Business

Cable feud brews

Time Warner Cable boss Glenn Britt drew his sword and waved it over the heads of programmers.

Britt warned media companies yesterday that he would cut low-rated channels from the cable operator’s lineup that cost too much to justify their fees — or fail to differentiate their programming.

“We’re going to have a different kind of conversation than we might have had five, six or 10 years ago,” when it comes to those low-rated services, Britt said at the annual UBS media conference in New York.

Cable distribution isn’t a “birth right” for programmers, he said.

While the cable chieftain didn’t mention specific channels, his remarks were widely seen as the opening volley ahead of negotiations to renew carriage for several channels.

TWC’s contracts with AMC Networks’ WE-TV and IFC along with NBCUniversal’s Style and E! networks, expire at the end of the year.

It’s unclear if Britt will make good on his threat.

TWC has ditched only Mark Cuban’s HD Net in recent memory, while other channels have disappeared and returned following carriage disputes.

Nevertheless, industry observers said Britt’s comments were much more forceful than his past statements on the issue of rising programming costs — and that’s likely driven by a fear of what’s to come.

Media conglomerates including Disney’s ESPN, Comcast’s NBCUniversal and News Corp.’s Fox have been reaching deep into their pockets to pay sports leagues huge increases for long-term programming deals.

The networks will almost certainly look to pass along those costs to either pay-TV distributors or advertisers — or both — in an attempt to recoup their investment.

Yesterday, Britt told the audience that programming costs have risen by 30 percent since 2008, compared with a 15 percent increase in cable prices.

Time Warner has seen its share price rise this year, driven by growth in high-speed Internet and phone customers, despite losing TV customers. The stock is up 50 percent year-to-date, closing yesterday at $95.14.

Time Warner lost 140,000 pay-TV subscribers in the latest quarter to end September with 12.16 million. It is the second-biggest cable-TV provider behind Comcast.

The company has also been playing its own part in pushing up programming costs. Just one example: paying $2 billion to the LA Lakers for a 20-year-long TV rights package and then charging almost $4 per subscriber per month to other distributors to carry its own sports service, called SportsNet.