A troublesome trend has emerged over the past year in the cable industry. Public disputes over retransmission fees, or "retrains," have been all the rage, with customers caught squarely in the middle.
Since Saturday morning, 3 million Cablevision
But what are the repercussions for Cablevision? Take its first quarter of 2010, when the company engaged in high profile retrans battles with ABC parent Disney
How'd this impact Cablevision? The company actually gained customers in the quarter!
What about Time Warner's
Despite the examples above, this trend has to be bad news for the cable companies over the long term. Consider their alternatives:
- Hold your ground with the broadcast behemoths, and risk losing their signal. If these blackouts become more protracted or occur during a major broadcast event, they risk alienating customers.
- Pay exorbitant fees, and inevitably pass that expense on to the customer, who is already paying more than they'd like.
You'd think that customers would support providers holding their ground to keep prices low, but I'm not convinced they are. The emotion that comes with missing a big game or your favorite show is powerful stuff. And when other people with different TV providers in your area have Fox, customers will inevitably blame their cash-flush cable provider.
At some point, these factors have to be reflected in the subscriber numbers. I have no loyalty to my cable provider. And I don't think I'm the only one.
Fool contributor Stephen Marini doesn't own shares in any of the companies mentioned above. Walt Disney is a Motley Fool Inside Value selection. Walt Disney and Scripps Networks Interactive are Motley Fool Stock Advisor recommendations. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.