If you have been watching any television at all for the last few weeks, you have most likely been inundated by the media blitz spawned by the FOX NETWORKS GROUP. They are raising awareness within the viewing public that DISH NETWORK has discontinued carrying some of their stations as of Oct 1, 2010 and will most likely drop the balance of the stations on Nov 1, 2010. FOX has created a web site called GETWHATIPAIDFOR.COM in order to provide the public with details from their perspective regarding what the problems are and how the public can get involved.
This is not the first time this type of thing has happened nor will it be the last. It is not a problem with FOX or DISH. It is a problem with the Cable Television Business Model and it affects all of the cable services providers, the stations that are carried by those providers, but ultimately it is the consumer that pays the price in higher fees and programming disruptions.
It happened back in March ’09 when Comcast held Portland Basketball Fans hostage by raising the rates of games being broadcast to all carriers, and just days later when Comcast pulled MSNBC from the Portland lineup. These are just a few examples, but as you can see it is nothing new and the occurrences are getting more frequent and having a larger impact on the general public.
The Federal Communications Commission is the regulating body for the television, telephone, radio, and other related industries. They make and enforce the rules and are supposed to look after the public’s best interests. If you have any problems with your cable or satellite company and can’t get any satisfaction, then these are the guys you need to go to.
Just a little over a year ago, we proposed our vision of how the cable TV industry SHOULD operate if the best interest of the public were of primary concern. Let me reiterate the key points so that everyone {including our friends at the FCC} can comment:
- Cable/Satellite TV companies SHOULD NOT be providing content, or getting into the telephone business, or Internet business, or any other business. If they do they are creating a conflict of interest and detracting resources from their primary product. If they want to get into other things, than spin off a new company rather than have CATV subscribers finance your ventures and receive sub-standard services while doing so.
- If their mission can be narrowed down to nothing more than transporting 3rd party stations to households, then they can be treated the same as a public utility companies and regulated by those governing bodies. Put metered usage in place and mandate an ‘a la carte’ option for customers. This will stop the speculation regarding what a channels worth is in terms of viewership.
- Most importantly, CHANGE THE REVENUE STREAM. The current business model has the consumer paying the cable company and the cable company paying the content providers and the advertisers paying the content providers. This is insanity! It is the reason for cable companies dropping channels that demand price increases, and the reason that there are so many GARBAGE CHANNELS in a typical lineup that never get watched. Here are some simple changes that are in the best interest of the public:
- Content providers should be paying the cable companies to carry them based upon bandwidth consumption…not the other way around. Bandwidth is a commodity and rates should be on a flat schedule based on usage regardless of the perceived value of the content;
- Commercial channels (ones that have revenue generating advertisements) should be provided free of charge to cable customer;
- Premium channels (no advertisements) should be made available to cable customers on an ‘a la carte’ basis so that the market can determine what the true value is of any channel.
I can go on & on (and I will, I promise), but I think you get my drift. In the mean time, let’s get back to the matter at hand. I have extracted the Q&A section from the GETWHATIPAIDFOR.COM site so I can give you my standard ‘smart-ass’ diatribe.
[Supposed] FACTS ABOUT FOX’S NEGOTIATIONS WITH DISH
Myth: Fox is seeking a 50 percent increase in programming fees for FX, National Geographic Channel, and our 19 regional sports networks. [Keep in mind as you read on that these are all CABLE STATIONS mentioned here, not their broadcast channels that are available over the air. FOX will be arguing the point for BROADCAST STATIONS later in an attempt to confuse the issues]
Fact: We are not seeking a 50 percent increase [great, so why not tell us what the actual increase is that you are seeking? 49.99% ???] for FX, National Geographic Channel, and our 19 regional sports networks. And we are not asking you for any more money. [Of course you're not...BECAUSE YOU HAVE NO BUSINESS RELATIONSHIP WITH THE PUBLIC!!! You must think we are all stupid if you are going to put a statement like that in there and think you wont get called out on it] We are simply asking DISH to compensate us fairly out of their massive profits for Fox’s entertainment and sports programming services they sell to their subscribers. [...and FOX will define what is 'fair', right?] We have made what we believe are fair and reasonable proposals to DISH – ones that are consistent with our agreements with the hundreds of other cable and satellite companies with whom DISH competes for your business. To date, DISH has not responded with a proposal that is reasonable by comparison to the hundreds of other deals we have in place for these same channels. [And the bottom line is that the public ends up suffering]
Myth: If programmers did not ask for fair compensation for their television networks, consumers’ rates for cable and satellite services would be lower.
Fact: TV Providers have been raising rates on consumers for years and consumers have been paying for broadcast programming that is available free over the air. [That was when everything was analog and cable/satellite reception was better than over-the-air, but now that everything is DIGITAL more and more people have discovered that they get BETTER quality from FREE OVER-THE-AIR TV and have CUT-THE-CABLE] In good economic times, rates have gone up. In the recent recession, rates have still gone up. Even if Fox does not receive fair compensation for its content, it is entirely likely that your bill will still go up. [But basically what you call a Myth is really TRUE because if cable companies didn't have to pay for programming, then there's no way that they could justify charging more than 20% of their current rates]
Myth: If TV Providers like DISH Network pay fair value for the programming provided by broadcasters and other content providers, it will “force” them to raise fees for consumers.
