March 19, 2010
Why We Should Care About Retrans Part II: Battles for the TV Audience

This is the second installment in a series on TV retransmission fees. The introduction ran yesterday. In brief Disney, WABC's parent company demanded a per-subscriber retransmission fee from New York area cable provider, Cablevision. Cablevision thought the fee was too much. A messy public battle ensued and WABC disappeared from Cablevision at midnight on Sunday, March 7, night before the Oscars. If you want to learn more about retrans in general, check out this great article from Broadcasting & Cable.

WABC and Cablevision had already been engaged in a nasty fight to win the hearts and minds of Cablevision subscribers before WABC went black at midnight on March 7. ABC and Cablevision each ran a series of ads blasting the other. Check out the two ads below. Both are propaganda its best and most manipulative, but they each present a very different picture of why audiences should care about TV and the retrans battle.

Here's Cablevision's commercial:

Here's WABC's commercial:

So which is more effective?

Cablevision's ad appeals to a populist sense of right and wrong. It paints ABC as a greedy company that's "losing millions" and needs retrans fees to keep paying "high salaries to senior executives" and "prop up struggling theme parks." Cablevision argues that they already pay a lot to Disney, WABC's parent company and that WABC is being greedy to ask for more. The bottom line is that Cablevision doesn't understand its subscribers. Watching this ad, I took away the following points about Cablevision's side of the retrans argument:

  1. Cablevison is a dumb pipe that becomes a helpless victim without content.
    The Cablevision ad makes it clear that ABC is being unfair to Cablevision. But who has sympathy for Cablevision? Cable providers are not our friends. Most cable company customer service is second only to the DMV for wait times and ineptitude (no offense, Patty and Selma). Honestly, I don't have much sympathy for the networks either, though they do provide entertainment. At the end of the day both Cablevision and ABC Disney just seem like huge, faceless corporations. There's no David in this David-Goliath scenario that Cablevision is trying to create.

  2. Cablevision expects customers to care about its financial situation.
    Again, viewers don't care about Cablevision because it's a huge corporation-- not a mom and pop store getting screwed when Wal-Mart moves in. Further, it's hard to care about the finances of a company that takes a lot of money from people every month. Cable subscribers pay a monthly bill to cable providers, not to individual networks carried by providers. Bills are rarely the same month to month because of cryptic fees, licenses, and pay-per-use services. Chances are, most Cablevision subscribers wouldn't notice a fifty or sixty cent increase in their monthly bill were Cablevision to pass WABC's retrans fee on to its customers.

  3. Broadcast TV should be free. Retrans fees are like a tax on TV.
    Again, these populist arguments are raised to elicit sympathy for a faceless corporation. If retrans fees are a tax on TV, they're a corporate tax on cable providers that the consumer will never directly see.

ABC's approach takes a different tactic that shows a better understanding of the TV audience. ABC's tactics were smart for a few reasons:

  1. ABC understands why people watch TV.
    ABC's ad shows fun clips from its most popular shows. The message here is clear: people like TV and Cablevision is going to take TV away. The ad even plays the omg-don't-make-me-imagine-life-without-Oprah card.
  2. ABC understands that people don't care about corporations.
    ABC's ad emphasizes programming and makes no mention of what retrans is or why negotiations with Cablevision stalled. The ad just paints Cablevision as the villain and leaves it at that.
  3. ABC's call-to-action threatens Cablevision directly.
    There is a call to action at the end of ABC's ad, but unlike Cablevision's call to action, it doesn't ask people to contact Cablevision and tell them to keep carrying ABC: instead, it tells customers to visit a website and find out how to change their cable service. This is clearly more threatening to Cablevision's business model. Of course, Cablevision can't make this kind of argument because it operates in a commoditized market. How could Cablevision ask its paying subscribers to stop watching ABC when those subscribers could easily give their money to another provider and still get all their favorite shows?

Obviously, I think ABC's advertising and PR came out ahead here, but it didn't have to be that way. Each side could have made the one argument that matters: the other side wants to take away the shows you love.

Networks have historically had a better understanding of how to make audiences care about retrans and carriage fees--by using overt propaganda tactics that make no mention of fees. The ad below (of a crying Dora the Explorer) ran in late 2008 when Time Warner Cable was engaged in heated carriage negotiations with Viacom.


This print ad ran in late 2009 when Fox and Time Warner Cable were in another battle over retrans fees:


Cable operators have to get smarter about audiences if they expect to win retrans battles. The networks have the upper hand in dealing with the public because they can leverage the value of their content. Cable operators should appeal to the public (at least as a defensive measure), but they need to understand that people can't be made to feel sympathy for cable companies.

But is appealing to the audience the best strategy for cable operators? Probably not. Cable companies have a better chance to get a fair shake in retrans if they fight against the carriage laws that created this mess in the first place. They have begun to fight, but how effective has it been? We'll get to that in an upcoming installment. In the meantime, let me know what you think in the comments or tweet @shelila.