Walt Disney Co’s WABC-TV cut its signal to Cablevision Systems Corp subscribers on the eve of the Academy Awards broadcast, after the two companies failed to agree on fees to carry the New York station.
“Cablevision has once again betrayed its subscribers by losing ABC7, the most popular station in the tri-state area,” WABC said in a statement yesterday. “This follows two years of negotiations, during which we worked diligently, up to the final moments, to reach an agreement.”
The action threatened Cablevision customers’ access to Disney’s ABC network telecast of the Oscars ceremony last night in New York and parts of New Jersey and Connecticut. TV networks are trying to extract fees from pay-TV operators for carrying signals broadcast for free, adding a new revenue source as advertising has declined.
“The broadcast networks want to monetize free signals going into everybody’s home already,” Rick Franklin, an analyst at Edward Jones in St Louis, said in an interview on Friday. “Cablevision can’t afford to have ABC dark for long. Otherwise their customers may go someplace else.”
Cablevision said WABC wanted US$40 million a year in addition to the US$200 million paid for cable channels including ESPN. The company urged Disney chief executive officer Robert Iger to reverse the move.
“We call on Bob Iger to immediately return ABC to Cablevision customers while we continue to work to reach a fair agreement,” Cablevision said in a statement.
WABC said it has been seeking an agreement for two years. Cablevision wasn’t sharing any of the US$18 a month customers are charged for a cable package with WABC, the station said. It urged viewers to watch “free, over-the-air, or by switching to one of Cablevision’s competitors.”
Verizon Communications Corp’s FiOS television service has started offering a US$75 discount in New York aimed at converting Cablevision subscribers. A WABC blackout affects customers in Long Island, Westchester, Brooklyn and the Bronx, as well as parts of Connecticut and New Jersey.
Disney, the world’s largest media company, gained US$0.65 to US$33.22 on Friday in New York Stock Exchange composite trading. Shares of the Burbank, California-based company have increased 3 percent this year. Cablevision, based in Bethpage, New York, climbed US$0.21 to US$24.28 and the stock has risen 14 percent this year.
Disney is seeking US$1 a month from Cablevision for each subscriber receiving WABC’s signal, Anthony DiClemente, an analyst with Barclays Capital in New York, wrote in a report on Friday.
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