January 5, 2010

Will the Fox , Time Warner deal change future cable contracts?

Time Warner Cable Inc. and News Corp. recently ended a television-programming dispute that threatened FOX blackouts for cable television viewers in New York, Los Angeles, Dallas and elsewhere.

According to the Wall Street Journal, News Corp. and other owners of major networks historically haven’t sought direct payments for their broadcast stations. Rather, they have used negotiations with cable- and satellite-TV companies to press for carriage of new channels, such as News Corp.’s FX or Walt Disney Co.‘s ESPN2, or for higher fees for existing channels. TV executives said the market for new channels is nearly saturated, so they are moving to squeeze more money from their existing networks.

The  new contract between Fox and Time Warner has the potential to change the way content providers deal with major cable carriers, said journalism professor Chris Harper.

“Fox is taking control of its content both on cable and on the Internet,”  Harper said. “It’s a good move for content providers who want to challenge cable and Internet aggregators like Google.  It’s kinda like Napster on a bigger scale. Let the games and the lawsuits begin.”

– Jazmyn Burton

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