Fox Extends Its Fee Standoff With Cablevision to the Internet -- Briefly, At Least
Retransmission wars between cable providers and the media companies who torture them have gotten almost, well, boring. So much so that the one currently going on between News Corp.'s (NWS) Fox and my cable provider, Cablevision -- which is even deep-sixing transmission of some baseball playoff games -- I thought barely merited mention on this blog.
Until this past weekend. That's when News Corp. -- temporarily, at least -- began to truly innovate on the tired retransmission war battlegroundby blocking Fox shows on Hulu and Fox.com briefly for Cablevision Internet subscribers over the weekend. How devious! How cunning! The retrans wars just went cross-platform!
Though the lock-out didn't last, after complaints apparently made it clear to News Corp. that cutting the Hulu cord went too far, it does show just how far these companies are willing to go in their grubby struggle over retransmission fees. Whether it was intended or not, taking the Internet viewing option off the table for Cablevision customers would drive them elsewhere, to Verizon's FiOS, which has been making inroads in Cablevision markets, and also toward satellite providers and services like iTunes, where consumers would actually have to pay to download shows like Glee. News Corp. execs probably loved fantasizing about that.
However, it's more likely that News Corp. was trying to protect the so-called exclusivity of its content. Pulling content off Hulu and Fox.com is clear acknowledgment that consumers know how to go elsewhere -- and will do so -- if one route to their favorite shows has been blocked off. They know the back roads. And News Corp. is demanding a lot to keep the main highway to its programming open -- asking Cablevision to pay $150 million per year as opposed to the $70 million it currently pays. (Needless to say, at last report, the two sides were far apart.)
As a side note, Hulu's role in this game is well, odd. According to Peter Kafka at AllThingsD, Hulu stated its position this way:
Unfortunately, we were put in a position of needing to block Fox content on Hulu in order to remain neutral during contract negotiations between Fox and Cablevision. This only includes Fox content. All other Hulu content is accessible to Cablevision internet subscribers. We regret the impact on Cablevision customers and look forward to returning Fox content to those users as soon as possible.But really, that claim of neutrality doesn't make much sense. As News Corp. is a part owner of Hulu, doesn't blocking Fox content to Cablevision subscribers mean it is siding with Fox? You also have to wonder if one factor that may have made News Corp. think twice about blocking the content in the end had nothing to do with consumer complaints. Hulu is meant to launch its subscription service, Hulu Plus, this month -- and News Corp. has been the most vocal among Hulu's partners about the need for Hulu to build a subscription model. Simultaneously blocking content to Fox programming on Hulu while trying to woo subscribers isn't exactly smart.
And it's also a great demonstration of the tangled Web these retrans wars weave.
Related: