For at least the second time in a week, an article in a major daily highlights the business basics of Cable—emphasizing that cable distributors pay cable networks for the right to deliver those channels to their customers, as well as the direct link between increased programming costs and higher cable bills. Last week it was a New York Times column on NFL Network; today it’s an Atlanta Journal-Constitution piece on Fox News (“Fox News Wants More $$ from Cable Operators”). The latest piece notes that the popular news channel is proposing to nearly quadruple the price it charges cable distributors—from an average of 27 cents per subscriber per month to $1. That increase, of course, would ultimately be paid by cable customers. Fox has placed legal notices in Connecticut announcing that the network may be off the local Cablevision lineup if the two companies can’t agree on Fox’s higher license fee demands. Fox is also negotiating with DirecTV. From the AJC:

Some believe Fox is playing an aggressive bit of gamesmanship with its $1 request and will settle for a smaller increase. "Going from 25 cents to a dollar is completely unrealistic," said Derek Baine, an analyst with Kagan Research. Yet honchos at Fox's parent, News Corp., have postured about putting up a fight if they don't get what they want, including the possibility of yanking the channel and unleashing the wrath of the channel's base of vociferous viewers....
The brewing battle highlights a little-seen side of the cable business. Networks typically earn money in two ways: by selling ads and by gathering monthly license fees from cable companies. Networks and cable operators rely on each other yet, at times, have a love/hate relationship.