October 2, 2013 - Phoenix, AZ -
Cable ONE President and CEO Tom Might issued the following statement regarding Turner Broadcasting System's decision yesterday to pull TBS, TNT, and Cartoon Network from Cable ONE's channel line-up.
"In an extraordinary act of retaliation and bullying, Turner Networks removed TBS, TNT and Cartoon Network from all Cable ONE systems without warning, when our prior Turner contract expired on October 1. This happened despite the fact that Cable ONE had signed new contracts and already agreed to pay an enormous nearly 50% rate increase for these three networks."
"Over the past three-years, Turner Network ratings have declined more than 10 percent, yet Turner demanded that Cable ONE continue to carry all eight Turner Networks with a nearly 50% overall cost increase for the next three years. Cable ONE instead decided to keep only the more popular networks on (TBS, TNT and Cartoon) and drop the less popular networks (Boomerang, TruTV, TCM, CNN and CNN Headline News). This would keep Cable ONE's future Turner programming cost very close to its past cost and limit the need for future customer rate increases. "
"We signed contracts for TBS, TNT and the Cartoon Network through the National Cable Television Cooperative (NCTC), which allows for the purchase of individual channels rather than the entire bundle of eight. In a disgraceful punitive reaction, Turner Networks refused to recognize the NCTC contracts and immediately de-authorized all Cable ONE systems in order to 'teach' Cable ONE a lesson about the power of cable programmers to tie and bundle channels together and force carriage of unwanted bundles. They refuse to give cable operators or their customers any choice about what they can or cannot buy."
"As we enter the era of declining national Pay TV penetration and rapidly expanding choices of video over the Internet, it is hard to understand the long-term business sanity of many cable programmers' behavior," Might said. "Fewer and fewer consumers can afford Pay TV every year and more and more consumers are choosing the convenience of video over the Internet. This kind of programmer behavior will rapidly accelerate this trend as Pay TV providers pass these exorbitant programming costs on to customers with less money and more alternatives."
"However, Turner Networks' parent company, Time Warner, is following its plan as described below by its CEO, Jeff Bewkes, and CFO, John Martin, last August on a recent Wall Street conference call:
From SNL Kagan - August 7, 2013
Time Warner Inc. set an ambitious goal for itself: growing Turner Broadcasting System Inc.'s domestic subscription revenues at a double-digit compound annual growth rate between 2013 and 2016.
But though the goal is not an easy one, the company said during an Aug. 7 earnings conference call that it is already on track to achieve it.
"Last month, we completed a contract renewal with a top-five distributor and got the affiliate fee increases we were seeking," Time Warner CEO Jeff Bewkes said during the call, adding that the deal gives the company "more confidence" about its long-range target.
Asked for more color about the newly negotiated deal, Time Warner CFO John Martin said the company would not go into specifics. But he noted: "We said during the middle of this year we would begin what was the most ambitious rate renewal cycle the company [had] experienced in years, and so this was the first big deal."
"While this may play well on Wall Street, it will not play well in pay TV homes. It puts cable programmers on the same old trajectory as the music industry, the newspaper industry, and other such high rolling industries that could not see the future before it was too late."
"We apologize to our customers for the loss of TBS, TNT and Cartoon. We will issue customer credits and we will replace the other Turner networks over time with more popular networks. We hope Turner Networks stops their greedy, bullying antics, respects the contracts we have signed for TBS, TNT and Cartoon, and returns them to viewers soon."
About Cable ONE
Serving 730,000 customers in 19 states with high speed Internet, cable television, and telephone service, Cable ONE provides consumers a wide range of the latest products and services, including wireless Internet service, High-Definition programming, and phone service with free, unlimited long distance calling in the continental U.S. More information – www.cableone.net.
Trish Niemann, Cable ONE Public Relations Manager