Fact: DISH Network is a successful, profitable business (thanks in part to the money they already charge subscribers for free, over-the-air broadcast programming). It can surely afford to fairly compensate broadcasters for that content without raising rates. Just how profitable is DISH Network? [Once again the so-called Myth is a FACT because if ANY cost increases are not passed on to the consumers, then it necessarily has to come out of their profit margin. The corporate executives responsible for that decision would have to answer to angry stockholders. The only way around this BUSINESS FACT is Regulation]
DISH Network may advertise itself as a low price provider, but that still hasn’t stopped them from posting exceedingly high profits. As of August 2010, DISH Network is on pace to profit nearly $2 billion for the year or more than 40 percent more than they did in 2009. From January-June 2010, DISH Network generated more than $6 billion in revenue from subscribers and is on track to significantly improve on the $11.5 billion it earned from subscribers in 2009. In the second quarter of 2010, DISH Network received nearly 50 percent more in revenue from each subscriber than each such subscriber actually costs the operator. Overall in the most recent quarter, DISH Network posted a very healthy 25 percent profit margin. [Unfortunately, FOX does not publish these same numbers for themselves to show us what 'reasonable' numbers look like in comparison. If you think these DISH number look high, then have a look at these COMCAST Revenue and Profit figures!!!]
Myth: The compensation programmers like FOX are seeking is “exorbitant” and “unreasonable.” [ABSOLUTELY! Why is FOX any different than ABC, NBC, and CBS who can transmit their programming to the public over the air. You get advertising dollars too, don't you?]
Fact: The compensation FOX is seeking for the FOX stations is entirely reasonable. Based on the comparable cost of programming, the Fox stations could charge $4-5 per subscriber per month [Hold the phone! Did I just read that correctly? FOX thinks that the average household is willing to pay $4 to $5 per month for their programming? Once again, what makes them think they are so much better than ABC, CBS, and NBC that I would be willing to pay $50 to $60 per year for their programs? YOU GUYS ARE SMOKING CRACK!], but we are asking for just a fraction of that. ESPN receives $4-5 per subscriber [that's to F$%^&ing HIGH!] and TNT gets $1 per subscriber [and if you don't have a DVR to filter through all of their advertising then you are missing 1/2 of your life], but spends about 80% less on programming than FOX [Whos fault is it that you are spending that much on programming?]. And if one looks at the ratings [otherwise known as BOGUS JACKED UP NUMBERS] FOX and its stations get relative to cable networks, the value would actually be closer to $10 per subscriber. [Dude! You have to back off of the CRACK...PRONTO!] Moreover, FOX attracts more viewers than the five most expensive cable networks combined (ESPN, TNT, USA, ESPN2 and NFL Net). The bottom line is that the Fox stations feature some of the nation’s most-watched programming with shows such as American Idol, House, Glee, and The Simpsons, as well as the most compelling sports on television with the National Football League, Major League Baseball, and NASCAR. The price FOX is asking for as compensation for all this value is extremely reasonable.[...NOT, and BTW neither are the others you are using for comparison. Wait, just one question...if you get the increases you are asking for does that mean that you can afford to pay PAULA ABDUL to come back on American Idol?]
Myth: Broadcasters like FOX are already receiving fair compensation for their programming. [Wrong again CRACK-HEAD. And if you think it is a myth then charge more for advertising instead of trying to charge cable/satellite companies (which you know full well will be passed on to the consumer if it happens). You and all of the other stations that get money from the carriers have done nothing more than INFLATE THE MARKETPLACE]
Fact: The broadcast television business is suffering because broadcast networks are competing on an uneven playing field with cable networks. Cable networks have two streams of revenue: advertising and fees paid by distributors. Broadcasters like FOX have the single stream of advertising, and TV providers have been charging subscribers for free, over-the-air broadcast programming. [and only regulation will put an end to that, or customers getting wise to the fact that DIGITAL Over-The-Air TV is better than cable or satellite] This has allowed cable networks like ESPN to get a leg up to purchase the rights to content like Monday Night Football and The BCS Championship Series – which means that tens of millions of Americans who can’t afford or choose not to subscribe to cable or satellite miss this event programming. [But if regulations were put in place to prevent premium channels from taking advertising revenue, then the playing field would be even again] The future of free, over-the-air broadcast programming requires broadcasters to compete on a level playing field – which means getting fair compensation from companies like DISH Network. [If customers want your broadcast channels they will hook up an antenna to their TV. Now LAY OFF THE CRACK, and get on board with our proposed changes that would level the playing field for all networks (broadcast & cable) AND substantially reduce prices for the consumers at the same time]