Streaming and Cable Deal for ‘The Simpsons’

That’s the 21st Century Fox family, which owns the studio that created “The Simpsons,” (20th Century Fox Television), the network that broadcasts it (Fox), and now the cable network (FXX) that has acquired both cable and streaming rights to the more than 550 episodes.

Terms of the agreement were not disclosed, but a representative of one of the other companies that pursued the package said that the bidding was highly competitive and estimated that the per-episode figure reached $1.5 million to $1.6 million. That would put the value of the deal at close to $900 million.

The 24 seasons of shows that have been completed will begin airing in August 2014. The 25th season, currently in production, will be available the month after.

The rights include not only the exclusive exposure on FXX, which is the new comedy offshoot of the FX Network, but also video-on-demand and streaming rights. By locking up these platforms, FXX can control the way it uses them, while keeping the shows away from competitors. That means, for the foreseeable future, the episodes are likely to contain some form of advertising, and not find their way onto increasingly popular ad-free subscription services like Netflix or Amazon.

The shows will be streamed online by FXNOW, a mobile viewing app that FX Networks plans to introduce soon.

Other companies that most likely would have been interested in the Simpsons package include Turner Broadcasting, on behalf of two of its cable networks: TBS, which mainly offers repeats of hit network comedies, and Adult Swim, which has carved out an identity substantially on reruns of other Fox animated comedies like “Family Guy” and “American Dad.” Both Viacom and NBC Universal were also widely mentioned as potential bidders.

When Gary Newman, the chief executive of 20th Century Fox Television, announced the prospective cable sale in September, he called the show “the greatest television asset of all time,” emphasizing that with 530 episodes completed (and at least one more season of 24 original shows already scheduled) “The Simpsons” could run as a nightly entry on a cable network for more than a year and never have to repeat an episode.

Of course, “Simpsons” episodes have not been locked away in a closet, like prized baseball cards. For two decades, repeats of “The Simpsons” have been widely seen on local broadcast television stations. Every other sitcom hit of recent vintage, from “Seinfeld” to “The Big Bang Theory,” has been made available in multiple sales to broadcasters and cable networks alike. Studios rarely leave such opportunities on the table.

But “The Simpsons” was locked into an unusual — and now vintage — deal. The show was first sold into syndication in 1993. While an enormous hit for Fox, “The Simpsons” always stood out because it was animated. When Fox tried to place live-action comedies adjacent to it, they never really worked.

So the stations paying hefty rights fees insisted on maintaining exclusivity — meaning no sale to a cable network for as long as they were buying new seasons of reruns. “The Simpsons” — with a cast that never visibly aged — kept making new episodes on Fox, and the syndication contracts kept going.

Until now. The studio has finally worked a way to open the cable window, one that has long been estimated to be worth a fortune to a show that already is one of the greatest moneymakers in entertainment history, considering the value that has been reaped from merchandising, a theme park attraction and a theatrical movie.

For the fledgling FXX network, the deal is clearly intended to be a foundation stone. FX, known mainly for well-regarded dramas like “The Shield,” “Nip/Tuck,” “Justified” and “Sons of Anarchy,” spun off its comedy lineup (“Louie,” “It’s Always Sunny in Philadelphia”) in the all-comedy network starting last September.

The results so far have been lackluster. Ratings for shows that have moved from FX to FXX have been nothing close to what they were in the past. In the most prominent example, the late-night talk show, “Totally Biased With W. Kamau Bell,” had more than 300,000 viewers on FX but fell to fewer than 50,000 on FXX and was canceled this week.

Now FX will have a core of comedy programming with the longest track record in television history.

Paying the hefty price has less sting because the money essentially moves from one corporate pocket to another — minus the many millions that will be paid to the profit participants in the show, which include, among many others, Matt Groening, who created the original comic characters, and James Brooks, the famed television and movie creator, who brought the show to Fox 25 years ago.

CBS Returns, Triumphant, to Cable Box

The agreement between the two sides restored the CBS network and its related channels, including Showtime, to millions of cable subscribers largely in three major cities: New York, Los Angeles and Dallas. The outcome underscored the leverage that the owners of important television content, especially sports like N.F.L. football, retain over distributors like cable systems. The looming National Football League season, which starts this week, includes key games every week on CBS.

