Can Time Warner Cable buy forgiveness with a free movie coupon?

So, if a free set of rabbit ears wasn’t enough to make you love Time Warner Cable, or at least stop hating it, how about a coupon for a free movie?

As promised last week, the cable operator started sending coupons Wednesday to the 3.2 million customers in Los Angeles, New York, Dallas and other cities who’ve been cut off from local CBS stations for almost four weeks. The coupons can be redeemed for one viewing of a movie on demand sometime in the next 60 days.

The only movies available are the ones on Time Warner’s cable system, which is similar to what you might find on Amazon or Vudu. So it’s not the same thing as getting a ticket to the local multiplex, where the newest releases play. But hey, free is free.

Time Warner’s effort to gin up goodwill points to at least a couple of the challenges faced by the cable operator as the dispute drags on.


First, it’s really hard to put a value on the programming that’s been blacked out. While the cable operator can (and is) giving customers rebates for the premium channels they’ve lost during the impasse, it’s not doing so for CBS, which has no individual price tag. Instead, it’s offered only in a package with many other channels.

The least expensive of these is the $28 “broadcast” package, which includes at least 44 channels. Time Warner could rebate 1/44th of the tier’s monthly price (a whopping 63 cents), but doing so would suggest that CBS is worth no more than the home shopping channel or California Lutheran University’s telecasts, whose audiences are, umm, not quite as large as the top-ranked broadcaster’s.

Even if it offered to rebate customers the full amount it had been paying CBS for the retransmission rights (reportedly less than $1 a month, although CBS wants to up that to $2), Time Warner still wouldn’t compensate the network’s viewers for the loss of its unique programming. “NCIS” might seem like just one of many procedural dramas on TV, and “Big Brother” one of many reality shows, but fans of those programs don’t feel that way. Ditto for the NFL games the network carries.

Here’s the second issue. CBS’ programming varies widely in value across the Time Warner subscriber base. Cable networks have fragmented the TV audience. Many of Time Warner’s customers are deeply offended by the CBS blackout, but others don’t miss the network’s shows. Offering the former a $6 movie coupon may seem like an insult, but to the latter it’s a windfall. Even if the actual cost of the movie to Time Warner is considerably less than $6.

Time Warner offered this explanation for its decision not to offer rebates for the loss of CBS stations: “CBS is carried as part of a programming package, and the pieces of that package change from time to time. We do not make it a policy to credit customers for any individual channel change, because the whole package continues to provide value.”

Meanwhile, in addition to the free movie coupon, it’s providing free access to the Tennis Channel for the two weeks of the U.S. Open (which will offer replays of the big matches, but not live coverage -- that’s exclusively on CBS) and an extended free preview of the Starz Kids and Family movie channel. It’s just another reminder that there are plenty of substitutes for a blacked-out TV channel, just no perfect ones.


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