Peter Kafka

Recent Posts by Peter Kafka

Why the Web Matters in the Viacom/Time Warner Fight

The Viacom/Time Warner Cable faceoff–Viacom is threatening to yank its channels (Comedy Central, Nickelodeon, MTV, etc.) off the screens of the cable company’s 13.3 million subscribers at midnight tonight–is nothing new. A cable network wants more money, a cable operator doesn’t want to pay up. Happens periodically.

The new twist here is what broadband video adds to the equation: It’s both a plus for Viacom (VIA), and a source of irritation for Time Warner Cable (TWC).

  • The upside for Viacom: Additional leverage as it negotiates with Time Warner. If you can’t get “The Daily Show” on your TV in January, you can watch it all over the Web: At its own site, at Fox and NBC’s Hulu, and on Comcast’s (CMCSA) Fancast.
  • But that same promiscuity with content is one of the things that’s now stuck in the craw of Time Warner: It figures it is paying Viacom a per subscriber fee because those subscribers can only get Viacom’s stuff on cable. If they can get it anywhere, the argument goes, it’s less valuable.

I don’t want to overstate the importance of the Web here: Cable subscription revenues are going to be much, much bigger than Web dollars for Viacom and other content providers for a very long time. And there’s no reason to think this won’t get resolved in the way that all these fights get settled: Time Warner pays more than it wants, Viacom accepts less than it was looking for.

But do look for the cable guys to wring some additional online concessions out of the networks in the years to come: Either the ability to distribute the shows online themselves (hence, Fancast), or a piece of online revenues, in some form or another.

Meanwhile, here’s Viacom’s 30-second ad, which you can now find on YouTube, of course:

And here’s a highlight from the last broadcast of “The Daily Show”: Hall and Oates playing tribute to former News Corp. employee Alan Colmes:

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work