“It was hugely important,” an executive involved in the negotiation said Monday night. (The executive asked not to be identified because the participants agreed not to offer details on the agreement beyond the official announcement.) Indeed, Time Warner Cable executives had said earlier that a reason the company decided to remove the CBS stations in early August was because of the recognition that it would lose leverage the closer it got to the N.F.L. season.

David Bank, a media analyst for RBC Capital Markets said, “With the content, especially the N.F.L. and CBS being the No. 1 network in the ratings, you just have to believe they are going to win every time.”

The two sides did not release any specific information on the terms of the agreement. They had battled for exactly a month over an increase in fees CBS was seeking for the right to retransmit CBS stations in the three major cities and some other locations on Time Warner Cable systems. Another crucial issue was whether CBS would retain the digital rights to its content, which it wanted to sell to Web-based distributors like Netflix and Amazon.

Executives on both sides acknowledged early in the talks that CBS was seeking an increase to about $2 per subscriber, up from about $1. Separate statements from the chief executives of each company indicated that the outcome apparently tipped heavily toward CBS. Its president, Leslie Moonves, said in a memo to the company staff that the network had secured virtually all of what it was seeking.

“We are receiving fair compensation for CBS content,” Mr. Moonves said. He specifically included not only additional fees for CBS content, but also the retention of the digital rights.

Glenn A. Britt, Time Warner Cable’s chairman and chief executive, conceded that “we certainly didn’t get everything we wanted.”

CBS did make “some minor concessions” to get the deal settled, the executive involved in the negotiation said. The talks extended until 3 a.m. Monday.

In his statement, Mr. Britt said Time Warner Cable ultimately “ended up in a much better place than when we started,” though he did not specify how. He also again pushed for some kind of change in the rule that granted networks the rights to compensation from cable companies for their programming

“The rules are woefully out of date, are the primary reason cable bills are rising,” Mr. Britt said. “We sincerely hope that policy makers heed that call and take action to prevent these unfortunate blackouts soon.”

Time Warner Cable pressed throughout the monthlong impasse after it removed CBS’s stations from its systems for some form of government intervention, from either the Federal Communications Commission or Congress, but none materialized.

While the acting F.C.C. chairwoman, Mignon L. Clyburn, said on Aug. 9 that she was distressed at the standoff and was “ready to consider appropriate action if this dispute continues,” it continued for another three weeks without her intervening. Several media analysts said early in the dispute that the commission’s options were limited because the right of a station owner to seek retransmission compensation was granted in a law passed by Congress in 1992.

Monday evening, Ms. Clyburn issued a statement saying: “I am pleased CBS and Time Warner Cable have resolved their retransmission consent negotiations, which for too long have deprived millions of consumers of access to CBS programming. At the end of the day, media companies should accept shared responsibility for putting their audience’s interests above other interests and do all they can to avoid these kinds of disputes in the future.”

Both sides hurled accusations during the standoff. CBS executives said Time Warner Cable removed their stations unnecessarily (including Showtime, which requires a separate fee from subscribers) and negotiated in a dysfunctional manner, and Time Warner Cable accused CBS of making exorbitant demands and performing a disservice to all Time Warner Cable subscribers by blocking the CBS.com Web site. But the settlement was ultimately a financial arrangement between two partners, one of which had content the other needed to satisfy its customers.

Mr. Bank said that, if anything, the deal may make it easier for networks to press cable and other distributors like satellite systems to squeeze out more favorable fees, without all the noise and recriminations this dispute inspired. CBS quietly renegotiated a deal with the FiOS bundled Internet phone and television service owned by Verizon in the midst of its conflict with Time Warner Cable.

“I think the Verizon deal happening when it did was not helpful to Time Warner,” Mr. Bank said. “It was probably really damaging.”

After a Fee Dispute With Time Warner Cable, CBS Goes Dark for Three Million Viewers

CBS stations went black just after 5 p.m. Eastern time. Both sides then issued statements blaming the other for being unreasonable in the negotiations, which were extended from Monday.

