* TW Cable, Disney talks made "significant progress"
* TW Cable wants comparable deals to Disney-Apple talks
* TW Cable balks at payment for ESPN3.com
By Yinka Adegoke and Alex Dobuzinskis
NEW YORK/LOS ANGELES, Aug 29 The growing
availability of popular TV shows on the Web is at the heart of
ongoing contentious programming fee negotiations between Walt
Disney Co (DIS.N) and Time Warner Cable Inc TWC.N, according
to a person familiar with the discussions.
If the agreements are not in place before midnight on
Wednesday, millions of homes in major cities like New York and
Los Angeles could see their local ABC broadcast, ESPN channels
and some Disney channels go dark.
Both sides said in a statement early on Sunday they had
made "significant progress" in their negotiations, but a deal
is yet to be inked.
The progress was in part an agreement to cool off on a
barrage of hard-hitting adverts such as Disney warning
customers to switch to satellite operators DirecTV DTV.O and
DISH Network (DISH.O) or phone company Verizon Communications
(VZ.N) -- which has also ran a separate campaign.
While programming fee negotiations are always about how
much the cable operator might have to pay to keep carrying the
programmer's networks, these latest talks between Time Warner
Cable and Disney have been further complicated by issues such
as competition from online video services like Apple TV and
Netflix Inc (NFLX.O) and retransmission cash fees for the ABC
With reports last week that Disney is in advanced talks
with Apple Inc (AAPL.O) to make some of its current shows
available for a rental fee of 99 cents, Time Warner Cable
executives believe they should be offered comparable deals or
even for free through its video-on-demand service, said the
person familiar with the discussions.
Time Warner Cable has also balked at Disney's request to
pay a fee for ESPN3.com, a sports website which carries some
live events online but is only available to the broadband
customers of its cable operator partners.
Bloomberg reported last week that Disney was looking for
around 10 cents a customer each month. Time Warner Cable has
9.2 million broadband customers. ESPN3, which carried some
World Cup matches earlier this summer, already has a deal in
place with larger cable company Comcast Corp (CMCSA.O).
Time Warner Cable has negotiated an online programming deal
before with Fox for its Speed2 channel online as part of the
latest round of negotiations in December.
The discussions over retransmission fee for ABC is less at
the forefront compared with previous battles with News Corp's
(NWSA.O) Fox. Cable operators have become more accepting of the
principle of paying to carry free-to-air broadcast signals on
their cable systems.
If the talks fail it will hit Time Warner Cable homes that
carry ABC in New York, Los Angeles, Raleigh, North Carolina,
Houston and Toledo, Ohio. It would also hit six ESPN networks,
ABC Family, Disney Channel, Disney XD and SOAPnet.
An outage would also affect homes served by closely held
Bright House Networks which serves Tampa and Orlando, Florida,
as well as several other smaller metropolitan areas.
Time Warner Cable negotiates some programming deals on
behalf of the much smaller Bright House.
Both Disney and Time Warner Cable say privately they expect
the negotiations to go to the wire as they often do, with a
possibility of a last-minute deal or at least an extension in
order to avoid disrupting customers' viewing.
But channels have gone dark before in recent programming
Earlier this year, ABC went off the air for several hours
on Cablevision Systems Corp CVC.N only to return 12 minutes
into the live Academy Awards ceremony telecast after an
agreement was reached.
Both Time Warner Cable and Disney will be keen to avoid the
public relations and consumer backlash that could come with a
programming blackout hitting many more millions of homes than
"We are committed to reaching a fair agreement so Time
Warner Cable subscribers can continue to enjoy our wide array
of services," said Charissa Gilmore, spokeswoman for Disney-ABC