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The negotiations over the subscription fees that TWC pays to carry KXAN and other LIN-TV station signals are reported to still be underway, but for the immediate future Time Warner subscribers will need to seek alternate means of tuning into their favorite NBC shows.
calling it an "oxygen booth."
Today we're presenting our interview with Jeff Simmermon, Director of Digital Communications for Time Warner Cable, in the hopes of providing both perspectives on this ongoing—and very public—dispute.
(Full disclaimer: Simmermon was previously a freelance contributor to our sister site DCist several years ago)
We've heard KXAN/LIN-TV's side of the story. So what's TWC's position on this? Is LIN-TV asking for too much money?
Absolutely. Broadcast signals have been free for the past 6 decades -- LIN TV is taking a free signal and charging for it without performing the enhanced clarity and distribution that we do.
If it is indeed a matter of money, why was LIN-TV able to negotiate retransmission contracts with the other telecomms?
That assertion from LIN is patently ridiculous. No deal is permanent. We've reached an agreement with every other broadcaster in our entire cable footprint, and LIN's the only holdout.
How do the terms of LIN-TV's proposal differ from those of other networks (ABC, CBS, etc)?
I'm not at liberty to discuss the terms of LIN's proposal. However, I should clarify that LIN TV is a corporate conglomerate that owns FOX, NBC, etc. affiliates in a number of different markets. They're not a network like NBC.
Please explain why TWC believes that KXAN's programming is free and therefore not worth the "less than a penny per day per subscriber" that has been asked for.
Anyone with an antenna can plug it into their TV and see KXAN without spending a single red cent. We're the ones who take that signal, clarify it tomake the picture reliable and amplify it to reach many, many more people than KXAN could reach without us. Furthermore, Hulu.com and NBC.com show NBC's must-see programming like 30 Rock and The Office for free online. It's Bizarro-world economics to charge money for something that's available for free. Not unlike setting up a tent in one's backyard, charging admission and calling it an "oxygen booth."
Will TWC take KXAN's feed off of TWC's broadcast service tonight, as everyone has stated? If so, who is (physically) initiating the actual break?
By now this question has partially answered itself. But make no mistake: we did not take KXAN off the air. That was LIN's decision, not ours. Last night, we were negotiating pretty well with LIN TV. Or so we thought. We offered to work through the night to reach an agreement and they refused, despite acknowledging progress in the negotiations. All we wanted was a short extension so we could complete the negotiations, but LIN TV preferred to pull the signal off the air in a blatant disregard for their own viewers and advertisers.
What does this potential breakup mean for Time Warner customers who want to tune in to NBC programming?
As I mentioned before, you can view NBC programming for free with a regular broadcast antenna. We're giving away broadcast antenna kits for free at our local offices (12012 N. MoPac Expressway, Austin, Texas 78758) -- customers without antennas can pick those up during business hours cables to connect computers to the television set. Furthermore, we've prepared an instructional video to show our customers how to hook their computers right up to their television sets so they can watch all the free NBC programming available online on TV: http://tinyurl.com/cpu2tv or http://www.youtube.com/watch?v=nLeKft9Tb2s
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Time Warner Cable adds value to their service by carrying KXAN. KXAN/LIN understands that, and would like to charge Time Warner to redistribute that on their network. If Time Warner doesn't want to do that, and thinks that they will make more money not carrying one of the four major networks, that's well within their rights. They may add clarity and amplify it, but in the same breath they tell you why you don't need NBC on cable (and by extension many other stations time warner carries), so it sounds like they're performing some voodoo economics of their own.
A couple of analogies:
1) Say I have a lake, and I let everyone come to that lake and drink for free, since it is a magic lake that is constantly full (i.e. people consuming it doesn't take away anything).