The dispute centers on what are known as retransmission fees, which cable companies have increasingly been compelled to pay to broadcasters, despite vigorous protest. CBS’s president, Leslie Moonves, has been a leader in seeking retransmission fees for broadcasters.

The decision to black out the stations means that Time Warner Cable subscribers will not be able to watch CBS programming until a deal is reached. In the past, subscribers have reacted with anger at such suspensions, but generally because they have missed specific programs. In this case, the summer programming roster does not contain many highly popular shows that might drive a settlement. CBS’s biggest appeal this summer is from the show “Under the Dome,” which will not have a new episode until Monday.

But the network does have the P.G.A. golf championship coming in a week. CBS emphasized on Friday that this week’s P.G.A. event was being led by Tiger Woods, who always draws viewers. And CBS, which broadcasts two soap operas, is also likely to gain support from those viewers.

Further down the road is the N.F.L. season, which might be a driving factor in why Time Warner Cable acted now.

Richard Greenfield, a media analyst who follows the company for BTIG Research, said the cable company was in “a once-in-a-lifetime position” to fight this battle because at the moment it does not face the overwhelming leverage of N.F.L. games and the most popular prime-time shows.

In addition, two top series on the Showtime network, owned by CBS, “Dexter” (which is in its final season) and “Ray Donovan,” are now also off the air, even though customers pay a separate fee for them. Time Warner Cable said it would offer a rebate to Showtime subscribers, as well as access to other subscription channels like Starz.

Time Warner Cable has insisted that the fee increases that CBS is asking for are unreasonable; CBS has argued it provides far more value than many cable networks that require much higher fees. Some reports have said CBS is asking for an increase of about 100 percent, to $2 a subscriber, from $1.

A spokesman for the Federal Communications Commission said that the agency was disappointed that the companies had not reached an agreement. “We urge all parties involved to resolve this situation as soon as possible.”

Despite recriminations on Friday from both sides, the negotiations are expected to resume as soon as Monday. That does not mean a quick settlement is likely, however. Mr. Greenfield said he could foresee CBS’s being dark “six weeks, if not more.” An executive close to the CBS side of the talks predicted 10 to 14 days.

In the meantime, CBS is sending messages on the radio and through other outlets urging viewers to complain to Time Warner Cable. The cable company, for its part, was telling customers to buy an antenna or sign up for Aereo, the new service that offers broadcast signals, and was also urging its customers to watch the missing CBS shows through streaming Web sites.

But for customers with Time Warner Cable broadband on Friday, CBS.com was blocking the streaming of shows, instead posting messages.

In almost every previous showdown over retransmission fees, the cable company’s stand has crumbled in short order. Mr. Greenfield said this time could be different because Time Warner Cable could take steps like appealing to Congress and selling CBS’s channel position to another bidder.

CBS stressed that it had never been taken off the air in a retransmission dispute and that it had not stopped offering extensions to keep the talks going.

Maureen Huff, a spokeswoman for Time Warner Cable, said, “We’ve accepted numerous extensions at this point, but it’s become clear that no matter how much time we give them, they’re not willing to come to reasonable terms.”

Brian Stelter contributed reporting.

This article has been revised to reflect the following correction:

Correction: August 2, 2013

Because of an editing error, an earlier version of this article misstated at one point which company suspended the service. It was Time Warner Cable, not CBS.

CBS in Contract Showdown With Time Warner Cable

That would mean that viewers in those cities involved in such ongoing summer shows as “Under the Dome” and “Big Brother” would not be able to see them if they were subscribers to Time Warner Cable. In addition, the CBS-owned cable network Showtime would probably also go off the air on the systems in those cities, leaving fans of shows like “Ray Donovan” without a way to see the initial showing of new episodes.

CBS executives charged that Time Warner Cable has refused its request to extend the current contract between the parties, precipitating the confrontation. The contract ended in June, and the two sides did agree to an extension that will end next Wednesday. None of the financial terms of the dispute have been disclosed.

CBS’s plan is to create pressure on Time Warner Cable by inciting its subscribers to complain about the prospect of losing CBS programs, and suggesting ways those subscribers can find alternate options to find CBS shows “on Time Warner Cable’s competitors,” as CBS put it in a statement.

