Media giants Time Warner Cable (TWC) and News Corporation (NWSA) have settled a scuffle between Time Warner and News Corp.’s Fox TV. Fox stands to receive a per-subscriber payment from Time Warner for the right to carry Fox network programming. As might be expected, Time Warner announced that subscriber rates were going up. Happy New Year.

News Corp., which also owns The Wall Street Journal and the New York Post, has been battling to replace lost advertising with subscriber fees. The company has even gone so far as to threaten to remove all its content from the results of a Google (GOOG) search, instead allowing only Microsoft’s (MSFT) Bing search engine to post search results for News Corp. properties.

Where News Corp. leads, others are sure to follow, especially the broadcast networks. While the company almost certainly did not get the $1/subscriber fee it asked for from Time Warner, it certainly got something, which is more than it got before. So, in the short-run battle between content providers and media delivery services, the content provider clearly won.

But the war has just begun. CBS Corporation (CBS) already receives a fee from cable providers to carry its broadcast programming. Disney (DIS) is sure to seek a substantial re-transmission fee for its ABC network at its upcoming negotiations with cable providers, and NBC, soon to be part of Comcast (COMSA), will be in the unique position of both trying to collect a re-transmission fee and objecting to paying one. Even cable-only networks, like the Food Network and HGTV, are fighting with cable companies for fee increases.

Cable subscribers, on the other hand, have been pushing for “a la carte” pricing, which allows subscribers to avoid paying for cable packages that include dozens of channels they don’t watch. There is also competition for the cable companies from web sites like Hulu.com.

Somehow, this whole dispute seems like deja vu all over again. The example of the music industry appears to have been lost on the networks. When Napster was introduced about 10 years ago, the music business resorted to lawsuits to squash a technology that it didn’t understand. Since then, compact disc sales have tanked and online distribution of music has exploded. The networks, both broadcast and cable, could be making the same mistake.

People are willing to pay for content, but only if it offers something useful and unique. The Wall Street Journal, for example, has offered only a small portion of its content for free, putting the majority of its business news behind a pay wall. Same with The Financial Times.

The New York Times (NYT), in contrast, first offered free access to all its content, and then tried to charge a fee for only some of its content. That experiment lasted about a year or so before the Times pulled the plug.

Sure Google makes money by putting ads on its search results pages, and one can make a solid argument that content providers like News Corp. should share in that revenue stream. But threatening to take the ball and go home because they can’t figure out a way to get paid is self-destructive and, essentially, stupid.

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