Les Moonves Can’t Understand Why Time Warner Cable Won’t Pay CBS What Verizon Just Did
To some people, it seemed like a big deal a few weeks ago, but you don’t hear much about it anymore.
In any case, it’s still going on. This is worth noting this morning because CBS and Verizon, which pays CBS for the rights to show its programming on its Fios TV service, just announced a new deal.
Like Time Warner Cable, Verizon has a lot of TV customers in Los Angeles, New York and Dallas, so the parallels are pretty clear.
And just in case they’re not, CBS CEO Les Moonves spells them out in a staff memo, which he sent out this morning:
From: A Message from Leslie Moonves
Sent: Thursday, August 22, 2013 10:00 AM
Subject: Verizon FiOS Carriage Agreement
I am pleased to inform you that today we signed a three-year content carriage agreement with Verizon for its FiOS systems across the country. This important deal was reached swiftly and amicably in just a few days after our conversations began. In it, we achieve fair value for our over-the-air rights, while preserving our streaming rights as well. CBS content will be available to 100% of all Verizon FiOS customers, and we will grow as they do. Our CBS Sports Network will be available on a broader tier, which will add millions of subscribers to that growing business. In short, this is a great deal for CBS and for Verizon, which has 5 million subscribers, the majority in New York, Los Angeles and Dallas.
Those cities may seem familiar to you as you follow our situation with Time Warner Cable. They cover almost precisely the same territory, but Verizon has more subscribers in those markets, where we are now blacked out by that cable company for going on three full weeks now. You should know that Time Warner Cable has been offered almost exactly the same deal for CBS carriage to which Verizon has agreed.
I cannot describe to you the frustration I feel at the way these negotiations have gone. Never in my most pessimistic moments did I ever think that they would have lasted this long and have been so difficult. In many aspects of the deal, Time Warner Cable is demanding different terms than any other company in the business. I am frankly mystified by what appears to be a lack of urgency to resolve this matter for their customers.
Still, we’ll keep talking. Today’s announcement makes clear, however, if there was ever any doubt, that we are prepared to move decisively and thoughtfully to achieve a good conclusion for all parties involved in these kinds of negotiations. When Time Warner Cable is ready, we’ll be there.
Congratulations to our great negotiating team on this terrific agreement with Verizon, and thanks to you all, as always, for your support.
Leaving aside the color Moonves uses to describe the state of the Time Warner Cable announcements (most people I talk to don’t expect anything to happen until September, when new programming from CBS and NFL games give both sides a real incentive to make a deal), the one thing worth noting here is Moonves’s reference to digital rights.
In short: The standard offer CBS makes to pay TV providers gives them a limited ability to stream its shows, on-demand, some time after they air on TV, on their own “TV Everywhere” services.
Some pay TV services are now asking for the ability to stream more shows, or to stream them live — Comcast, for instance, has a deal like that with Disney/ABC, as well as Fox — but the network guys want to charge more for them, and they want to make sure those deals don’t screw up their ability to sell reruns to the likes of Netflix and Amazon.
And that’s part of the dispute between CBS and Time Warner Cable. On the other hand, you can simply argue that all of this is about money, period, and however you slice it up is sort of beside the point.