Fox-Time Warner rift shows new TV biz

TEXT OF STORY

BILL RADKE: News Corporation and Time Warner Cable . . . they’re still duking it out today. News Corp., of course, owns the Fox Network and other channels. And it’s trying to charge Time Warner more money
to carry its signals. It’s not just those two battling over subscription fees, either.

Marketplace’s Amy Scott reports the whole television business is changing, and everyone wants to set the rules.

AMY SCOTT: This was on channel 5 in Manhattan this afternoon:

TV BROADCAST: Another crazy day…. Which means another TMZ live!

Unremarkable, except that Fox had threatened to pull shows like TMZ from Time Warner Cable today. Instead, the two sides agreed to keep talking after their contract expired at midnight.

Paul Gallant is an analyst with Concept Capital. He says as advertising revenue dries up, broadcasters like Fox are looking to cable fees.

Paul Gallant: The model of advertising-supported local TV is getting really challenged in the marketplace. And so TV stations are saying, “Look, what we need is a second revenue stream besides advertising.”

It’s not just Fox and Time Warner digging in their heels. Cablevision said today it will no longer carry the Food Network and HGTV in the New York area. That, after their owner Scripps Networks demanded higher fees.

Robert Thompson is a professor of television and popular culture at Syracuse University. He says the usual year-end contract disputes have taken on new urgency as the television business model changes.

Robert Thompson: I think it’s the same reason we saw the intensity of the last writers’ strike. Everybody wants to make sure as this equation gets redefined, that they are in a beneficial position with that new equation.

Thompson says it’s viewers who’ll lose out. When the dust finally settles, he says, it’s almost a given they’ll pay more for television.

In New York, I’m Amy Scott for Marketplace.