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The price that a consumer pays each month for a video package is driven largely by the costs that distributors like Time Warner Cable must pay to the companies that create or package the programming—the TV channels. That’s right–some cable customers are surprised to learn that the cable company pays a fee for every household who receives that package, regardless of whether anyone in that household even watches the channel. Learn more about how TV distributors put together video packages.
In the past, the fees paid by TV distributors to distribute cable networks (like ESPN, MTV, CNN, Fox Sports, etc.) were set in private business negotiations. Customers rarely knew those negotiations were taking place. And the fees rose higher and higher.
At the same time, local broadcast stations have also begun demanding significant fees to carry programming that they offer for free over-the-air and via the internet. We don’t think it’s fair to make cable customers pay for programming that others are receiving for free.
So in the past few years, Time Warner Cable, and other distributors, have taken a stand against unreasonable fee increases by both cable networks and local broadcast TV stations. We are pushing back against TV networks that demand more money without delivering more value.
Sometimes that results in a public dispute, with both sides using TV, and e-mail, and other communications vehicles to tell their side of the story. And customers are caught in the middle. Time Warner Cable customers need to know that we don’t like public disputes either. But we have a responsibility to make sure that our packages are delivering the best value, so sometimes we end up in a public dispute.
TV networks will often say something like, “But we’re only asking for pennies a day.” We know—and you know—that pennies can add up to paper fast.
From the example above, you can see what would happen to an average customers’ monthly bill if we just went ahead and paid every channel that asks “just a few pennies more.” To make sure we continue to deliver the best value possible, we look closely at every single channel on our lineup every time our contracts are being renewed—not only at the cost, but also viewership of the channel, whether it offers unique content, and a whole host of other factors.
What about buying channels individually, or a la carte? Learn more here.