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It's an arms-length negotiation by sophisticated parties. Some cable channels (like CNN and ESPN) can command big fees from network operators because consumers
by keithwinstein 14y ago
It's an arms-length negotiation by sophisticated parties. Some cable channels (like CNN and ESPN) can command big fees from network operators because consumers expect that these channels will be available on a cable or satellite system. Some cable channels (like, probably, Animal Planet) have to pay the operator for the privilege of being carried. Some cable channels (like HBO) are able to produce higher-quality content _because_ they have the benefit of predictable revenue from subscriptions and are not as dependant on advertising or per-show viewership.
But it doesn't do much to sit outside the negotiations and decide that you are offended by how the deal shakes out. Which way the money flows depends on the relative bargaining positions of the two parties. Yes, DirecTV is providing Viacom with a service -- operating the satellites and dealing with individual consumers and billing them. But Viacom is also providing DirecTV with a service: producing TV programs and channels (including Comedy Central) that consumers want to watch and are the reason they subscribe to DirecTV in the first place!