MCN Columnists
David Poland

By David Poland

The 2013 Crystal Ball: Sidebar – How Cable/Satellite Companies Ended Up Paying For Every Channel

Cable/Satellite is probably the best place to describe this massive change. 30 years ago, cable companies were fighting and spending to lay cables into the ground to deliver content to households on level never before experienced. They were fighting, region by region – often regions within regions – for these rights because they were, effectively, a monopoly. They were required by the government to carry all local broadcast channels, VHS and UHF, as that was a community service that figured in as part of the price of being handed those regional monopolies. All new channels had to go, hat in hand, to these cable businesses that delivered the television into whatever chunks of the world they monopolized (with actual over-the-air broadcast TV losing market share annually).

The movie business was involved in various ways, including in their TV arms which provided content – old and new – even owning stations. But early on, the big cash cow was selling movies to premium channels, like HBO. Those premium channels were driven almost exclusively by new movies, available earlier on premium cable than on broadcast TV.

Then, the VHS era started. Then the Blockbuster era, as the studios partnered with the VHS rental giant (and a few others) to flood the market with movies before the premium cable window, thus, obviously, before the network window.

But DVD, which was positioned from the start as a sell-thru market, was an even bigger game changer. It’s been in the DVD era when HBO, for instance, started being driven primarily by original programming and not by movies… though the expansion of cable/satellite into a multiplex of each premium cable network’s channels has created a slightly slower drain.

Why did DVD change so much? Because owning the content is very different from renting the content. If you rent Movie X on the first weekend it’s available at Blockbuster (or eventually, Netflix), you saw the movie that weekend for $4 or $5 and then, when it lands on premium cable 6 months later, you haven’t seen it in 6 months. It has some value. Less than it would have had if you had never had the chance to see it at all after theatrical. But given some interest in the content, there is value to it showing up on your TV as an ongoing rationalization for paying for a premium channel.

If you own the DVD, you have the freedom to watch Movie X anytime you want to watch. You don’t have to wait for it to be on HBO. You don’t even have to push a little button on the remote to DVR it and fill up that box with 25 hours or 50 hours or 100 hours of space available overall.

And when Netflix started streaming movies – initially a very wide range of product from a majority of studios – the value of movies to cable/satellite continued to shrink.

Meanwhile, sports, the other big driver of cable/satellite, took full advantage of the imbalance with film, and started driving rights fees to multiples of what they had ever been before. Even in the era of decreasing ratings, the ratings for live sports content are so strong compared to anything else that these deals keep getting done. And so the question, who is going to pay for it? Well, the cable and satellite companies were asked to pay for it. And then, after they look at their balance sheets, you are being asked to pay for it.

But wait, if cable/satellite companies are paying – by way of the broadcast and biggest cable networks – for programming, essentially, what would they pay for some other non-sports programming that has a strong following. The big networks, yes. But the small networks too. AMC, home of The Walking Dead and Breaking Bad, was not a key player… until they had a few series that were so popular with a few million people that those people would change cable/satellite providers if those shows were no available to them.

And that, in broad strokes, is how we now have cable/satellite providers (and Netflix, by the way) as financial partners with content creating companies. All content is being valued in a different way than it was just 3 or 4 years ago.

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It shows how out of it I was in trying to be in it, acknowledging that I was out of it to myself, and then thinking, “Okay, how do I stop being out of it? Well, I get some legitimate illogical narrative ideas” — some novel, you know?

So I decided on three writers that I might be able to option their material and get some producer, or myself as producer, and then get some writer to do a screenplay on it, and maybe make a movie.

And so the three projects were “Do Androids Dream of Electric Sheep,” “Naked Lunch” and a collection of Bukowski. Which, in 1975, forget it — I mean, that was nuts. Hollywood would not touch any of that, but I was looking for something commercial, and I thought that all of these things were coming.

There would be no Blade Runner if there was no Ray Bradbury. I couldn’t find Philip K. Dick. His agent didn’t even know where he was. And so I gave up.

I was walking down the street and I ran into Bradbury — he directed a play that I was going to do as an actor, so we know each other, but he yelled “hi” — and I’d forgot who he was.

So at my girlfriend Barbara Hershey’s urging — I was with her at that moment — she said, “Talk to him! That guy really wants to talk to you,” and I said “No, fuck him,” and keep walking.

But then I did, and then I realized who it was, and I thought, “Wait, he’s in that realm, maybe he knows Philip K. Dick.” I said, “You know a guy named—” “Yeah, sure — you want his phone number?”

My friend paid my rent for a year while I wrote, because it turned out we couldn’t get a writer. My friends kept on me about, well, if you can’t get a writer, then you write.”
~ Hampton Fancher

“That was the most disappointing thing to me in how this thing was played. Is that I’m on the phone with you now, after all that’s been said, and the fundamental distinction between what James is dealing with in these other cases is not actually brought to the fore. The fundamental difference is that James Franco didn’t seek to use his position to have sex with anyone. There’s not a case of that. He wasn’t using his position or status to try to solicit a sexual favor from anyone. If he had — if that were what the accusation involved — the show would not have gone on. We would have folded up shop and we would have not completed the show. Because then it would have been the same as Harvey Weinstein, or Les Moonves, or any of these cases that are fundamental to this new paradigm. Did you not notice that? Why did you not notice that? Is that not something notable to say, journalistically? Because nobody could find the voice to say it. I’m not just being rhetorical. Why is it that you and the other critics, none of you could find the voice to say, “You know, it’s not this, it’s that”? Because — let me go on and speak further to this. If you go back to the L.A. Times piece, that’s what it lacked. That’s what they were not able to deliver. The one example in the five that involved an issue of a sexual act was between James and a woman he was dating, who he was not working with. There was no professional dynamic in any capacity.

~ David Simon