Those outside the Austin market might not be aware, but Time Warner and LIN Television’s KXAN are in the midst of a bit of a tiff. According to Wikipedia:
LIN TV ceased transmissions on Time Warner Cable systems nationwide at midnight (12:00 A.M. central daylight time) on Friday October 3, 2008. Free over-the-air stations such as KXAN have long allowed cable companies to carry their signal for free. Cable networks are paid as much as 10 cents per day per customer for their content, and LIN TV wants Time Warner to pay them less than one cent per cable customer per day. The general manager for KXAN, Eric Lassberg, has stated that the cable company “doesn’t have to pass that cost along to the viewers unless they want to.”
Naturally, each side is blaming the other for the impasse. Time Warner is telling customers to complain to KXAN. Meanwhile, KXAN wants us all to switch to dish television.
This, unfortunately for KXAN, is not going to happen for many people. Changing providers means a lot of reconfiguring of often complex systems. Plus, many people get their television and their internet connectivity from Time Warner, so you’ve got a debundling problem. And many that are renting (whether in an apartment or a house) may simply not have the option of changing.
For a while, Time Warner was talking about feeding the Belton, Texas NBC affiliate into the Austin metro, but that has yet to happen (they’re currently showing old movies on that channel). This says to me that Time Warner still hopes to close a deal with KXAN.
The reality is that Time Warner holds almost all the cards in this negotiation. We’re only two weeks away from the November sweeps period, when advertising prices are set for the next several months. Time Warner is the dominant provider in the Austin market, so KXAN risks a significant drop in their advertising pricing if they don’t get a deal done soon.
In addition, if I were managing a television ad buy for a client in the Austin market (Disclosure: I am not, but my firm Apogee Search does manage interactive buys in the Austin market), I would be seriously considering pulling my ads from KXAN. Uncertainty of distribution is a scary thing in any situation, but especially in today’s economic climate.