Time Warner comes to my lake and decides to build a pump and pipelines and send water from my lake to everyone in town. They are performing a service that is reliant on my lake's existence. Does it not make sense for me to charge them a fee to use my lake? People are still welcome to come to the lake themselves, but if they want to get it via a pipe to their home, they pay Time Warner, and Time Warner pays me. Sounds reasonable.
2) Say I live in a city with a bunch of parks like Austin. I decide to set up a service where you can pay me 65 dollars a month for access to 300 parks. 5 of those parks are free (one of them being Zilker), and you can enter on your own if you want, but you get to visit them on a tour of the other 295 with my package. Granted, only 10 of those parks are worth visiting, and 5 of those are the free ones anyways. The city then decides to charge me a fee for each person I sell a ticket to. I'm profiting off of the city's works, doesn't it make sense for the city to charge me for that privilege?
Note: I don't subscribe to time warner, and watch KXAN over the air so what do I know. If I had time warner, though, i'd be pretty pissed. At time warner.
The folks at TWC Austin and the folks at KXAN are between a rock and a hard place. This is really a pissing contest between two corporate entities that bleeds down into various local markets, including Austin. The local entities really can't do anything but watch Corporate dig in its heels.
I'd hate to be the people answering phones and e-mails at KXAN today. They had nothing to do with this, they have no power to do anything about it, and they're probably the ones who are getting all the abuse.
So anyone know if you can get out of a Time Warner price-lock due to this? This is a pretty good incentive to permanently hook a computer up to my tv and watch all my TV online.
I think that LIN is cutting off their nose to spite their face.
Like it our not, TWC has a good many of us in Austin by the balls. Grande is not available in my area. Dish/AT&T charge more for less service. Bottom line, like many other TWC Subscribers, I am not going to switch providers because *boo hoo* we don't have KXAN. I'll just use my Road Runner internet access to get the shows I want (with the exception of the NFL) via Hulu or NBC.com. This is just going to eat away at KXAN viewership and ad revenue.
But yes, as a TWC subscriber, I AM pissed. I am pissed off at both TW and LIN. This is a greedy pissing match - neither side wins and the consumers lose.
Nothin' like a good old fashioned pissing match to brighten your day.
Grande Communications offers NBC in its base package, so if you don't want to miss the office, now is a great time to switch. You'll also benefit from more reliable and prompt service.
I had an outtage on a wednesday with Time Warner, scheduled for a thursday service call. Technician came out, said the problem was further up the line and that it was affecting all the homes in my neighborhood. It was to require a second-tier technician to fix it.
Their second-tier techs were already booked for friday, and they don't do weekends, so we didn't get internet service restored until Monday.
With Grande, they have no problem making service calls on the weekend. I have had them out on a Saturday afternoon and my service was fixed immediately.
Seth
TWC does not charge you for local channels. If you have basic you do pay money for the service yes. You are paying for TWC to do the installation in your house, maintain the service, process your bill, do any repairs in the future.
I hate to say it but Im with TWC on this one. LinTV wants to charge them for the 15 lintv station in TWC markets, I figure that could come out to $10,000,000.. thats $.01 per subscriber per channel per day. TWC is a business, I would not expect them to just eat that cost. They don't want to have to pass it along to us the subscribers. TWC has a history of not giving in to extortion i.e. nfl network. I just hope they can get an NBC feed from a non-lintv affiliate in waco or san antonio.
Charles, your analogy is off. A better one would be TW being the the city water utility, which has to maintain pipes and whatnot, to bring water to your house versus the antenna being just catching the water yourself with rain barrels and making sure it stays pure enough to drink, never runs out, etc.
@mdahmus except that time warner actually degrades image quality on HD feeds by oversharpening and recompressing... I would wager that time warner cable's gone down more than a broadcast antenna, though.
Don't know; I'm a Grande guy with a TV so old it only has a coaxial input. But the point is that you don't need to buy or maintain your own infrastructure with the cable company - that's the service they provide above and beyond the signal, and KXAN contributes nothing to that service.
