AT&T-Time Warner Trial: DOJ Focuses on Turner’s Negotiation With YouTube TV

UPDATED: WASHINGTON — As a ATT-Time Warner antitrust box entered a third week on Monday, a Justice Department zeroed in on a hard-charging negotiating strategy between Turner Networks and distributors, mostly with a appearing hazard of channels going dark.

The supervision is perplexing to uncover that a total association will have augmenting precedence to direct toilsome rates from opposition distributors, along with new online upstarts like YouTube TV that offer a “skinny bundle” of channels to subscribers during cheaper prices.

On a mount for many of Monday was Coleman Breland, now boss of Turner Classic Movies and Turner’s former boss of calm distribution.

As an inauspicious declare for a government, he was asked questions about a array of blackouts or near-blackouts, including when, in 2012, a Turner channel roughly went dim on Time Warner Cable over a singular penny-per-subscriber increase.

Breland concluded that Turner has been means to secure “significant” rate increases with distributors over a past 5 years.

“We’ve finished well, yes, on a rate increases,” he said, though combined that, in some cases, they had been looking to “catch up” to what they saw as a loyal value of a networks.

YouTube TV primarily launched though renouned Turner channels like TBS, TNT, and CNN. Breland pronounced that when YouTube TV sought a understanding to lift Turner networks that year, it wanted rates that were “some of a lowest we have seen in a industry,” among other proposals. It also wanted to separate adult Turner networks so reduction fascinating channels would be on an “optional tier,” rather than a simple charity to intensity subscribers.

Breland wrote in an email during a time that YouTube TV’s proposals would means “irreparable harm” to a Turner business model. He sensitive Time Warner CEO Jeff Bewkes of a proposals, and Bewkes afterwards educated that HBO, another Time Warner unit, to stop negotiating with YouTube TV for a carriage of that network.

The Justice Department’s attorney, Dylan Carson, remarkable that a 1997 Federal Trade Commission agree direct for Time Warner’s partnership of Turner enclosed a condition that taboo aligning HBO with a Turner channels in carriage negotiations. But a condition lapsed after 10 years.

Carson asked Breland either this was partial of a negotiate “strategy” or “goal” to align Turner networks and HBO carriage negotiations during a same time — eventually giving Time Warner some-more leverage.

Breland pronounced that he was “not aware” that it was a “strategy,” though pronounced that in “some situations” they have aligned a timing of Turner and HBO negotiations.

Later, underneath doubt from ATT-Time Warner’s profession Kevin Orsini, Breland pronounced that he has “never seen an HBO contract” and does not negotiate with them. He pronounced that Bewkes’ regard has been that Turner and HBO negotiations is a matter of communication, that they “know what any other is doing.”

He also pronounced that a regard in a box of YouTube TV was that if Turner concluded to those terms, they would have to also give them to other distributors, given a superiority of “most adored nation” clauses in contracts.

YouTube TV started carrying a Turner networks this year, though it does not lift HBO.

Other highlights:

Going ‘Dark.’ Breland concurred that in negotiations with roughly all vital distributors in new years, Turner’s networks have gotten tighten to going dark. Among a instances was in Dec 2016, when Turner’s channels came within 10 mins of going off of Charter’s wire systems until Charter paid aloft rates.

Breland pronounced that carriage negotiations opposite a courtesy have gotten some-more quarrelsome given 2010, when expansion in a courtesy peaked. That has put some-more vigour on programmers to boost carriage revenue. The negotiations “always come down to a final day, infrequently to a final minute,” he said.

He also challenged a thought that Turner was looking to secrete calm from pretender rivals, observant that a idea was to obtain far-reaching carriage opposite platforms, generally with augmenting foe for viewers’ attention.

“The intrusion is like Mount Vesuvius on tip of Pompeii,” he said.

“If a spare gold is launched and we’re not partial of it, afterwards we get left behind,” he added.

Dish Network blackout. In October, 2014, all of Turner’s channels solely TBS and TNT were pulled from Dish Network. It finished about a month later, when Turner and Dish extended their agreement for 4 months, to a following spring.

The DOJ focused on Turner’s preparations for a probability of another trance in April, 2015, that would have occurred in a midst of Mar Madness, something that fundamentally would have done Dish business irate.

Carson presented papers display that Turner member even went to a NCAA to get capitulation for denunciation they could use in open announcements in a eventuality of a blackout. At a time, it was referred to as “Turner’s NCAA leverage.”

But Breland pronounced that Turner also stood to remove permit income and some-more remunerative ad dollars during a Mar Madness blackout. It already mislaid “north of $30 million” from a Dish trance a prior year.

Package deal. An emanate in a hearing has been either distributors are forced to take a gold of Turner channels as a cost of removing a many fascinating ones, like TBS, TNT and CNN. Breland pronounced that a channels were accessible on a standalone basis, though concurred that no distributors indeed permit one Turner network.

Consumer data. A 2016 inner email suggested that Turner networks would get entrance to consumer information as partial of an agreement with Hulu. Time Warner owns 10% of a streaming service, that also offers a line-up of channels.

A pivotal motive for a partnership has been that Time Warner will be improved means to contest opposite Google and Facebook for targeted promotion since it will now have entrance to ATT’s consumer data. The DOJ has been perplexing to uncover that this information is accessible elsewhere.

Breland pronounced that Comcast offering to sell set-top box information to Turner networks, though a information was deemed “no valuable” and accessible elsewhere.

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