The Cable Industry’s Lies about Programming Diversity and A la Carte

 

30 June 2004

 

The cable lobby has launched an effort to undermine proposals by consumer advocates that would help break the economic lock that a few companies have over multichannel programming.  Under a new A la Carte system, subscribers could choose and pay only for the channels they wished to watch.  Today, in contrast, subscribers have to accept a “bundle” of channels from cable operators.  Cable conglomerates control this bundle and are able to make monopoly profits off the channels they include.  In the words of media scholar Mark Cooper of Consumer Federation of America, this amounts to a “media concentration tax.”

Desperate to fend off a requirement for A la Carte, the cable industry has engaged in various lobbying ploys.  One specious argument is that today’s cable line-up is diverse.  The industry’s claims that many of its channels, which feature niche perspectives including those serving women and persons of color, would be threatened in a system in which consumers don’t have to accept the cable-approved programming bundle.  In Washington, DC, cable has employed its lobbyists to generate opposition to A la Carte.  On June 23, for example, a Time Warner representative helped organize an anti-A la Carte meeting that featured spokespersons from several cable channels, including Oxygen, TV One, and Si TV, whose questionable ownership pedigrees are described below. 

First, here’s a brief fact sheet responding to cable’s claims that they offer diverse programming: 

Lie 1: A la Carte will have “a chilling effect on programming diversity.”

Truth:  The cable monopoly keeps a firm grip on all programming ventures.  If they don’t own a piece of you, assuming that they even want your programming, you don’t stand a chance.  The reason there’s no diversity on cable is because that’s what the industry wants.  A la Carte will help break the stranglehold that the cable monopoly has over American programming.

Lie 2: Cable is in Favor of Diversity on TV

Truth:  The cable industry and giants such as Time Warner have bitterly fought--at FCC, Congress, and in courts--any proposal that would limit the number of channels that a single cable company can own.  According to the Writers Guild of America, six companies control much of what we can see on cable.  Only by breaking the tight grip that the cable industry giants have on channel capacity can new entrants successfully enter the programming marketplace.  For cable, diversity means meeting the needs of advertisers for highly targeted demographic marketing; it has nothing to do with addressing the needs of the public for information, news, and independent perspectives.

Lie 3: Cable is in Favor of Diversity on the Internet

Truth:  Cable is opposed to a public policy of nondiscriminatory access to the high-speed Internet.  It has employed its many lobbyists and lawyers to change the fundamentally democratic nature of the Internet by successfully obtaining new rules for broadband at the FCC.  The ACLU has called cable’s actions a serious threat to our First Amendment freedoms.

Lie 4: Cable Seeks to Promote Diverse Viewpoints.

Truth:  Cable’s track record shows a consistent pattern against diversity of expression.  Comcast and Cox, for example, refused to air ads against the war in Iraq.  Comcast has refused to support an expansion of public access in such communities as Seattle and San Jose.  Viacom (owner of BET) has refused to allow that channel to expand its news and public affairs programming services.  Comcast rejected the programming ventures of two African-American creative artists (Russ Simmons and Tim Reid) because it felt their programming plans for news and entertainment were too “high-minded.”

Lie 5: Cable is the Home to Diversely owned Channels. 

Truth:  Media concentration is one of America’s most important issues.  In particular, it is essential that the public have access to serious news, diversely owned entertainment, and programming not affiliated with the major cable/broadcast giants.  Here’s an example of so-called diversity on cable today: National Geographic is controlled by Murdoch’s News Corp; local Spanish language news channels in New York and Tampa are owned by Time Warner; TeleFutura (Univision); Toon Disney in Spanish (Disney/ABC); WHUno (MTV-Viacom); CNN en Espanol (Time Warner); Discovery Espanol (Liberty Media, Cox, Advance Newhouse); Fox Sports en Espanol (Murdoch’s News Corp); HBO Latino (Time Warner); mun2 (GE/NBC)

Who Really Owns TV One?  Comcast handpicked this new channel serving African-Americans.  Alfred Liggins’ Radio One has only 40 percent of the new network, according to its most recent annual 10 K report to the SEC.  Majority control rests with Comcast and other investors.  Comcast insisted on “operational” control of any African-American channel as it evaluated proposals from Liggins, Russ Simmons, and Tim Reid.  TV One is ultimately part of Comcast’s programming empire.[1]

Who Really Owns Oxygen Media?  Geraldine Laybourne has been the lone woman inside the all-male club of cable industry powerbrokers.  She was the one who took what was supposed to be a noncommercial channel for children and made it into a super-commercial force (Nickelodeon).  Cable has a bulletproof glass ceiling when it comes to women actually owning channels.  Some of the biggest cable companies are major investors in Oxygen, giving them significant control.  They include Time Warner and Charter Communications (via Paul Allen’s Vulcan Ventures).  The Securities and Exchange Commission is investigating Oxygen’s cozy financial relationship with Time Warner (and AOL).  According to press reports, Oxygen was able to secure cable distribution from Time Warner after it agreed to buy $100 million worth of ads on AOL.  Laybourne is also on the board of cable system giant Insight Communications.  She is frequently sent by cable to lobby on its behalf to give the industry the pretense that it reflects the interests of women.[2]

Who Really Owns Si TV?  Si TV was co-founded by former top execs of media conglomerate Viacom.  Cable giant Time Warner is a major investor (as is Echostar, which operates one of the two principal direct broadcast satellite services).  Citigroup handled the financial transaction for its well-heeled investors.  Si TV says it is “an English-language, Latino network featuring hip and irreverent culturally relevant programming targeting the growing young Latino and multi-cultural TV audience.”[3]

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[1] 10 K Annual Report filed by Radio One, SEC.  3/11/04. Diane Mermigas, “Comcast Courting Bornstein,” TV Week Nov. 18, 2002); R. Thomas Umstead, “Comcast’s Clout: Giant MSO Flexes its Muscle with Nets,” Multichannel News Nov. 25, 2002.  For an example of an independently owned African American channel having problems with cable carriage, see R. Thomas Umstead, “What’s in a Name Change? More Subs for MBC,” Multichannel News June 21, 2004.

[2] “Economics of Basic Cable Networks,” Kagan World Media (2003); “SEC Probes if AOL Double-Booked Revenue on Oxygen Deal,’ The Street.com, Nov. 7, 2002; Hoovers Online, http://www.hoovers.com/oxygen-media/--ID__59171--/free-co-factsheet.xhtml.

[3] “Si TV Adds Backing,” Multichannel News Apr. 12, 2004; “Si TV Secures Funding From Investors Including EchoStar and Time Warner,” press release, PR Newswire, Apr. 5, 2004.