July 11, 2012

No resolution in sight as Time Warner drops WMTW in fee dispute

The blackout, a growing trend, forces viewers to find ABC shows elsewhere.

By Ray Routhier rrouthier@pressherald.com
Staff Writer

When John Platt heard that Portland's ABC television station had been blacked out to Time Warner Cable viewers in a dispute over money, his reaction was quick and firm.

"Disgust," said Platt, 43, a freelance science writer from Wiscasset. "Time Warner is making plenty of money. Cable subscribers are dropping all the time, watching shows online, and things like this don't help that."

In a scenario that has been rare in southern Maine but is becoming common nationally, WMTW (Channel 8) was dropped from Time Warner's cable lineup in Maine early Tuesday. Time Warner has more than 360,000 subscribers in Maine, and serves most of the southern part of the state.

WMTW was blacked out when the agreement that Time Warner had with the station's parent company, Hearst Television, expired at the end of Monday. The two sides failed to agree on new terms.

Time Warner claims that Hearst wants a 300 percent increase in what Time Warner pays to air 13 Hearst stations nationwide. Hearst did not respond to requests for comment Tuesday.

Neither side has said, or released information saying, how much Time Warner was paying to Hearst.

WMTW officials did not return calls for comment Tuesday. A statement on the station's website was not optimistic about a quick settlement, saying, "Unless there is a change in Time Warner's position, carriage of WMTW will no longer be available to you on Time Warner systems."

The statement urged viewers to make other arrangements to watch WMTW, and listed phone numbers for satellite providers.

Time Warner spokesman Andrew Russell said company officials are "hopeful that the channel will be returned to the lineup shortly."

Russell did not know when negotiations would continue, but in a written statement, he firmly blamed the blackout on Hearst.

"One cause of higher cable TV prices is higher fees being demanded by greedy broadcasters -- as their advertising dollars decline, they want cable customers to make up the difference. And if we don't agree to their outrageous demands, they take away their programming," the statement read.

Russell did not say how many Time Warner customers in Maine are affected by the blackout.

One of the few TV blackouts in Portland happened in 1993, when WCSH (Channel 6) and WGME (Channel 13) were dropped by Public Cable, Time Warner's predecessor in Greater Portland. WCSH was off for a month; WGME was off for two days.

Nationally, more than 100 cities have seen station blackouts on cable and satellite services in the past two years.

Media analysts say the trend will continue as station owners see advertising revenue decline and seek higher fees from cable providers. At the same time, cable and satellite providers are losing viewers to online programming while facing steep fees from networks.

"Cable companies are losing business to competitors like AT&T, Verizon FiOS, Netflix and assorted other technologies. Even the old-fashioned rooftop antenna is making a comeback," said Jeff Kagan, an Atlanta-based technology analyst. "But it's not just the cable companies' fault. Many networks charge much too much. Networks like ESPN overcharge everyone. Even customers who don't watch it have to pay a lot just to get it. The cable television system is broken."

According to estimates by a Virginia firm that analyzes the cable industry, SNLKagan, ESPN was getting about $4.76 per subscriber in 2011 from cable and satellite providers.

The fees paid to companies that own network affiliates like WMTW were estimated at less than 75 cents per subscriber by SNLKagan. (Jeff Kagan and SNLKagan are not affiliated.)

While the blackout could make viewers miss their favorite ABC shows for a while -- including the highly rated "Good Morning America" and the long-running soap opera "General Hospital" – Russell said the cable provider is working on ways to provide ABC programming that does not come from WMTW.

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