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One step forward, maybe two steps back.

One major retransmission dispute is now resolved. After nearly two months, the Madison Square Garden (MSG) channels have been turned back on for Time Warner Cable (TWC) customers. This did not happen until the New York governor and state attorney general weighed in to put public pressure on both parties to settle. One reason that make the negotiations particularly sticky is that MSG is controlled by the family of the CEO of Cablevision, which is TWC’s major competitor.

So now we can look to Rhode Island and Pensacola, Florida, where LIN TV is threatening to pull the plug on its stations from Cox in those markets unless they can come to terms. What makes this dispute particularly interesting is that LIN TV has two franchises in each of those markets. They own a Fox and a CBS affiliate in Rhode Island, and a Fox and a CW affiliate in Pensacola. Relaxed FCC rules made it possible for a company to own more than one station in a market, which gives LIN TV increased leverage in its negotiations. According to an article in FierceCable, LIN TV has seen a severe drop in ad revenues, and so appears to be turning to retransmission fees as its main source of income.

The pay-TV services are not bottomless buckets of money, as many of their subscribers are all too happy to tell you. Milking these services (and their subscribers) for ever-larger retransmission fees is a dangerous game that is likely to hasten the inevitable review of the FCC’s rules, and who knows what changes that might bring.

Posted by Alfred Poor, February 23, 2012 5:00 AM

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About Alfred Poor

Alfred Poor is a well-known display industry expert, who writes the daily HDTV Almanac. He wrote for PC Magazine for more than 20 years, and now is focusing on the home entertainment and home networking markets.