The CBS statement also said, “Time Warner Cable is planning to drop the most popular programming in its entire channel lineup because it won’t negotiate the same sort of deal that all other cable, satellite and telco companies have struck with CBS. Time Warner Cable has dropped nearly 50 channels in the last five years. CBS has never been dropped by a cable company before. CBS remains committed to working towards a mutually agreeable contract.”

The move is similar to previous examples of brinkmanship exercised by networks in the midst of a negotiating impasse with a cable company. In several previous instances, cable companies have gone to the point of allowing networks to be blocked on their systems, precipitating outraged complaints from subscribers.

In general, the networks have had the leverage in these disputes because they have programs viewers want to see and those viewers are paying cable companies for the right to watch television.

But cable outlets have shown increasing resistance to demands from network for higher fees for what is known as retransmission consent. Cable companies must gain permission from stations to retransmit the broadcast signal to their subscribers. The fees, once modest, have grown in recent years and CBS has been among the most aggressive of the networks in seeking sizable increases.

Cable Channels Lift News Corp.’s Profit

Net income at News Corporation climbed to $2.85 billion, or $1.22 a share, compared with $937 million, or 38 cents a share, in the same period last year, the company reported on Wednesday. Revenue increased by 14 percent, to $9.54 billion, largely on the strength of an 11 percent increase from domestic television affiliates and a 2 percent increase in advertising revenue at its cable channels, which include FX and Fox News.

News Corporation is expected to complete a split of its entertainment assets and publishing divisions into two publicly traded companies by the end of its fiscal year this summer. But the company’s third-quarter results already read as if they came from two distinct companies, with the publishing assets dragging on overall profits.

That division, which includes The Wall Street Journal, The New York Post and HarperCollins, had a $45 million decrease in operating income compared with the same period a year ago, largely because of weakness at the company’s Australian newspapers. The company’s cable channels reported an increase of 17 percent, or $147 million, in operating income, to $993 million.

FX, with original series like “The Americans,” about Russian spies hiding in plain sight in suburban America, and National Geographic both reported double-digit growth in advertising revenue.

Rupert Murdoch, chairman and chief executive of News Corporation, said in a statement that the company was on track to complete the split. “I am more confidant than ever of the long-term value the separation will unlock for the company and its shareholders,” Mr. Murdoch said.

Earnings reflected $25 million in costs related to the proposed separation, which will create two companies. One will be called 21st Century Fox and will include Fox Broadcasting, FX and the Hollywood studio; the other, smaller company will retain the name News Corporation and will include newspapers and a handful of Australian pay television assets.

The company spent $42 million on costs related to the closure of The News of the World, the British tabloid that was shut nearly two years ago after reports emerged that reporters had hacked into the cellphone of a murdered schoolgirl.

The entertainment company, 21st Century Fox, will face its own challenges. Operating income increased by 15 percent at Fox Broadcasting to $196 million, in large part because the fees cable and satellite operators pay to carry the station nearly doubled. But the network reported lower national and local advertising attributable to declines at “American Idol,” now in its 12th season.

In the third quarter, the company’s movie studio reported $289 million in operating income, up from $272 million last year, mostly because of the success of “Life of Pi.”

News Corporation pointed to a decline in quarterly advertising revenues at Fox News, saying that they suffered in comparison to last year because there were no presidential primaries this time. Still, Chase Carey, president and chief operating officer at News Corporation, said: “Fox News has been a success story second to none.”

The coming Fox Sports 1 channel has garnered attention from Wall Street analysts who expect it to compete with ESPN. Mr. Carey said sports were the “driving force” behind the company’s channels business, but he also said that sports should not “cloud the importance” of Fox News, FX and other channels.

Time Warner Revenue Is Flat, Despite Cable Gains

The parent company of HBO, CNN, TNT and TBS reported revenue of $6.9 billion in the quarter that ended March 31, down 1 percent from the same period last year. Net income grew 23.5 percent to $720 million, or 75 cents a share, compared with $583 million and 59 cents a share in 2012.

