Ops to lop Web crop
Say rising fees force cable cuts
Because cable networks keep raising their fees to cable distributors, cable ops will have no choice but to drop cable webs from their lineups, Matt Bond, exec VP, programming for Tele-Communications Inc., said Wednesday.
Bond, who made his comments here at a Western Cable Show panel discussion, said that just about all cable networks raise their license fees 10% to 15% each year, which is much more than the 5% cable ops raise their rates to subscribers. As a result, 25% of TCI's revenues now go to pay the cable webs they carry.
"We need to do a tree trimming," said Bond, referring to TCI's plans to prune overpriced and underperforming cable networks from its channel lineups. "We need to manage our programming lineups to maximize revenue."
Lynne Buening, VP of programming for Falcon Cable TV, said that while it is difficult to drop channels because of consumer backlash, her company has started to punt certain channels and will continue to do so.
Bond said that regional sports networks -- which can charge as much as $1.00 to $1.50 per subscriber per month -- have been the most aggressive in raising their prices. However, because most cablers carry regional sports channels on their basic tier, they have little leverage to negotiate a better deal.
"The fantasy is to move (regional sports channels) to a tier and let those who want them to pay for it," said Buening, adding that the sports webs usually don't allow their channels to migrate from basic cable to a tier.
The panel also discussed how the odds are against independent companies successfully launching cable channels.
"It's very difficult for a standalone to drive distribution," Kate McEnroe, president of American Movie Classics, said.
Buening and McEnroe were also on the cable panel.
