Entertainment Industry

Category: Time Warner Cable

Cable industry's Jim Dolan wears many hats

Jim Dolan's MSG is in a fight with Time Warner Cable

Jim Dolan dons many hats.

As chief executive of cable operator Cablevision Systems Corp., part of his job is to be the tough guy. He rails against yielding channel space to networks that have tiny audiences because extra channels raise the bills for his customers.

That was the case last year when he fought unsuccessfully against carrying some low-rated cable and broadcast channels owned by News Corp. in return for getting access to the Fox network.

However, when Dolan is wearing his hat as chairman of Madison Square Garden Co., the opposite is true. His job is to get little-watched cable channels distributed.

Madison Square Garden Co., parent of popular New York-based cable sports channels MSG and MSG+ -- home to the New York Knicks and Rangers -- wants Time Warner Cable to put its low-rated music network Fuse back on its systems. 

Time Warner Cable, which has systems serving most of the city of New York, is trying to negotiate a new deal to carry the MSG channels but no longer wants Fuse, which it dropped last week.

Fuse was watched by "fewer than one-tenth of 1% of the customers who have it available," or just 4,000 of the cable company's 7.4 million subscribers that get the network, Time Warner Cable said in a statement. 

Time Warner Cable has indicated it is willing to pay more to carry the MSG networks and would accept a 6.5% increase in fees for the channels. That was rejected, Time Warner Cable said, and now Madison Square Garden is asking for a 53% bump in price to carry only the MSG networks.

"Programming costs are skyrocketing, and we work very hard to negotiate lower fee increases to keep our customers’ bills as reasonable as possible. Fifty-three percent is not reasonable in anybody’s book –- I doubt many of our customers got a 53% raise this year," said Mike Angus, Time Warner Cable's senior vice president of content acquisition.

According to SNL Kagan, an industry consulting firm, the two MSG channels cost a combined $5.00 per subscriber per month. Time Warner Cable also paid about 8 cents per month per subscriber for Fuse, a figure that one former executive at the channel said was twice as much as what other distributors pay. Time Warner Cable declined to comment on what it pays for Fuse.

The contract between Time Warner Cable and Madison Square Garden for the MSG channels is up at the end of the year. Time Warner Cable has said it won't pull the MSG channels from its systems.

"We have been attempting to negotiate a new agreement with Time Warner Cable for close to two years, and are simply asking them to pay fair and reasonable rates that are consistent with what other providers pay for our programming –- nothing more,” said Michael Bair, president of MSG Media.

“Unfortunately, Time Warner Cable is not interested in reaching a fair agreement, and, in fact, is not interested in conducting productive negotiations on behalf of its customers," added Bair.

 Dolan, who became CEO after his father and company founder Chuck Dolan stepped back, also has a third hat -- that of a blues singer. He has his own band -- JD and the Straight Shot. Unfortunately, he's not singing Time Warner Cable's tune.

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-- Joe Flint

Photo: Jim Dolan. Credit: Jeff Christensen / Associated Press

Time Warner Cable and HBO make deal for HBO Go

HBO shows such as True Blood can be seen on iPads

Time Warner Cable subscribers will now be able to watch HBO on their iPads and computers.

After several months of negotiations, the cable giant -- which has 12 million subscribers, including 2 million in Southern California -- has finally reached a deal with HBO to carry its new HBO Go, a service that allows the pay channel's subscribers access to its content on multiple platforms both inside and outside the home.

While HBO Go does not offer a live streaming version of HBO, the network's new and old programs will be available on the service at the same time they are on TV.

HBO already has signed deals with most other multichannel video program distributors, or MVPD, including Comcast Corp., but Time Warner Cable's agreement with HBO Go took much longer to complete. Among Time Warner Cable's various concerns was that HBO Go could ultimately end up being offered to consumers directly without their having to subscribe to an MVPD.

In a joint press release, the companies said Time Warner Cable subscribers who pay for HBO "will have free, unlimited access to the corresponding online services at any time, on any computer in the U.S. with a high-speed Internet connection, as well as a host of other devices, including the iPad."

The only remaining major hold-out for HBO Go is Cablevision Systems, the New York-based cable operator with more than 3 million subscribers.

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-- Joe Flint

Photo: HBO's "True Blood." Credit: HBO

Fox speaks out about Time Warner Cable and Dodgers

FOX DODGERS TIME WARNER CABLE

You can tell a fight is getting ugly when the companies involved stop hiding behind anonymous quotes and come right out and say what's on their minds -- on the record.

That's what is starting to happen with Fox Sports and Time Warner Cable in their battle to see who will end up with the television rights for the Los Angeles Dodgers. Fox's Prime Ticket currently has the Dodgers, and Time Warner Cable wants them for its new regional sports network, which is launching next year.

