In Which Time Warner Threatens To Hold Its Breath, And, While Making Ironic Press Releases, Is Shown To Be Insulted By Basic Math

So MTV Networks and Time Warner Cable got into a pissing match over pricing yesterday, and it seemed likely we would lose Noggin, which is the only one of the 19 MTV Network channels we care about, as it keeps Cub entertained. Fortunately, it seems they were able to reach a last-minute agreement.

I looked at the statements from both companies yesterday. Viacom said:

“The renewal we are seeking is reasonable and modest relative to the profits TWC enjoys from our networks. We have asked for an increase of less than 25 cents per month, per subscriber, which adds up to less than a penny per day for all 19 of MTV Networks' channels.”

Straightforward and upfront. They told us exactly what each individual customer would be asked to pay, and noted how many channels they get for that money. Time Warner countered with:

“Viacom claims their demands equate to “pennies,” but that is misleading and insulting to our customers, from whom Viacom is trying to extort another $39 million annually – on top of the hundreds of millions of dollars our customers already pay to Viacom each year. That doesn’t sound like pennies to us.”

How is that misleading? They state outright they want a little less than one quarter per subscriber per month. Honesty is not insulting, it’s refreshing. And if you want to talk about extortion, who has the monopoly here? If I don’t like what MTV is showing, I can go to another channel. If I don’t like my cable service, I don’t have any other choices. And we don’t pay hundreds of millions of dollars to Viacom, by the way; we pay it to you.

TW continues: “Demanding that our customers pay so much more for these few networks would be unreasonable in any economy, but it is particularly outrageous given the current economic conditions.”

When did 19 become a “few”? Notice that Time Warner didn’t offer up the number of subscribers they have. FYI, it’s a bit more than 13 million. If you multiply the $0.25 increase by 12 months by 13,000,000 subscribers, you do get $39 million, so the statement from Viacom was absolutely true. Time Warner is the one that’s blowing smoke. I can picture the CEO as he dictated the press release: red-faced, arms flailing about, vein throbbing in his forehead, blowing spittle all over the poor copywriter. And the fact that they tried to scaremonger by equating our cable bill to the economic chaos makes them an even bigger bunch of assholes.

An extra quarter per month. That’s $3 extra a year for each subscriber. For 19 channels. The average cost for Time Warner Cable – considering all packages, deals, rebates, etc. – runs around $113 per month (skimming through Google, anyway). $113 per month x 12 months x 13 million customers = $17.6 billion per year. How much do you want to bet that your bill will go up by more than $3 this year? If past behavior is any indication, Time Warner will raise the price by 3%, a small but crucial difference in designator. That will be an additional $530 million Time Warner will reap. I figure it’ll break down like this: $39 million to pay Viacom, maybe $91 million for all the other deals they made, and the remaining $400 million as reparations for being called out and losing face.

Yesterday, Viacom was running scrawls on all of the affected channels urging viewers to call Time Warner to demand these networks. I called in, but to ask a question instead:

Me: I know that if you accept Viacom’s terms, you’ll pass the extra cost on to us. But what if we lose those channels? Will there be a corresponding reduction of our bill?

TW: “I’m not authorized to discuss the negotiations.”

Me: “I’m not asking about the negotiations. I’m asking if my bill will go down 25% if I lose a quarter of my available channels.”

TW: “I’m not authorized to discuss the negotiations.”

Me: “No, listen…”

Needless to say, I never got the answer, but I suspect it rhymes with “yuck foo.”

Along with newspapers (Bringing you yesterday’s news today!), cable companies really need to update their business model. People have been asking for a la carte programming for years, and keep getting told it would be impossible. Then those same cable companies turn around and offer “On Demand” services. Wait a minute…you can open up one specific channel for movies I can start at any time, and charge me per instance of usage, but you can’t figure out how to swap out Lifetime in exchange for AMC in my extended tier? Talk about insulting your customers. Their intelligence, anyway.