updated 07:47 pm EDT, Thu August 8, 2013
CBS, Time Warner accuse each other of having hidden agendas
While negotiations to restore CBS programming to Time Warner Cable are underway, reports indicate that they aren't going well. A CBS executive said today that the talks have "gone badly off course" and blamed Time Warner for forcing conditions on the broadcast agreement that would hamper CBS's efforts to work with streaming companies such as Netflix, Apple's iTunes, and Amazon.
Time Warner Cable's regional vice president of government relations called CBS's bundling "coercive" and said that the blanket ban of CBS online content, including website blocks on visitors with Time Warner IP addresses, was "beyond the pale." The IP-based block is affecting not only Time Warner Cable subscriber access to the content, but also other smaller ISPs that lease service from Time Warner. Some DirecTV customers are affected by the Internet blacklist as well because of the Internet deal the satellite company maintains with the cable company.
CBS executive vice president Martin Franks claims that Time Warner Cable has ulterior motives in the negotiations. "Perhaps their real aim here is to use those outdated terms to hamstring our ability to do business with Netflix, Amazon, Hulu Plus and other new entrants that pose a new competitive threat to their former, cozy, unchallenged monopoly status," Franks said. "CBS is not going to become Time Warner Cable's accomplice in trying to throttle those new services."
Earlier this week, Time Warner CEO Glen Britt suggested to CBS that it offer CBS's programming 'a la carte.' CBS flat-out refused Britt's offer, calling the proposal a "sham" and "an empty gesture."
CBS claims to want "fair compensation for the most-watched television network with the most popular content in the world. We will not accept less. We will not sign away rights not granted to others. We will not give up our channel position or any other asset by which our viewers identify us." Shortly after Time Warner Cable pulled CBS content, CBS started blocking Time Warner Cable Internet service customers from its online content.
According to sources, Time Warner Cable pays between 75 cents and $1 per subscriber for CBS programming. CBS is reported seeking as much as $2 per customer. CBS CEO Les Moonves said in a memo to customers earlier this month that "it's not like Time Warner Cable doesn't have the money. Cable is a very, very profitable business, and Time Warner Cable can certainly afford to pay CBS a fair rate for our programming without passing any added cost on to its customers."