Unbelievable. Disney decided to pull the plug on WABC-TV with Cablevision in the New York area on Academy Awards Sunday. Sports fans throughout New York are thankful ABC didn’t have the broadcast rights to the Olympics or the Super Bowl. As of 7:30 PM EST, still no agreement.
Let’s assume there won’t be an agreement. Both Disney and Cablevision lose. ABC will face the ire of advertisers who won’t be reaching a couple of million viewers in an affluent market. Cablevision, already among the least loved companies in Greater New York, will rise to the top of the most hated list with a bullet. No small feat in a metro area that sports AIG, Citibank, ConEd, and the LIRR.
Cablevision is claiming Disney wants $1 per subscriber per month for the right to distribute WABC-TV. Cablevision already pays Disney for the Disney Chaneel, ESPN, ESPN2, ESPN News, and the half dozen or so other outlets that provide repeats of SportsCenter round the clock. What am I not getting? Disney already broadcasts WABC over the air for free. WABC’s business model is to sell advertising. Cablevision helps Disney reach more ABC viewers, so ABC can sell more advertising.I’d
Let’s say Disney prevails, and every New Yorker’s cable bill goes up a buck. Customers get mad and switch to FIOS. Disney shakes down Verizon. Customers get mad and give up on TV. By then Lost will have run its course. Who’s going to miss TV? Customers might be mad at Cablevision tonight, but it won’t be long before Disney pays a price as well.
Everyone involved understands Disney’s challenges. Ad revenues for broadcasters across the spectrum are down as audiences shrink, but Disney needs to learn from those who have gone before — music labels and newspapers. Raising the price to the customer only exacerbates the problem.
Updated 9:00 PM 3/7/10 – New York Times reports someone blinked. This kind of brinkmanship is no way to treat customers.