The networks are the content providers of the network shows. They get to claim retransmission consent on their content. Locally produced content, such as news, would be controlled by the local station, but, as far as I can tell, if either the network or the local invokes retransmission consent, nothing gets shown on the cable system unless consent is worked out. If the network asserted retransmission consent, the local channel would be blacked out. (This appears theoretical at this point, as no one I know has ever tested this on a local station example.)

It’s my understanding that retransmission consent is an across-the-board thing; you either license everything, or you license nothing. I could be wrong about that, but I’ve never heard of a cafeteria approach being used. There’s no reason it couldn’t be, but I see the content providers wanting to deal on an all-or-nothing basis just to make sure there is access for everything they’ve got; from “American Idol” to “Sunrise Farm Report.”

The administration of a show-by-show license wouldn’t really be that large. You just need to throw one switch at the service provider’s end and the signal is off. They already do it with selective blackouts for local sports events.

I’m not sure what kind of control a provider could put over on-demand access beyond setting the license fee. Once that’s set, I don’t see much of a remedy for “misbehavior,” whatever you think that might be.

Is it your belief that stations can operate on a show-by-show basis for must carry/retransmission consent? (That’s not a rhetorical question — I don’t know the answer.) If not, then the station is in a pickle. It wants the cable system to carry everything that doesn’t pose a problem, namely, local news, sporting events, game shows, etc.

What strikes me the most about this situation is the towering transaction costs that will suddenly arise if all these show-by-show negotiations/blackouts/etc. must be put into place. I’m not saying it’s impossible to do, but man, what a nightmare.

Right now, the time would be right for one or more program providers to indicate that they’re going to cut Cablevision off unless they are satisfied that the company won’t misbehave with this remote DVR system. The program providers will have to tread carefully to avoid some kind of antitrust exposure if they all seem to be acting in concert. The Colgate doctrine still exists in some form, however, I believe, and the companies can point to legitimate concerns about their intellectual property (even though the courts have dismissed those concerns as far as being grounds for injunctive relief).

I’ll have to chat with my friends in the television licensing groups — if they’re willing to talk about it — to see what they’re thinking.

VG

You’ve nailed it.

There’s a recent book, “Selling Sounds Selling Sounds: The Commercial Revolution in American Music” by Scott Suisman, which examines the growth of music as a consumer good over the last 120 years. In the book, a telling parallel to the current Cablevision situation can be found in the crisis that music publishers faced when the rise of mechanical reproduction and exhibition of music (piano players, then phonographs, then radio) destroyed the sheet music business that was their economic foundation. They went to Washington and got the laws changed to make sure they were compensated from the new forms of delivery. The “mechanical license” made sure the composers were paid for every copy made of their song, and later the “performance right” guaranteed they would be paid every time the song was played in public. Neither of these concepts existed 120 years ago, because there was nothing to attach them to, and no economic transactions to share in.

That changed, and its changing again.

But VG, you’ve just got some of that “must carry” stuff wrong.

“Must carry” only applies if the television station WANTS it to apply. They are free to negotiate terms with the cable system if they so desire, and if they do not reach an agreement, they can prevent the cable system from showing the station. A cable system cannot carry a station against the station’s wishes. If your local cable system stops carrying ABC because they won’t pay a license, you can bet the “Gray’s Anatomy” fans are going to demand they make a deal. You’ve seen the crawls when it’s negotiation time…”Attention Cablevision customers: As of July 1, your reception of ABC programming will end . . .” They work. They’ll work again, especially if there is a Dish Network or DirectTV alternative that has a license.

All that is necessary to protect the financial interest of the networks is for them to elect “retransmission consent,” which means the cable system must get permission to show the content, and that permission can come with a price tag. The content providers have leverage here, and will undoubtedly use it.

If money is going to change hands, and it will, there’s a place for performers to make sure they get a part of it. There’s going to be a crowd with their hands out, so performers had better be smart, fast, and aggressive to guarantee their share.

This may already be covered in the coming IP treaty (Anti-Counterfeiting Trade Agreement). We don’t know because Obama’s keeping it secret in the interest of “National Security.” I take this as an indication that the studios have a great deal of influence in Washington.

The cable people have something called “Project Canoe” that is intended to make embedded advertising in Video on Demand time relevant to when shown (and thus more valuable). I would think that would apply here as well.

Re “Record everything” –Umm, how many TVs would you have to own to show that was a relevant thing you could have done for yourself? If the idea is to not take away rights/capability people already have, then I don’t have the capability to record all channels simultaneously and probably no consumer does. I can record 4 channels simultaneously (we have two HD DVR with two tuners each) but that’s still a far cry from “record everything” capability.