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In Cablevision/Fox War, Content -- Once Again -- Is King

Since the two sides were so far apart, when Cablevision (CVC) suddenly reinstated Fox on its system in time for Saturday night's World Series game, it seemed that somebody caved: it turned out to be Cablevision. Though details of the settlement weren't released, the only winner in this battle is News Corp. (NWS) -- which, of course, has the monopoly on some premium content, while Cablevision only has exclusivity on its local news channel and in being the sole cable operator in an area where cable operators are no longer the only game in town.

Cablevision even admitted it got a raw deal. The timing, meanwhile, seemed linked to the fact that another distributor of TV content -- Dish Network -- ceded to Fox's demands the day before in its own contract negotiation with the network.

Though Cablevision is a small fry in the cable business, with three million subscribers (including my family), it faces the same dynamic that is playing itself out in many retransmission wars: content is king and don't you forget it. But let's be clear: it's not as though Cablevision saw any real impact on its current business from what turned out to be the longest retrans blackout ever, at about 16 days. By the estimate of Craig Moffett, an analyst at Sanford Bernstein, it lost only 8,000 subscribers, mostly to Verizon FiOS.

Still, one wonders if even that was enough to give Cablevision the willies. As is usually the case when a network is blacked out, consumers start to look elsewhere. In fact, Cablevision itself introduced consumers to Major League Baseball's streaming service, telling customers who used it that all they needed to do was present proof of purchase and Cablevision would reimburse them.

Meanwhile, I was struck by a press release from a little company called ivi TV, which says it streams the networks legally to subscribers (apparently through an interesting interpretation of copyright law). It said its subscriptions, which are $4.99/month, increased 323 percent (though without, of course, saying what the base was).

But, to an extent, the point is made. There are a variety of competitors, big and small, willing to pipe the same content that Cablevision offers -- often for less. Knowing that even a small set of customers began to experience a world without Cablevision may have been too much to bear.


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