Who Wants to Be a Billionaire?

I know you’re enjoying the battle between Time Warner and Disney over the carriage of ABC channels on some big cable systems, even if the action has subsided for now.

It’s grand entertainment. There’s nothing like a dogfight between billionaires to get the juices going, especially if you don’t have a dog in the fight.

But the fighters see a future in which their dogs eat your dog, which does give you a rooting interest here. To see how that’s so, let’s take a closer look at this story. I’m volunteering as your guide since I once wrote a column for Crain’s Electronic Media, which covers this field like no one else.

The phrase at the heart of the dispute is “retransmission consent.”

The FCC passed this rule to guarantee that small local stations get carriage on local cable, but it can also work the other way around. Since the local stations have to be on the local cable, networks that own stations have leverage over cable operators. Disputes like the present Time-Disney fight test the limits of that leverage.

The Fox Network and Cox Cable were recently in a spat like this that was finally settled early this year. Fox wanted its Fox/FX and Fox Sports World channels to go onto Cox cable systems. Fox threatened to pull its stations off Cox if it didn’t get its way.

Disney figures what’s good for the Fox is good for the Mouse. Disney wants to make its Disney Channel a basic service (by getting more from operators) and force other channels onto cable systems. It’s using its local stations (part of its ABC Network) as leverage in this effort.

What does this have to do with you? Well, you don’t happen to own a TV station, do you? I didn’t think so.

If you have a station on the cable you have the inside track to getting your web sites onto a cable operator’s interactive TV system. After all, it’s in the cable operator’s best interest to have web adjuncts for all the cable channels it carries. This makes the interactive service useful, and an unused service is a worthless service.

Interactive TV is, believe it or not, the biggest threat to the unfettered web yet devised by the minds of billionaires. Smart people think it’s going to take off Real Soon Now.

You can read all about it but one point is clear you’re not invited. The box is free, the service is free, and to make that happen, cable operators must extract fees from every quarter possible. This means controlling what channels do, and don’t, get into their systems.

This, I believe, is what the Time-Disney dispute is all about. AOL bought Time to become the gatekeeper of interactive TV. Disney has its own, separate Internet strategy. Time doesn’t want to feed that strategy without extracting its full pound of flesh for the privilege.

And if they’ll fight each other over who’ll pay how many billions to whom in order to control this brave new world of interactive TV, what chance do you think your site has of getting in free? That’s the way both Time and Disney are thinking, and that’s why you should care.

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