“We’re off to a strong start in 2013, making us even more confident in our full-year outlook,” Jeffrey L. Bewkes, chairman and chief executive of Time Warner, told analysts. He specifically pointed to the success of the company’s cable TV business, driven this quarter by an average nightly audience of 10.7 million for the N.C.A.A. basketball tournament broadcast on several Turner channels.

But Time Warner’s legacy businesses continued to lag. Later this year, the company is expected to complete the spinoff of its Time Inc. publishing unit into a separate, publicly traded company. Revenue at Time Inc., which publishes Time, People, Sports Illustrated and InStyle, fell 5 percent to $737 million, reflecting an 11 percent dip in subscription revenues.

Time Inc. eliminated roughly 6 percent of its total worldwide staff of 8,000 in the first quarter, resulting in $53 million in restructuring and severance charges. “We remain very focused on taking costs out of the business,” said John K. Martin, chief financial and administrative officer at Time Warner. Cost cutting, he added, is “an important step in preparing Time Inc. to function as a stand-alone public company.'’

Revenues at the Warner Brothers studio fell 4 percent to $2.7 billion, while operating income increased by 23 percent to $263 million. “Both ‘Gangster Squad’ and ‘Jack the Giant Slayer’ fell below our expectations,” Mr. Bewkes said.

He remained optimistic about the studio’s slate of upcoming films, including “The Great Gatsby” and “The Hangover Part III.” Warner Brothers had a strong television season with “Revolution,” an apocalyptic drama on NBC, and “Game of Thrones,” the HBO fantasy series that averages 13.4 million viewers per episode.

Mr. Bewkes defended CNN under the leadership of Jeff Zucker, the recently named president of CNN Worldwide. But, he said, the channel still needed to evolve from a trusted source of breaking news to a more regularly watched outlet. “CNN can’t just be politics and wars,” Mr. Bewkes said.

He rebuffed questions about whether the HBO Go on-demand app would be made available on an à la carte basis through a broadband connection, making the premium cable channel more like the streaming service Netflix. “We would do it if we thought it was in our economic best interest,” Mr. Bewkes said. “At this point, we don’t think it makes sense.”

The Media Equation: Cable TV’s Shift to Darker Dramas Proves Lucrative

We used to turn on the television to see people who were happier, funnier, prettier versions of ourselves — people like Mary Tyler Moore, or Ashton Kutcher. But at the turn of the century, something fundamental changed and we began to see scarier, crazier, darker forms of the American way of life.

Pinning down a realignment in the zeitgeist is dicey business, but more than a few people might point to Feb. 7, 1999. On that night on HBO, a character named Tony Soprano went with his daughter, Meadow, to inspect a college. It’s an oft-deployed television trope, but this time it came with a mind-altering twist. While at a gas station on the way to the college, Tony spotted a former associate who had become an F.B.I. informant and entered witness protection. In between the quotidian tasks of touring the campus, Tony hunted the man down and used his bare hands to kill him.

Rather than being revolted, audiences and critics began to chatter, and the episode, the fifth in the first season of “The Sopranos,” won an Emmy for outstanding writing in a dramatic series. The rest was television history.

It was not only a profound shift, but a highly lucrative one as well. Built on lush portraits of human pathology, subscription- and ad-supported cable channels gradually became hotbeds of quality and profits, even as broadcast networks withered.

Click on ambitious cable channels now, and you will find a high school science teacher who makes meth when he is not dissolving his enemies in vats of acid (“Breaking Bad”); a successful Madison Avenue advertising executive whose entire life is a lie (“Mad Men”); a forensics investigator who is a serial killer on the side (“Dexter”); and another New Jersey gangster, this one in Atlantic City, who is also very much the family man (“Boardwalk Empire”).

It has been a winning formula, but the execution risk is high. In “Difficult Men: Behind the Scenes of a Creative Revolution,” to be published in July by Penguin Press, the author, Brett Martin, suggests that the manic and dark shows, which were so riveting for audiences, were produced by men — and they were mostly men — who were as tortured and sometimes as despotic as the antiheroes they hung their plots on.

Mr. Martin suggests that there is a fundamental lesson about where greatness comes from. If you want to create original programming, you are going to have to deal with the idiosyncrasies of some very original characters. Artists, and that’s what they were, require a wide berth, even when tens of millions of dollars is at stake.