Under scrutiny is a 2004 contract Fox Sports signed with the Dodgers to carry the baseball team's games on its Prime Ticket cable channel. The contract contains a provision that prohibits the team from creating its own channel in partnership with Time Warner, Comcast or Walt Disney Co.'s ESPN should it decide to discontinue its relationship with Fox Sports when the current pact expires.

The deal under the current contract, which runs to 2013, will peak at a value of nearly $40 million a year. A new deal could double that annual figure.

At the time the contract was signed, Time Warner Cable was still part of the entertainment giant Time Warner Inc. In 2009, it was spun off into a stand-alone company and does not feel that the 2004 provision applies to it and its regional sports network (RSN).

Fox, part of News Corp., begs to differ and is now speaking publicly about it.

“The contract, which was written in 2004, states the Dodgers are restricted in partnering with 'Time Warner' in an RSN and both sides have always, up to today, acted consistently with the understanding of the meaning that Time Warner Cable is restricted from making a media rights deal with the Dodgers," Fox Sports spokesman Chris Bellitti said.

The subject of the contract came up in a hearing Thursday in U.S. Bankruptcy Court in Delaware, where Fox lost a fight to stop the Dodgers from selling a new TV deal along with the team. A Dodger lawyer suggested that the team was able to strike a deal with anyone it pleased, which Fox is still disputing.

"For their lawyer to indicate otherwise is revisionist history designed to mislead prospective buyers into thinking the Dodgers are unfettered in making a media rights deal with whomever they choose,” Bellitti said.

While Fox is charging the mound, Time Warner Cable is still staying in the dugout. For now.

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Contract provision is key in fight between Time Warner Cable, Dodgers and Fox Sports

-- Joe Flint

Photo: The Dodgers' Matt Kemp hits one out. Credit: Michael Robinson Chavez / Los Angeles Times

Contract provision is key in Dodgers-Fox-Time Warner Cable fight

Dodgers
The outcome of the fight among Time Warner Cable, Fox Sports and the Los Angeles Dodgers over a new TV deal for the baseball franchise may hinge on a legal interpretation of a key provision in the current contract between Fox Sports and the team.

When News Corp.'s Fox Sports signed an agreement to carry Dodger games on its Prime Ticket regional sports network in 2004, it included a clause that prohibited the team from creating its own channel in partnership with Time Warner, Comcast Corp. or Walt Disney Co.'s ESPN.

Now Time Warner Cable is trying to land the Dodgers for its new regional sports network and Fox is crying foul.

Here's the rub: When Fox signed its deal with the Dodgers in 2004, Time Warner Cable was a unit of Time Warner Inc. Five years later, Time Warner Cable was spun off from Time Warner, becoming its own publicly traded company.

It appears that Fox's contract with the Dodgers was not amended to reflect that Time Warner Cable is now a separate entity, said people familiar with the agreement who declined to speak publicly about the ongoing legal issue.

Time Warner Cable probably will make the case that the provision does not apply because it is a separate company from Time Warner. Fox probably will counter that the intent of the contract is clear and that there is no loophole for Time Warner Cable to exploit.

The Dodgers are currently squaring off in U.S. Bankruptcy Court in Delaware against Fox. At issue is whether the team, which is currently in bankruptcy and for sale, can opt out of its pact and negotiate a new and more lucrative agreement with someone else.

Ultimately, the new owner of the Dodgers will have the final say on future TV deals.

There are two potential outcomes to the provision kerfuffle: Either a court will decide whether Fox or Time Warner Cable is right about the provision, or Fox will get a settlement from the Dodgers or Time Warner Cable.

Either way, the lawyers will clean up as usual.

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-- Joe Flint

Photo: Dodger pitcher Clayton Kershaw. Credit: Harry How / Getty Images

Time Warner Cable and Comcast make push into home security

Time Warner Cable is offering home security

Would you trust the cable company to guard your family jewels and good silver.

Time Warner Cable and Comcast sure hope so. The two cable giants are making an aggressive push to get into the home security business.

The move comes at a time when cable companies are having a harder time holding onto subscribers. A tough economy and the emergence of new competitors means cable operators have to find new ways to keep subscribers plugged in.

"The industry is increasingly looking to squeeze more juice out of their relationship with the customer," said Rich Greenfield, a media analyst with financial services firm BTIG.

The domestic electronic security industry generates $33.25 billion annually, according to the Gold Book, a publication produced by Security Sales & Integration magazine. About 1 in 5 homes nationwide has some sort of monitored security system, said Don Boerema, chief marketing officer of ADT, the industry leader in home security with 6 million customers, or 26% of the market.

Cable companies already have a pipeline to a customer base. New wireless technology has made entry into the home-security business fairly inexpensive for them.

