Cable Operators

Armstrong Offering Free VOD of New Anti-Obama Documentary

Availability of '2016: Obama's America' Sparks Questions, Given Execs' GOP Contributions 10/24/2012 11:40 AM Eastern

Armstrong Cable Services is showing the controversial new documentary “2016: Obama’s America” as a free video-on-demand selection. Given Armstrong’s extensive base in Ohio and Pennsylvania, two swing states in the upcoming election, the MSO’s free offer is triggering controversy, especially since company executives are financial backers of Republican causes and the Mitt Romney campaign.

Armstrong’s latest filing with the Federal Election Commission shows a $1.32 million September “in-kind” contribution, apparently the value of the free VOD offer.

The film, 2016: Obama’s America,  directed by Dinesh D'Souza and John Sullivan, was released theatrically in August. It is described as an exploration of the question:”If Barack Obama wins a second term, where will we be in 2016?" Armstrong plans to offer the VOD documentary through February 28, 2013

An Armstrong executive, meanwhile, told Multichannel News, that the free screenings will probably end in early November, but did not indicate the pricing for the movie after that date. 

Privately-held Armstrong, which serves six states, operates systems in about 50 Ohio communities. Armstrong vice president of marketing Dave Wittmann said the company has been “promoting pay movie VOD very hard” since the service launched in 2006.

“This is just another, new tactic to promote the pay movie category,” he said. Wittmann points out that the current spate of politically centric stories about the free screenings of 2016 comes after the movie had been available for several weeks. He emphasizes that the movie is available on all its systems, although most current coverage focuses on the offer in Ohio.

“This is the first time [we have] offered such a deal for a recently released feature film,” Wittmann acknowledged. Armstrong intends to offer a free new movie each month to encourage VOD use, he added. In November, Armstrong systems will debut a family-oriented, holiday-themed movie for free VOD, he says; the title has not been determined.

In breaking the story about the political angle of Armstrong’s free VOD choice. Wittmann confirmed that some VOD titles, such as 2016, are made available on the same day as the DVD release. This film came out on DVD in late September and is reportedly being shown at churches in battleground states.

Other industry reports indicate that the filmmakers had been seeking a network to carry 2016: Obama’s America, but were unable to nail down any deal for carriage before the election.

Armstrong has not indicated how many VOD views the film has drawn since its on-demand debut in late September. Wittmann told Multichannel News that the movie is “drawing some attention” because it is the first film in the company’s free VOD promotion. He confirmed that it was Armstrong’s “intent to draw attention with the promotional effort but not to alienate customers.” He added that the future handling of 2016 is “open to review at this time.”

In addition to political contributions by its executives,  Armstrong Group, the parent company of the MSO, gave American Crossroads, Karl Rove’s SuperPAC that supports the Romney campaign, $1.32 million in "contribution in-kind cable access" donation in September, according to reports.

The regulatory implications of Armstrong’s free VOD offer are unclear. Michael Berg, a Washington communications attorney who specializes in political media issues, told Multichannel News that the VOD movie may be immune from FCC rules since it comes from a third party – not directly from a political campaign organization. Berg suggested that the free offer may generate scrutiny from the FCC office that oversees political advertising or from the Federal Election Commission. Neither agency responded to calls from Multichannel News.

Berg also suggested that local franchise authorities may look into the issue, although he did not cite any specific policy that would affect the free VOD offer.

Tara Malloy, senior legal counsel at the Campaign Legal Center, told the Pittsburgh City Paper that Armstrong’s move is “unusual.” She noted that the MSO may be subsidizing the 2016 film because VOD typically involves a revenue split between the film’s distributor and the cable operator. She added that Armstrong appears to be within its rights to underwrite such carriage since its role involves the distribution not the creation of the content.

September