I've never been a big fan of Time Warner but I'm glad they fought the NFL Network and I'm glad they're fighting LIN.
There is no reason why everyone should have to pay for the NFL Network. I do enjoy watching football but I do not want the network.
If LIN wins this fight then every broadcast station is going to ask for money. Each year they are going to want more money.
On the rare occasion that I want to watch something on NBC I will use an antenna.
Be advised, what Simmermon said about the antenna kits is absolute bull. Don't waste you time trying to get one.
I went to the TW center mentioned, and they had no knowledge of such kits. I later called, and they checked around and found this information to be patently false.
Grande is rad.
I don't know how a TW spokesperson could be so falt out wrong but they aren't giving antennas away, they are giving svideo and audio cables for connecting to a pc away. That is a HUGE difference.
I called TW and complained. They offered to give me the HD Tier free for a month. Its only worth about $10 and still won't give me The Office or SNL or Sunday Night Football, but its something.
I think TW is using an angry customer base as leverage against KXAN, which is ridiculous. I just want my NBC programming. Give it to me from another NBC affiliate while TimeWarner and LIN/KXAN negotiate. I appreciate TW for "standing up for the customer" but am disappointed they can't find a better alternative. Rabbit ears (that won't work with my DVR), delayed broadcasts on other channels, and watching shows online are all unsatisfactory remedies in my opinion.
@scim, @MrMichael,
I misspoke, and my apologies for the inconvenience. We are doing antenna giveaways in some divisions, and I confused Austin for one of our other divisions affected by the LIN-TV standoff. Please accept my apologies here, I certainly didn't mean to mislead anyone. I'm dropping Allen Chen a note now to see about correcting this.
We do have an instructional video up that will show affected customers how to stream NBC's free programming directly from the website to their computers:
http://www.youtube.com/watch?v=nLeKft9Tb2s
Again, my apologies.
--Jeff Simmermon, Director of Digital Communications, Time Warner Cable
I believe that Buffalo was one market where TWC was definitely giving out antennas, but I think they have at least temporarily ran out.
Full Disclosure: I am one of the XXX local people that KXAN employs here in Austin and while I am not involved in the negotiations, I have taken a very personal interest in making sure that Austinites know the facts.
As you can imagine, there is a lot of misinformation out there. Here's what people should know and understand:
1)These are complex negotiations that all broadcasters and cable companies go through. Most deals are negotiated behind the scenes and you don't even hear about them. KXAN is not the only TV station asking for fair market value, as many people believe. In fact, all broadcasters are asking and nearly all cable companies, large and small, understand that they have to share subscriber fees with local TV stations, just as they do with cable networks. If you don't believe me check out KSAT-TV in San Antonio; they are going through the same thing with Time Warner. Time Warner is the only business that I can think of that charges its customers for a product or service they do not pay to receive. Time Warner wants you to believe we are greedy but isn't Time Warner the one who is greedy?
2) Time Warner's main argument is that we should be free. The local broadcast signal is FREE to folks with an antenna but there is no way it should be free to the 2nd largest cable company in the nation that makes a lot of money re-selling the programming of local broadcasters! My company invests heavily in our news, our programming and in our local community. Again - other cable companies recognize that and partner with us. When we partner, everyone wins. My company has trying for months now to partner with Time Warner.
3) I understand you're upset. I'm upset, too. I am also a Time Warner customer and I want to watch my favorite shows when I get home from work! I love 30 Rock! At least cable is no longer the only game in town and we now have choices.
4) I think Time Warner ought to be able to negotiate successfully with my company just like everybody else. What Time Warner charges its customers is completely within their control and there is no reason that subscribers' rates should increase. That's just a scare tactic they are using. I don't know about you but my rates go up anyway and Time Warner has no one to blame but themselves.
Finally, I want you to know that we think we provide a valuable product and we are proud of what we do every single day at KXAN Austin News.
Thank you for all the tremendous support and I look forward to a FAIR resolution.
