Neither Time Warner Cable nor CBS are releasing terms of the deal that returned CBS’ channels to TWC subscribers Monday night. “We are determined to hold down costs while continuing to provide viewers with innovative TV technology,” a disembodied voice says in a celebratory video released by Time Warner. “By standing firm, we negotiated a deal that we believe does both.”
But the deal was really a win for CBS, Bill Carter writes: “Separate statements from the chief executives of each company indicated that the outcome apparently tipped heavily toward CBS. Its president, Leslie Moonves, said in a memo to the company staff that the network had secured virtually all of what it was seeking.”
The agreement “will almost certainly continue to reduce Time Warner Cable’s margins,” a Reuters report quoting Morningstar analyst Michael Corty says. “The video margins are still substantial, but cable operators are having to make it up more and more from broadband sales,” Corty told the news service.
Time Warner won’t compensate its customers for missing out on most of the CBS channels (they will get a credit if they are Showtime or TMC subscribers), the company says. The company also says it is “working hard with programmers to try and create more flexibility in the packages we offer, but right now that’s not possible due to restrictions imposed on us by programmers.” It had previously suggested it might “unbundle” CBS’ programming.