"All of our research said it was a good business to go after," said Keith Burkley, Time Warner Cable's senior vice president responsible for the company's Intelligent Home security system. "The market is 20% penetrated, and we really believe it is going to grow to over 30%."

For more on how the cable companies want to become watchdogs, see the story in Tuesday's Los Angeles Times.

-- Joe Flint

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Photo: Time Warner Cable field technician Salvador Gonzalez installs a home security sign at a Hacienda Heights home. Credit: Allen J. Schaben/Los Angeles Times.

Verizon Wireless in $3.6-billion spectrum deal with cable giants

Verizonwirelessstory
Verizon Wireless has struck a deal to buy licenses for wireless communications spectrum from SpectrumCo, a joint venture owned by Comcast Corp., Time Warner Cable and Bright House Networks, for $3.6 billion.

The deal, announced Friday morning, is for wireless spectrum that has the potential to reach about 259 million people, and will require approval from government regulators. It is seen as a sign that the cable companies are not eager to spend billions of dollars on their own on a wireless strategy.

"This sale of spectrum is an important step toward ensuring that the needs and desires of consumers for additional mobile services will not be thwarted by the current spectrum shortage," the companies said in a statement.

Miller Tabak & Co. analyst David C. Joyce said the sale is evidence that the "cable industry tacitly acknowledges that they cannot do wireless on their own." 

As part of the deal, the parent companies of SpectrumCo and Verizon Wireless agreed to sell each others' products. Also, the companies have formed a venture to develop new technology for wireless communications.

"Spectrum is the raw material on which wireless networks are built, and buying the [Advanced Wireless Services] spectrum now solidifies our network leadership into the future, and will enable us to bring even better 4G LTE products and services to our customers," said Verizon Wireless President Dan Mead.

Comcast, the biggest stakeholder in SpectrumCo, will take in $2.3 billion from the sale. Time Warner Cable will get $1.1 billion, and Bright House will receive $189 million.

-- Joe Flint

 Photo: Verizon Wireless sign. Credit: Seth Wenig / Associated Press.

Time Warner Cable snags Galaxy rights

Time Warner Cable is putting the finishing touches on a deal to snag the television rights to the Los Angeles Galaxy away from Fox Sports West.

Landing the rights to the soccer team on its new sports cable channel didn't come cheap though. Time Warner Cable is paying $55 million over 10 years ($5.1 million per season) for the rights, according to a person familiar with the terms of the deal. Fox, which had been paying less than $500,000 per season, passed on its option to match that offer. The deal will take effect next season.

Time Warner Cable already landed the rights to the Los Angeles Lakers when it made a $3-billion bid for 20 years. The Lakers have been on Fox Sports West, but will move to the Time Warner Cable channel in 2013, assuming that there is labor peace by then.

Also on Time Warner Cable's wish list is the Dodgers, but Fox is going to fight hard to keep that franchise on its Prime Ticket network.

Time Warner Cable is launching both an English-language and Spanish-language and games will be on both networks.

A Time Warner Cable spokeswoman declined to comment.

For more on the deal, see our story on the Fabulous Forum blog.

-- Kevin Baxter and Joe Flint

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Warner Bros. delivers for Time Warner in third quarter

Time Warner Inc. said it had third-quarter profits of $822 million,  much of driven by "Harry Potter and the Deathly Hallows: Part 2."

Harry Potter went out with a bang.

Time Warner Inc. said Wednesday it had third-quarter profits of $822 million, a 57% increase compared with the same period a year ago, and revenues of $7.07 billion, a jump of 11%.

Much of the gains were driven by the strong box-office performance of "Harry Potter and the Deathly Hallows: Part 2." The last chapter of the long-running Warner Bros. franchise took in $1.3 billion around the world. For the quarter, Time Warner's filmed entertainment unit, which also includes television production, had revenues of $3.3 billion, up 17% from the third quarter of 2010. Operating income went from $209 million to $528 million.

But Time Warner Chief Executive Jeff Bewkes was quick to tell analysts that Warner Bros. was more than a one-man show.

"It wasn’t all about Harry at Warner Bros.," Bewkes told analysts during a conference call Wednesday morning. "Contagion" and "Horrible Bosses" were also strong performers for the studio, as was revenue from reruns of its hit sitcom "The Big Bang Theory."

Even though the current television season is not even two months old, Bewkes expressed confidence that Warner Bros.-produced new shows, including the sitcoms "Two Broke Girls" and "Suburgatory" and the drama "Persons of Interest," would be long-term moneymakers for the studio.

"Our syndication pipeline is built," Bewkes said, adding that a hit comedy is still the "holy grail" of the television business, with the potential to become "multibillion-dollar annuities."

Although Warner Bros. is on a roll, Time Warner's Turner Broadcasting is still going through some growing pains. Overall, Time Warner's networks group, which includes HBO, had revenues of $1.09 billion, an increase of about 6%. However, operating income fell 4% to $1.09 billion.