In this new order, writers suddenly became director-producers, filling their writing rooms with talented cronies, who may or may not have had television experience. Crews would stand by for days while the creators mulled details and handed out freshly printed pages of entire new scenes. Directors, studio executives, even the actors themselves became game pieces in the creator’s effort to build a television version of the universe he saw in his head.

“This isn’t like publishing some lunatic’s novel or letting him direct a movie. This is handing a lunatic a division of General Motors,” one television veteran told Mr. Martin, remaining anonymous presumably because he or she hoped to make more television — and more money — with said lunatics.

What becomes remarkable in retrospect is not just the rise of a new kind of storytelling, but the realization that an entire industry was built and controlled by writer-producers, men who typed for a living. Among others, Mr. Martin recounts the rise of David Chase, the creator of “The Sopranos”; David Milch, who came out of “NYPD Blue” to create “Deadwood”; David Simon, a former reporter for The Baltimore Sun who created “The Wire”; and Matthew Weiner, a “Sopranos” alumnus who conjured “Mad Men.”

E-mail: carr@nytimes.com;

Twitter.com/carr2n

Devices Like Cable Boxes Figured in Internet Attack

The organization most suspected, victims said, was Stophaus, an elusive group of disgruntled European Internet users, although Sven Olaf Kamphuis, its spokesman, denied he was responsible for the attacks. At the same time, he shifted blame to Russian Internet service providers, which he said were retaliating against Spamhaus, a European anti-spam group, for blacklisting them.

But the real enablers of the attack were the operators of more than 27 million computers around the globe who left their equipment wide open to a motivated attacker. Those enablers are not just companies, but regular people with home cable boxes.

“There is a big possibility that you are part of the problem without even knowing it,” said Paul Vixie, chairman of the Internet Software Consortium, a nonprofit company responsible for the software used by many of the servers that power the Internet.

The servers the attackers used — what the Internet community calls open recursive servers or, more commonly, open resolvers — are simply home Internet devices, corporate servers, or virtual machines in the cloud that have been sloppily configured to accept messages from any device around the globe.

Open resolvers have been set up in such a way that they are not unlike the naïve users of public Wi-Fi who forget to turn off their file-sharing settings, so that any hacker on the Internet can creep inside the computer. It’s similar to PC users who do not realize that by not updating their software, they let their computers get infected with malware and used as a zombie in a cyberattack.

The difference is that if you think of a computer as a digital weapon, then an open resolver is a machine gun. Attackers can use open resolvers to amplify the strength of a cyberattack by a factor of 100.

In this week’s attack on Spamhaus and the company hired to fight it, CloudFlare, attackers made use of more than 100,000 open resolvers to inflict an attack that reached 300 billion bits per second, the largest such attack ever reported. When they could not take down those targets, they aimed and fired open resolvers at the world’s major Internet exchanges, first London, then Amsterdam, Frankfurt and then Hong Kong.

“At some point, we thought, ‘They are going to hit everything at once, and that’s when this gets real,’ ” said Matthew Prince, the chief executive of CloudFlare. “That’s the nightmare scenario that hasn’t happened — yet.”

“We’ve now seen an attack that begins to illustrate the full extent of the problem,” Mr. Prince wrote in a blog post.

Closing an open resolver, unfortunately, is not as simple as flipping a switch or downloading some software. Finding out if your home cable box is an open resolver, for instance, requires you to call your cable company and tell them that you do not want to be running an open resolver — a tough request when most of the world’s population does not even know what an open resolver is.

Recent efforts have been made to increase awareness of the issue. Computer security experts have recently started “naming and shaming” the operators of open resolvers. The DNS Measurement Factory, one such group, published a survey of top offenders by network, and more recently the Open Resolver Project published a full list of the 27 million open servers online.

The campaign is making slow progress; thousands dropped off those lists in the last few months.

But Dr. Vixie calls the open resolvers just the low-hanging fruit. Even if they were all fixed tomorrow, there are other types of servers that could just as easily be used to amplify an attack, a fact that hackers are eager to point out.