Time Warner Cable, News Corp., Let Me Tell You Why You Need Each Other

(MoneyWatch)  Nothing quite says "Happy New Year" like a feud between cable operators and media companies. Last year, we had Time Warner Cable's notorious showdown with Viacom. This year, courtesy of a media war, we're being treated to Time Warner Cable (and Bright House) vs. News Corp., with the latter charging the former is asking so much in terms of carriage fees that it may stop carrying Fox altogether, right before some of its heavy-hitters, such as "American Idol" and "24" begin their seasons.

Yeah, like that'll happen. Even as they feud, Time Warner Cable and News Corp. need each other, now more than ever. In these days of changing viewership habits and shifting business models, preserving the status quo for consumers, by any means necessary, is what it's all about. And, neither Time Warner Cable, nor News Corp., nor Bright House needs to be reminding consumers that getting the TV channels and programs one wants is no longer an all-or-nothing game.

Cable operators need News Corp. because as telcos and satellite providers continue to pitch consumers aggressively on getting their TV service through means other than their local cable company, the lack of certain key channels provides just another reason to switch.

News Corp. -- and other media companies -- need to have their content transmitted through TV sets, no matter who consumers pay to do so, because the online model is yet to be figured out. It's obvious that the big broadcasters, particularly News Corp., are very concerned about what their business model should be online. Rupert Murdoch and his minions have been more than a little vocal about the need for the joint venture Hulu (which is also part-owned by Disney/ABC and NBC Universal) to develop a subscription model. The last thing it needs is to under-monetize more consumers than it is already by sending them to online to watch their favorite Fox shows. (One wonders if Fox can pull its content from Hulu at will.)

In fact, at the Web site KeepFoxOn.com, run by News Corp., the company doesn't even acknowledge that Hulu exists. In a section titled, "Where Else Can I Get My Programming?", the company acknowledges many options, but Hulu, where much of its primetime programming runs, is not among them. (TWC has a counter site, RollOverOrGetTough.com.)

However, if I had to pick a near-term loser in this face-off, I'd actually News Corp., even as it becomes increasingly aggressive in trying to extract $1/subscriber from cable operators. Consumers can choose to watch programming online on-the-fly, while changing TV providers to telco or satellite is a much more involved process.

In any event, if Fox channels go dark on TWC and Bright House when the current contract ends on Dec. 31st, it'll be extremely brief. No one in this business wants to open Pandora's Box, where a lot of options for consumers reside.