CBS Corporation (CBS) and Time Warner Cable Inc (TWC) Are Both Losers

Page 1 of 2

There’s finally a truce in the monthlong battle between CBS Corporation (NYSE:CBSand Time Warner Cable Inc (NYSE:TWC).

Time Warner Cable Inc (NYSE:TWC) subscribers finally started receiving CBS Corporation (NYSE:CBS), Showtime, and other CBS-owned cable channels last night. They were the real losers here, collateral damage in a battle between two fading media moguls that actually benefited from the outage. Time Warner Cable Inc (NYSE:TWC) profited from not having to pay CBS. CBS Corporation (NYSE:CBS) gained ground by reinforcing how important its programming is to some cable customers.

CBS Corporation (NYSE:CBS)

The tables turned last night.

Sure, CBS Corporation (NYSE:CBS) and Time Warner Cable Inc (NYSE:TWC) are busy patting their own backs. They don’t realize that cable customers just gained the upper hand. There’s one more reason to cut the cord. There’s one more reason to move to the piecemeal pricing that will treat subscribers with the respect that they deserve.

After all, did anyone really miss CBS’ Smithsonian Channel? Even if the average Time Warner Cable Inc (NYSE:TWC) customer is just paying pennies a month for the network, that’s too much for the vast majority of homes that aren’t watching. Sure, those that do watch would likely be willing to pay far more than the average that they are paying. Let them. It’s inevitable.

Showtime is a popular premium movie channel that has been home to some of television’s best shows. Homeland, Dexter, and now Ray Donovan are some of the most critically acclaimed shows on television. Unlike some of the other deals struck in last night’s carriage deal, subscribers already have a choice as to whether they want to pay for Showtime or not. Well, is Showtime really worth twice as much as a Netflix, Inc. (NASDAQ:NFLX) subscription?

Some will argue that Showtime is worth that much, but there’s a reason why the stunt that played out in August between CBS Corporation (NYSE:CBS) and Time Warner Cable Inc (NYSE:TWC) will be ultimately beneficial to Netflix, Inc. (NASDAQ:NFLX). Customers can’t catch Showtime unless they’re already paying for overpriced cable and satellite television plans, making Showtime far more expensive than the $7.99 a month that Netflix is commanding.

Page 1 of 2