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SBJ/January 21-27, 2013/In Depth
DirecTV's competitors see an opening
Published January 21, 2013, Page 17
Cable and telecommunications companies offer broadband and telephone service, which can help them subsidize programming costs better than DirecTV, which can’t compete in those areas.
The situation has caused cable operators to see an opening. The two biggest cable operators, Comcast and Time Warner
“We’re trying to put our message out,” said Time Warner Cable’s chief video and content officer, Melinda Witmer. “Southern California is helping us with the branding around our channels there.”
Like DirecTV, cable’s carriage battles sometimes become public. MSG Network went dark on Time Warner Cable’s New York-area systems for a month and a half at the beginning of last year. A few months later, Time Warner Cable signed a deal with the NFL Network, ending a years-long negotiation between the two.
Witmer said that sports costs, while high, are not as big of an issue for Time Warner Cable as retransmission consent fees that broadcasters are seeking.
“The biggest problem we have is retrans,” Witmer said. “Sports is more high profile. But it is not going up at the same rate.”
With reams of viewership data from set-top boxes, distributors say they are better able to determine the channels they can afford to lose.
“We’re taking a much harder look at content, in general, but in particular sports because sports costs are rising so fast,” said Jeff Weber, AT&T’s president of content. “We’re really looking at does it make sense or not for our customers.”
AT&T does not base its decisions on total viewership data. Rather, it looks to see how intense fans are, based on how often they tune in. The more intense the fans, the more likely they will drop a service that doesn’t carry channels they want.
“We get to a point where we are willing to pay a certain amount based on really precise data about intensity of viewership. We are absolutely willing to walk away,” Weber said. “Viewership tells you an average story. But intensity of viewership — how often, how long — really tells you if these customers are passionate and if they are going to leave if they can’t get this content.”