The pricing structure of the video marketplace is undergoing a transformation, and MVPDs forced to pay more for some types of programming are looking for savings elsewhere – and that is making independent channels very nervous, according to the New York Times.
It noted the recent decision by Time Warner Cable to drop two independent channels from its lineup – Current (just as the announcement of its sale to Al-Jazeera was made) and arts channel Ovation.
According to NYT, Verizon FiOS and DirecTV are also taking a hard look at their lineups with an eye to sweeping away lesser-viewed channels. The chances of survival for the less-viewed are increased, however, if they are a sister channel to one of the conglomerate-owned must have channels.
NYT said TWC has also mentioned that the fate of channels such as Hallmark, IFC, Lifetime, NHL Network, the Style Network and WE tv may be hanging in the balance.
RBR-TVBR observation: It seems to us that the truly radical change is coming from sports carriage rights, not broadcast. It should be noted that while broadcast increases as a percentage seems radical, it is only because the starting point was so low, and in fact, broadcast rates are simply moving toward parity with basic cable rates.
Sports rights are going through the roof. MVPD subscribers are harmed by higher fees whether they watch sports programming or not, and independent channels are harmed when sports expenses are used as an excuse to drop them from the lineup.
Another issue for indies is bundling — when a conglomerate-owned must-have service threatens to withhold access unless five or ten lesser channels are also placed on the MVPD menu. That is the kind of practice that shunts aside the indies, who are squeezed off the lineup.
We know that the American Cable Association has protested bundling in the past. And maybe that is something that Congress should be looking into instead
