one may not have a huge amount of viewership relative to a national service, but if you lose that team, you’re losing subscribers.” Stelter noted programmers and distributors have “found it in their best interests” to keep the current system intact (N.Y. TIMES, 1/7).

INSIDE THE MAGIC KINGDOM
: REUTERS’ Ronald Grover cited sources as saying that Disney several weeks ago “started an internal cost cutting review ... that may include layoffs at its studio and other units.” Disney execs “warned in November that the rising cost of sports rights and moribund home video sales will dampen growth” (REUTERS, 1/7).
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