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Business columns: In cable battle, consumers are the big losers

As technology upends the viewing habits of consumers and the spending patterns of advertisers, media companies will scrap over a diminishing pile of revenue, said Daniel Gross in <em>Slate.com.</em>

Daniel GrossSlate.com

Who needs shows like 24 when Fox, the network that broadcasts the spy drama, is staging cliffhangers of its own? asked Daniel Gross. Viewers in New York, Los Angeles, and other large U.S. markets were recently treated to a standoff between Fox and the Time Warner cable system. Unless the cable operator paid “$1 per subscriber per month for the privilege of airing Fox,” the network threatened to deny its programming to Time Warner customers. The two sides reached a last-minute settlement, which is more than Cablevision, another big cable operator, can say about a similar dispute with HGTV and the Food Network.

“These fights are a portent of things to come.” As technology upends the viewing habits of consumers and the spending patterns of advertisers, media companies will scrap over a diminishing pile of revenue. Broadcast channels such as Fox and cable channels such as HGTV will demand an ever-larger cut of monthly subscription fees to make up for lost advertising dollars. In turn, the cable companies “will, with what they assure us is great regret, pass the costs on to us.” Everyone wins—except consumers.

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