Charlie Ray
Director of New Media
LIN Austin
kxan.com
@jeffTWC
Thanks for the correction. It's disappointing that the Austin market wasn't chosen for this particular type of remediation, but I'm happy to hear you are at least trying to correct the misinformation.
KXAN is a UHF station. LIN should be paying the cable company to carry its signal.
@CRay, again the argument boils down to what, exactly, you think TW is providing the customer. I believe the service they provide wrt KXAN is the delivery of the signal on a cable, obviating the need for an antenna, and the maintenance/service therein. KXAN deserves precisely zero of the revenues generated from that service as they paid precisely zero of the cost.
charlesv et al:
that free lake analogy? Let's take it one more step.
Imagine you've got a magical refilling lake that is free to drink from. Imagine the way you keep the lake clean is by setting up billboards all around the lake, and then charging people to advertise on your billboards. And the more people that drink from the lake, the more you can charge for the billboards.
Now, a company comes and pipes your water to another 300,000 people, and you manage to send the billboards along with the water to those extra 300,000 people. So now you can charge LOTS more for billboard space. So the company that pipes your water out to lots more people is making you lots more money.
It's like they're doing you a favor. Maybe YOU should be paying THEM!
Charlie,
While I am pleased you are correcting some of the misinformation out there, I have to agree with most when I say that this is hurting KXAN more than TWC. I love my NBC shows but do I think they should be paying LIN to carry this signal.... No. As stated on the Bucky and Bob radio show, where a representative from TWC and KXAN were live, it was LIN's choice to take the option of "must carry" when the FCC passed its ruling in 2001.
This brief history lesson hit home. The fact is, LIN went with the "must carry" instead of "retransmission" because their revenue was based on advertisement. With TWC and other providers carrying their advertising to the normal household meant more money in their pocket. Now that they have lost that advertising revenue, due to TWC and other providers winning over those contracts from customers, they want to change their mind.
To make up some of that revenue LIN would now like to charge TWC for doing the same service that TWC has been required by law to do under the "must carry" ruling of 2001.
How does LIN think KXAN and its programming became #1 in some of the timeslots? It was due to that ruling in 2001 that required Comcast and TWC (the two largest providers) to carry their signal to the household.
I hope that TWC holds out and gives LIN nothing. I know it will be negotiated and LIN will get something out of this but I do not believe that is deserved or earned. If I want to watch my shows I will either get an antenna, watch it on the computer or just simply live without it. Either way all the above options get you absolutely "ZERO DOLLARS" in your pocket.
I will however not rate KXAN or any other LIN station the next time I am called for a survey. We will see if you remain #1 in your timeslots. I realize you have no choice in the matter and apologize if this seems angry at you, but if you are going to state facts please give all the facts including the history of the facts.
csgrad96 - TWC customer
A couple of analogies: by Charlesv
I wish you did have a lake, so you could go jump in it.
say this magic lake of yours exist. If it were to be at all comparable to how Radio Frequencies work. (this is so retarded) NO ONE WOULD HAVE TO COME TO IT TO DRINK. The magic lake water would actually flow to all the people magically through the air and all the people would need to do is have a way to catch it.
I can not even continue to try and make sense of your flawed asinine analogy.
I am a former Satelite installer and cable guy.
I have even installed roof top TV antennas. Let me tell you that the picture quality from a roof top antenna (not indoor rabbit ears) is beutifull.
However if you happen to reside in a woody, hilly or rural area, you should not expect to get a decent picture. So cable or satelite is just a way for that signal to get to your home.
Why should anyperson have to pay for a free to air signal? If LIN is successfull in getting paid, rates will go up and customers will see another rate hike.
So TWC should be commended for not letting some asswipe company gouge its subscribers. If LIN\KXAN sets this presedence, what other traditionaly free channels will want this same treatment?
I dont see TWC as the greedy one at all. Free is Free and that is how much it is worth.