Time Warner blackout of CBS goes into 3rd day
- August 4, 2013 - 2:00 PM
NEW YORK — Three million Time Warner Cable customers in New York, Los Angeles, Dallas and other cities remained without access to CBS on Sunday, meaning they could miss Tiger Woods' attempt to win the Bridgestone Invitational.
The cable provider cut off CBS for viewers in those markets on Friday, saying the network is demanding retransmission fees that are out of line with what it pays other broadcasters.
CBS says it's never been dropped by a cable provider before and that it has successfully negotiated deals with other providers including AT&T, Cablevision, Comcast, DirecTV and Verizon.
A spokeswoman for Time Warner, Maureen Huff, said Sunday that "talks continue." A representative for CBS declined to comment on the status of the negotiations.
The two New York-based companies have been taking their cases to the public, with full-page print ads in local papers.
Time Warner Cable customers who turned to CBS this weekend were also greeted by a message on white screen saying the network had made "outrageous demands" for fees. It advised viewers that they could still see their favorite shows through several ways, including "using an antenna to get CBS free over the air."
Although CBS sends its signal out over the airwaves for free to anyone with an antenna, about 85 percent of CBS viewers watch TV through a pay TV provider.
CBS is trying to gain revenue from retransmission fees as a buffer against swings in advertising revenue. Analysts say earning revenue from pay TV subscribers is crucial to the network's growth prospects.
Time Warner, meanwhile, says giving in to demands for higher fees would result in skyrocketing bills for customers. DirecTV came to the defense of its competitor, saying it applauded Time Warner for "fighting back against exorbitant programming cost increases."
Time Warner is trying to hold down costs as it fights to keep subscribers. In the most recent quarter, it lost 191,000 cable TV subscribers, ending with 11.7 million at the end of June.
Both companies nevertheless posted healthy quarterly earnings this week. Time Warner Cable Inc. grew its net income 6 percent to $481 million, as revenue rose 3 percent to $5.55 billion. CBS Corp. grew net income 11 percent to $472 million on stronger revenue.
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