CBS signals remain dark on Time Warner Cable as fight drags on

CBS and Time Warner Cable remained locked in a bitter battle over a new distribution contract that left subscribers without access to CBS-owned properties in Los Angeles, New York City and elsewhere.

The signals for many CBS-owned media properties were blacked out Friday afternoon after the two companies failed to come to terms on a new contract. In Los Angeles, CBS-owned KCBS-TV Channel 2 and KCAL-TV Channel 9 both went dark. In New York City, WCBS-TV was pulled down. Also yanked by Time Warner Cable was the pay-TV channel Showtime.

In the Los Angeles area, more than 1 million Time Warner Cable subscribers lost access to CBS properties. Time Warner Cable said it would provide customers a credit for the loss of Showtime but not CBS. In a statement, the company said, CBS is part of a broad programming package that “continues to provide value.”

Subscribers looking to catch CBS content online were also denied as the network blocked Time Warner Cable broadband customers access to streams of its TV shows.

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Both sides continue to take shots at each other in the media. CBS took out a full-page ad in the Los Angeles Times and other papers Sunday encouraging Time Warner Cable subscribers to call the cable company and demand CBS be returned to its lineup.

Time Warner Cable has countered that CBS is demanding an outrageous increase in the distribution fees and that it is trying to keep costs down for its customers.

Negotiations between the two companies broke off Friday and probably will resume in the coming week, although the bad blood has both companies digging in for what could be a long fight.

While neither company will go into details about how wide the gulf is between them, media analysts and people close to the negotiations said CBS is seeking a significant increase in distribution fees. Its last contract negotiation with Time Warner Cable was five years ago and it feels it is underpaid compared to several cable networks that get higher fees but have lower ratings.

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CBS is currently getting less than $1 per subscriber, per month from Time Warner Cable and would like to get that figure into the $2 neighborhood over the life of its next contract, according to executives involved in the talks who declined to speak publicly while about private negotiations.

But money for the CBS signals is not the only issue. CBS executives are also said to be concerned about conditions Time Warner Cable is seeking that it fears could limit the network’s ability to sell product to broadband services such as Netflix or make their channels available to pay-TV distributors that deliver content over the Internet and not cable or satellite. One such service is being developed by Intel Corp. and is expected to launch this year.

Time Warner Cable has made no secret of its desire to push for as much exclusivity as possible in its distribution contracts with content companies, however a spokeswoman said it is false to suggest it is trying to block CBS from making deals with online services.

As is often the case in these feuds, some consumers are taking to Twitter and elsewhere to express their anger about the blackout. Time Warner Cable appears to be taking more heat than CBS, although many customers are angry at both companies.

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Although contract disputes between programmers and distributors are common, they are typically resolved before channels go dark. Last year, satellite broadcaster DirecTV pulled the signals of Los Angeles Times parent Tribune Co. for several days until an agreement was reached.

In the case of CBS and Time Warner Cable, the longer the signals are off, the more likely the two companies will start to feel heat from lawmakers and regulators to come to some sort of accord.

With CBS off of Time Warner Cable in Los Angeles, New York and Dallas, three of the nation’s biggest markets, its ratings may take a hit. While most of the network’s shows are reruns because it is summer, it does have the popular new series “Under the Dome” in original episodes and the reality show “Big Brother.”

As fall gets closer, Time Warner Cable will feel more pressure to agree to a deal because of the football games CBS carries, including the New York Jets.

ALSO:

CBS-owned channels go dark on Time Warner Cable

CBS blocks Time Warner Cable subscribers from accessing shows online

Follow Joe Flint on Twitter @JBFlint.