By RON FRIEDMAN
Those who want to switch their multi-channel television service provider or simply want to reduce their expenditure on entertainment have a week to take advantage of a regulatory allowance that lets them disconnect from their service without having to pay a cancellation fine.
In December, both providers, HOT cable and YES satellite, announced they would be canceling their broadcasts of the family-friendly - but largely unpopular - drama film channel Hallmark after NBC Universal, which owns Hallmark, decided to pull it off the airwaves due to lack of revenue. According to the regulations of the Council for Cable TV and Satellite Broadcasting, any time a service provider decides to remove a channel from their listings, customers have the right to cancel their subscription, provided they cite the removal of the channel as the reason.
The channel went off the air on December 28, and HOT and YES customer service representatives suddenly started receiving thousands of calls from customers asking to cancel their subscription because of the so-called "Hallmark clause."
Now customers have until January 9 or 12 to cancel their subscriptions to YES or HOT, respectively. The losses to both companies are expected to be in the millions.
Both have come out sharply against the Council for Cable TV and Satellite Broadcasting, saying its head, Nitzan Chen, has robbed them of business. Though the companies are refusing to comment on the move, industry insiders say they are considering filing for damages.
The turmoil comes at a critical time for both firms. With competition rife and the market nearly saturated, they would much rather focus on producing content and attracting new customers than spending resources on cancellations.
HOT is currently adjusting to a shift of power in the ranks of its ownership. Over the course of 2009, French investor Patrick Derhi bought up shares of the cable television provider and with 45 percent of the stock, is now the largest shareholder, ahead of Yediot Aharonot owner Arnon Mozes (17%) and media and real estate tycoon Eliezer Fishman (15%).
Derhi has said he wants to see HOT reduce expenses in the engineering and content departments and has brought in several of his own people to sit on the board of directors. The firing of HOT's vice president in charge of content, Karni Ziv, is only the most high profile of a long list of expected terminations.
At YES, things are slightly better and 2009 ended on an optimistic note, with the announcement that the company had passed the 570,000-subscriber mark. But YES is still struggling to balance its books and once again finished the year in the red.
Both companies are dreading the prospect of the long-awaited state reform of the industry ending up being canceled, denying them the right to broadcast advertising on their channels. The reform, which is meant to better regulate the volatile television sector, is currently in danger of falling apart as Finance Ministry officials are tangling with lawmakers who want to introduce changes to the reform.
Late last month, Knesset Economic Affairs Committee Chairman Ophir Akunis (Likud) said he wanted to remove the clause that allows HOT and YES to broadcast commercials because of the effect it might have on the commercial television networks, Channels 2 and 10.
For those who feel they don't need hundreds of channels and interactive services on their television, a new service is now available. Using Digital Terrestrial Television technology, consumers can now receive Channels 1, 2, 10, 33 and 99 (The Knesset Channel) in digital quality for free after a one-time purchase of a special converter.
Television companies are also threatened by the Internet, with more and more shows being streamed online, viewable on personal computers and even on mobile phones.
According to the Central Bureau of Statistics, 65% of Israeli households own subscriptions to cable television or satellite service providers. In a study compiled to mark the International Day of the Child, the bureau discovered that households with children were 15% less likely to have a multi-channel television provider than those without.
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