Smaller cable-TV programmers fear system consolidations.
As cable operators stand poised to start a round of takeovers aimed at better combatting rising carriage fees — mainly from sports-rights holders — smaller programmers feel they will get the short end of the stick, executives tell The Post.
The biggest fear is that a takeover by an operator paying higher fees of an operator paying lower fees will result in smaller programmers being offered the lower fees across the combined, larger system, executives and industry insiders said.
“Anytime there’s consolidation for a small independent programmer, the landscape is bleak,” one independently owned programmer told The Post.
“Consolidation will potentially make things worse for us,” the programmer said. “It could put pressure on subscription fees. Without the strength of a Viacom or a Discovery, the road will be even more difficult.”
“It’s better to keep them divided, you know, divide and conquer,” said a source at a major programming group.
Executives at smaller programmers spoke on the condition of anonymity, fearing reprisals by cable operators.
Whether the fears are justified or not, consolidation does seem to be at hand.
Incoming Time Warner Cable CEO Rob Marcus and Charter Communications boss Tom Rutledge, speaking separately as the UBS media conference Monday, both underlined the benefits of what they saw as imminent consolidation — being able to better fight runaway carriage fees.
Charter has reportedly made two offers to acquire the larger TWC, while two other regional cable operators, Comcast and Cox, have also signaled they’d be in the market for pieces of TWC.
Consolidation will be driven, in theory, by the explosion in the cost of carrying both broadcast networks and channels carrying sports.
Cable operators have been trying out cheaper bundles to hold on to consumers, who have been dropping cable video packages in droves.
Liberty Media’s John Malone has been critical of the high price of sports channels and the need for cable operators to be more competitive with the likes of Netflix and Amazon in providing broadband programming products. Liberty owns a 27 percent stake in Charter and an unknown stake in TWC.
Rutledge said consolidation could bring about a national advertising initiative and over-the-top Internet programming projects — as well as the ability to cut overhead and content costs.
Michael Nathanson, an entertainment industry analyst at Moffett Nathanson, told The Post he thinks if there is a deep level of consolidation, that is, “if they roll up the industry, then it will affect the balance of power on the content side to negotiate price increases.”
One major programmer said there was little concern about the negative effects of consolidation. “Anything they do won’t alter the current agreements until they come due.” This person added: “It definitely impacts the smaller guys, but for the larger programmers I don’t see a negative.”