News Corp. playing hardball in fee fight with Fox TV affiliates; an opening for OTT?

News Corp. is flexing its muscles again--but this time the show of force is aimed at some of its own Fox network affiliates who, after more than nine months of discussions, are still unwilling to fork over some of the retransmission fees they're collecting from pay-TV operators who want access to local signals.

Fox earlier this month told station owners in a letter that "will have to pursue different distribution channels" if no deal is made soon, and said it would pursue direct talks with station owners to resolve the issue.

"Fox's negotiations with our affiliates are a private business matter and as such those discussions are private," Fox spokesman Scott Grogin said.

Affiliates feel Fox already is targeting several of them "to use as examples" by denying them access to its programming, a strategy the network used in its dispute last fall with Cablevision in the New York tri-state area. At the time, Fox also briefly removed its Web content from reach when it blacked out and Hulu content from Cablevision subscribers.

The blackout drew the expected responses, including "serious concern" from Congressman Edward Markey of Massachusetts.

The spat also gave News Corp. and Fox a black eye as officials in the region questioned retransmission and issued not-so-veiled threats about access to the airwaves.

As Forbes pointed out in one article, "The networks' current strategy-block programming while trading barbs with the cable operator in question-may do more harm than good."

At the time, online cable operator ivi TV, which streams over the air signals from stations in four markets, including New York, on the Internet for $4.99 a month, scored a major PR win, and a few thousand subscribers, by offering their service to affected Cablevision subscribers who missed weeks of Fox hits like Glee, NFL football games and part of the MLB playoffs.

For more:
- see this Bloomberg article

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