The four day long CBS stations shutdown in three main cities will end as per the order of Glenn Britt, CEO of
(NYSE:TWC). Britt says that CBS Corporation (NYSE:CBS) will be allowed by cable operators’ “a la carte”, stations’ signal that can be sold irectly to consumers instead of patching other channels with it. According to Britt’s letter to Leslli Moonves, CEO CBS, cable Time Warner Cable will let customers decide the value they attach to CBS and its programs.
Due to a payment dispute with CBS, Time Warner blocked CBS signals in Dallas, Los Angeles and New York; the shutdown stated on Friday. According to Britt’s letter, he wants to end the argument of television being sold in different packages, which can have more than 100 channels that aren’t actually watched by all the customers. An analyst at Moffett Research LLC says that CBS will not acknowledge this stipulation. Moffett says that CBS will not accept a model that allows the customers the freedom to pay or not pay to watch CBS. The analyst says that the current structure where customers have to pay the fee whether they want to watch a certain CBS channel or not works well for the TV station.
According to SNL kagan a research firm, CBS and other similar TV stations are happy making profits from the fee that the cable operators have to pay. The cable operators say that if this fee is charged then they have to increase their rates, which ultimately hurts their customers or subscribers who will have to pay higher monthly bills.
Maureen Huff, a representative of Time Warner Cables said that subscribers understand the fact that changing their service provider is not the solution, because this issue concerns all cable operators when it comes to CBS channels. Martin along with some other industry observes says that online streaming cannot replace CBS program offers, such as live sports programs like golf.
CBS even blocked video on the network’s apps and its website for customers who subscribe to Time Warner Cable for their internet connection. This step by CBS focused only on those customers who availed its TV packages while ignoring a huge number of subscribers who watch CBS programs online. According to Moffett, Time Warner Cable might prolong this dispute with CBS.
The shares of Time Warner Cable shares went down by .5% ($116.42) at 68 cents a share. CBS shares also went down by a little over than 1% ($53.86) at 67 cents a share.