Although the new TNT original series "Falling Skies" was solid and "The Big Bang Theory" repeats are delivering for TBS, much of the other programming on the two networks is struggling.

"TBS and TNT ratings were softer than anticipated," said Time Warner Chief Financial Officer John Martin.

Bewkes also hinted that Turner Broadcasting would be willing to kick the tires of the NFL, which has talked about introducing a new eight-game package. However, he stressed that he would only buy NFL rights if the company could make money on it, saying he wasn't interested in a loss-leader.

Bewkes also took a little shot at Time Warner Cable, the nation's second-largest cable operator, which was spun off from Time Warner a little over two years ago. During its recent earnings call, Time Warner Cable suggested that growth prospects for the premium channel sector, which includes HBO, was slowing.

That, Bewkes said, was "kind of a backward-looking statement they made."

Bewkes has been frustrated with Time Warner Cable for not launching a new HBO service that allows subscribers to watch the channel on their iPads. Cablevision, another large cable operator, is also yet to sign a deal for the service, which is called HBO Go.

Although Bewkes did not call out either cable operator by name, he said he was "hopeful for their sake" that HBO Go would be available to their subscribers in the next few months.

-- Joe Flint

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Photo: Daniel Radcliffe in "Harry Potter and the Deathly Hallows: Part 2." Credit: Warner Bros.

Time Warner Cable offers first-class package

Worried that the Porsche in your driveway and the new swimming pool aren't enough to make your neighbors jealous? Now you can out-cable them too!

That's right, Time Warner Cable is offering a new service in Southern California that seems tailor-made for folks who like to pamper themselves and perhaps feel a little superior to everyone else.

It's called "Signature Home" and with it comes "personal solutions advisors" and "connection specialists" available at your beck and call. Think of it as first class for cable.

"It's more than cable, it's a lifestyle," gushes a press release from the cable giant announcing its latest package. Starting at $199.99 a month, subscribers can get more than 180 channels, 50 megabits per second of high-speed Internet, an iPad app, a digital phone and "white-glove customer service." You also get a DVR that can record up to four channels at once, which is perfect for Sunday night when you can't decide between football, "The Good Wife," "Desperate Housewives " or "Boardwalk Empire."

That white-glove service includes your own cable concierge. The personal solution advisors (I think that's what we used to call customer service reps) are available around the clock. They will make sure that a connections specialist (what we used to call a repairman) is ready to race to your home should the slightest bit of snow show up in your picture.

Don't worry about some cable guy wearing dirty work boots messing up your white carpet either. The Signature Home technicians come equipped with shoe booties. After all, per Time Warner Cable, "Signature Home is all about a heightened experience both through technology and customer interface."

So forget about buying that new car to make the rest of your block envious, just get Time Warner Cable's Signature Home package and become the envy of everyone except those who get the NFL Network, which Time Warner Cable doesn't carry. They may still laugh at you.

-- Joe Flint

 

Time Warner Cable and DirecTV team up to lobby FCC

Rival distributors Time Warner Cable and satellite broadcaster DirecTV teamed up to make their case to the Federal Communications Commission for an overhaul the agency's so-called retransmission consent rules.

According to an FCC filing, DirecTV Chief Executive Mike White and Time Warner Cable head Glenn Britt met with FCC Commissioners Michael Copps and Robert McDowell on Wednesday to discuss the tensions that have arisen over the last few years between broadcasters and multichannel video program distributor over fees broadcasters want in return for carriage of their programming. 

"We explained that the retransmission consent fees demanded by broadcast stations continue to skyrocket and that the outdated regulatory regime, which prevents true marketplace negotiations, results in harm to consumers," wrote Cristina Pauze, Time Warner Cable's vice president of regulatory affairs in a disclosure letter.

There have been several examples of heated negotiations between broadcasters and cable operators over distribution deals. The FCC has already launched a review of its rules regarding retransmission consent to see if they need updating to limit the possibility of signals going off the air because the two sides are unable to reach an agreement.

Time Warner and DirecTV also said they told the commission it should require "the unbundling of broadcast and cable programming channels." That refers to companies that own broadcast and cable networks packaging said channels together rather than selling them on an individual basis. News Corp., parent of the Fox network as well as several cable networks, typically tries to bundle its channels together when negotiating with a cable or satellite operator. The advantage to bundling is that a weaker channel can get distribution it might not otherwise get because it is packaged with a stronger one.

Distributors such as Time Warner Cable and DirecTV argue that such bundling ends up saddling the consumer with higher bills and channels they don't want. Several companies that don't own broadcast stations, such as Viacom and Time Warner Inc., also try to bundle their channels.

-- Joe Flint

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