Subscribers to Time Warner Cable might not be able to watch CBS shows over the next few weeks, as a result of the latest contract fallout between a network and a pay TV operator. But at least one expert believes that the blackout, while disruptive in the short term, is actually good news for those who pay TV viewers, whether they’re Time Warner Cable subscribers or not.
Late last week, the inability of the two parties to reach an agreement resulted in Time Warner Cable blacking out CBS in many of its major market, and CBS blocking online access to its shows on its own website. Dr. Philip Pangloss, professor of media studies at the University of New York, believes that while painful in the short term, the blackout will have long-running benefits for cable subscribers.
In a phone interview early Sunday morning, Pangloss told me that he believes the skirmish will result in the “best of all possible worlds” for all parties involved. That includes both CBS and Time Warner Cable, as well as consumers who pay monthly to watch programming that is otherwise available for free online or over the air.
Pangloss is the author of the upcoming book “Blackout Nation: The Inside Story Behind Big Cable’s Programming Renaissance,” which he wrote after studying the relationship between network programmers like CBS and distributors like Time Warner Cable for more than seven years. The book takes a qualitative look at the results of more than two dozen recent blackouts of the last several years — and what it concludes might surprise you.
In every case, Pangloss says, the temporary blackout of a broadcast or cable network due to contract negotiations with an operator has resulted not only in greater profits for all parties involved, but also better programming and a more valuable cable package for consumers. And he believes that the most recent skirmish between Time Warner Cable and CBS will be no different.
“At the end of every blackout, we’ve seen the networks walk away with more money, which ultimately gets re-invested into better programming for consumers,” Pangloss told me.
He pointed to the DirecTV-Viacom dispute of last summer as one example of a blackout that had big benefits for subscribers to fans of Viacom channels. The deal helped MTV to bring back shows like Teen Mom, now in its third season, while also delving into innovative new territory with shows like Catfish: The TV Show and upcoming original dating show The Hook-Up.
While less immediately obvious, the increase in revenues has also resulted in more audacious programming and creative freedom for shows appearing on Viacom networks. For instance, Nickelodeon hit Dora The Explorer has taken its episodes to the next level with even more adventure, as the team behind Dora and Diego are pushing the envelope for children’s programming.
The 14-day blackout of Fox on Cablevision is another case where the jump in revenues could be directly linked to better programming for viewers. Without that blackout, Pangloss says, it’s unlikely the network would keep bringing back the Simpsons season after season. And Gordon Ramsay fans would have nowhere to turn as his four shows on the network — Hell’s Kitchen, Hotel Hell, Kitchen Nightmares, and MasterChef — probably would not have all been picked up.
The investment in new, innovative programming is good not just for those who are affected by the blackout, but also viewers on other cable systems as well, according to Pangloss. He suggests that in a way, they are paying it forward — at least until the same network goes dark on someone else’s cable system.
One other side benefit of a blackout is that viewers end up discovering new shows they didn’t know existed when their favorite networks go dark. Pangloss theorizes that Big Bang Theory fans might find themselves watching ABC’s Wipeout instead, and find that they really enjoy it. That results in viewers watching more shows across a wider variety of networks.
For all those reasons, he thinks blackouts might even be the best way to create value for everyone involved. That’s because, in addition to lining the pockets of the programmers, they also improve the overall value proposition of the cable package.
In the wake of a blackout, viewers might notice their cable bills go up a little bit, due mostly to the cable company passing its costs on to consumers. But without those price increases, Pangloss says, the engine that keeps the networks pumping out superior programming would stop humming.
As for critics who believe that cable might be getting too expensive, Pangloss has built a model which shows that the cost of cable would have to double or triple before consumers would consider no longer paying for it. But even then, they’d see that the value of the package they’d subscribed to would have increased two or three times as much — making it still a great deal.
“Without a doubt, cable or satellite TV is still an incredible value,” Pangloss said. And the value of the package only increases, he says, each time a network is able to extract more money from consumers, creating the “best of all possible worlds” for the everyone in the cable ecosystem — the programmers, the distributors, and the viewers who pay for it all.
“The cable package that consumers have today is the best possible package that could have been put together… Inevitably, the programming that we have now is better than what we would have had without these price increases. It’s basically a win-win-win for all involved.”