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Summary:

Here we go again: Time Warner Cable has resurrected its “Roll Over or Get Tough” marketing campaign in advance of an upcoming carriage fight with Disney and ABC. With a deadline of Sept. 1 to finish a deal, the early relaunch suggests negotiations could get messy.

roll over or get tough

Here we go again: Time Warner Cable has resurrected its “Roll Over or Get Tough” marketing campaign, this time in preparation for an upcoming carriage fight with Disney and ABC.

“Roll Over or Get Tough” was first launched last winter, in the midst of Time Warner Cable’s retransmission standoff with Fox. But the marketing campaign, which is designed to educate consumers about where their cable dollars go (and perhaps to elicit sympathy from subscribers over Time Warner Cable’s “meager” profit margins), was re-launched before the MSO enters a new round of negotiations with Disney.

Most carriage agreement negotiations go down to the wire before cable companies and distributors launch campaigns to stir public support for their position, but Time Warner Cable is trying to appeal to the public early. It has until September 1 in its negotiations to keep ESPN, some ABC stations and other Disney cable networks on its cable systems. The early start to its public campaign suggests this negotiations process could get particularly messy.

According to the website, 40 percent of Time Warner Cable’s revenue goes to programmers for the ability to distribute their networks to its subscribers. But those programmers are increasingly asking for more money for the rights to carry their channels, sometimes demanding a 300 percent increase for those rights.

When all is said and done, Time Warner Cable earned a profit for its shareholders of about $0.06 for every dollar that we brought in during 2009. (That’s slightly below the average of 7% for the past 10 years among US companies in the S&P 500, according to the Wall Street Journal.)

That might not sound like a lot, but the truth is that Time Warner Cable reported $3.3 billion in net income last year, while its subscription revenue increased 5 percent to $17.2 billion. And it’s not like Time Warner Cable will suffer from those increased programming fees itself, since in most cases, cable companies pass the programming rate increases on to their customers.

In addition to relaunching RollOverorGetTough, Time Warner Cable also helped establish the American Television Alliance (ATVA), a coalition of cable distributors, programmers, and public interest groups that Time Warner Cable says was formed to “ensure television viewers are no longer treated as bargaining chips by broadcasters when they come to the table to renew their carriage deals.” ATVA members include distributors like AT&T, Cablevision, DirecTV, Dish Network and Verizon, trade groups such as American Cable Association, public interest and consumer groups like New America Foundation and Public Knowledge, and independent programmers such as The Africa Channel, Si! TV and Discovery Channel.

Related content on GigaOM Pro: ESPN Leads the Way Over the Top, But Will Others Follow? (subscription required)

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  1. Hi Ryan, good article. Minor nibble: not sure if it’s exactly the right connotation to label Discovery Channel as an “independent” along the likes of the smaller channels (Si! TV / The Africa Channel) that you mentioned. Discovery Communications is a giant in the programming space: http://corporate.discovery.com/our-company/overview/

    However, I do think there is value in trying to make a distinction between programmers which hold more bargaining chips (by having ownership in free-to-air broadcast networks and/or their local affiliates) such as NBCU, Disney/ABC, and Fox, versus programmers which do not.

  2. SportsFan!! Monday, July 19, 2010

    As long as SportsCenter is on in the fall for football, Ill be happy.

  3. Seriously.. just give me Sportscenter.

  4. TWC: Fee Fights Everyone’s Problem, Need Intervention: Video « Wednesday, October 13, 2010

    [...] retrans fights. During its negotiations with Fox late last year and Disney earlier this year, it launched an online marketing campaign asking subscribers whether it should Roll Over or Get Tough against cable programmers. With that [...]

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