It’s looking more and more like a static-filled Turkey Day and, possibly Christmas, for DISH Network subscribers who wish to watch CBS O&Os, select affiliates of The CW and a trio of MVPD-distributed networks. While CBS says it “obviously want[s] to strike a fair deal with DISH as soon as possible — we remain far apart on terms.”
RBR+TVBR OBSERVATION (Full text below, for Members Only): This war isn’t about to end anytime before Uncle Jerry cuts the turkey and we’re all falling asleep from a tryptophan overload. Heck, Little St. Nick may be in dark on Christmas Eve the way these negotiations are going. Yes, retransmission fees are skyrocketing. But, maybe there’s a reason. Thus, we ask why DISH has had such a bad year for new accords? Could bad churn rates and lack of subscriber growth beyond Sling TV be a factor? We say yes.
In a statement released by CBS Wednesday morning, the company noted that “observers of disputes like this are rarely interested in the arguments of either party.”
That would be DISH customers, who have been victims of multiple retransmission fee disputes that have led to the DBS provider pulling the plug — by law — on stations it is not authorized to bring to subscribers.
Having said that, CBS believes “there is one very salient data point to consider in this case.”
CBS has not been pulled off the air by a distributor since November 2014. The provider that yanked the signals? DISH Network, which failed three years to reach a timely deal with CBS.
Since then, CBS notes, it has struck “dozens of deals while DISH has pulled signals of 29 other companies off the air, representing nearly 400 television stations.”
CBS then took a defensive turn, saying that it “has been attempting to advance discussions with DISH since January of this year.”
But, it added that DISH is “desperate to retain subscribers” and suggested that the parties sign an extension.
Why wasn’t that agreed to by CBS? It is something the company has done on other occasions, but only when a resolution is close.
“Unfortunately that is not the case now,” CBS says.
The comments from CBS came a day after DISH released a lengthy statement defending its position in the retransmission fee dispute.
Warren Schlichting, DISH EVP/Marketing, Programming and Media Sales, says DISH and CBS “had been making steady progress in their recent negotiations, and DISH was hopeful that they would come to a mutual agreement to renew carriage of its local stations.”
In that spirit, DISH offered a short-term contract extension to CBS that would include a retroactive true-up when new rates were agreed upon, and would preserve the ability of DISH customers to access the CBS stations while negotiations continued, he says. “The true-up would ensure that CBS was made whole at the new rates for the period of any contract extension,” Schlichting added.
“With DISH willing to grant an extension and a retroactive true-up on rates, CBS had nothing to lose and consumers had everything to gain by leaving its channels up,” said Schlichting. “Instead, CBS chose to turn its back on its public interest obligations to serve viewers.”
CBS’s translation? “DISH is saying it doesn’t believe CBS programming is worth the market rates we are seeking. Yet, they have paid at least one cable network more than double our asking price, for far less than half the ratings. DISH is also using CBS’s three cable networks as an excuse for why they haven’t struck a deal. Yet, they currently have deals in place with a number of other broadcasters that have many more associated cable networks than we do. Above all, it is important to remember that DISH subscribers watch CBS more than any other broadcast or cable outlet.”
While CBS continues “to stand ready to negotiate a fair deal with DISH,” DISH subscribers are able to save $10 per month on their bill by going the over-the-air route. “At no cost, DISH will install an antenna for qualifying customers in CBS markets based on the reception available at their home,” DISH said.
This “solution” could be a long-term bandage for DISH: “As it stands, DISH customers won’t be watching CBS in the days and weeks ahead,” CBS says, adding that DISH “is a $23 billion company that clearly cares more about its profits than the consumer.”
RBR+TVBR OBSERVATION: This war isn’t about to end anytime before Uncle Jerry cuts the turkey and we’re all falling asleep from a tryptophan overload. Heck, Little St. Nick may be in dark on Christmas Eve the way these negotiations are going. Yes, retransmission fees are skyrocketing. But, maybe there’s a reason. Thus, we ask why DISH has had such a bad year for new accords?
DISH, sadly, looks like the loser here. It’s had battle after battle with broadcast TV ownership groups, and Warren Schlichting comes across a bit defiant yet empty with his fighting words. “By attempting to force bundle its cable channels with its local broadcast stations, CBS is using local viewers as leverage to raise rates for channels fewer people are watching,” Schlichting said.
Well, what about NBC, ABC and FOX? And, isn’t that reasonable? Why have a separate deal for cable networks when you can have a comprehensive deal done?
DISH viewership data is used as a defense. Sorry, Warren — this “data” is based on the number of subscribers you have at any given time, and what this microcasm of total viewers actually turns to. You say “on CBS Sports Network, Pop and Smithsonian Channel, average viewership is down more than 10% in the past 3 years.”
So, what’s DISH’s churn rate? What is the average subscriber growth percentage for DISH seen in the past 3 years, minus Sling TV?
We’ll be pleased to review our coverage from February 2017, in which we said, “Churn remains an issue for DISH, just as it does for any subscriber-based audio or video entertainment company. In Q4 2016, the company closed Q4 with 13.67 million Pay-TV subscribers, compared to 13.90 million Pay-TV subscribers in the year-ago period.”
Further, asked by a veteran analyst during the company’s Q4 2016 earnings call if DISH execs could break out Sling TV subscriber numbers, they declined; DISH requested that media not identify the analysts participating in the conference call.
In the fourth quarter of 2016, DISH activated approximately 694,000 gross new Pay-TV subscribers, up from approximately 661,000 gross new Pay-TV subscribers in Q4 2015. Net Pay-TV subscribers increased by approximately 28,000 in the most recent quarter, compared to a loss of approximately 12,000 in the year-ago period. But, how much of this growth is attributed to Sling TV, DISH’s over-the-top “skinny bundle”?
Yeah … exactly.
DISH is in a much shakier situation than CBS, which just spun off CBS Radio, isn’t merging with Viacom anytime soon, and is pretty satisfied with its future — which includes Sling TV “competitor” of sorts CBS AllAccess.
DISH needs a T-Mobile, or other merger partner, to survive.
Meanwhile, it’s giving people in impacted markets free antennas. Seriously, Warren? So you’re saying that people will get DISH so they can enjoy cable TV network programming, and not so they can watch over-the-air local channels? We call BS on you and what you place “value” on. Thanks to Netflix and Hulu and even Amazon Video, the value of a cable TV channel is shrinking — rapidly. Marathons of “The Cosby Show” on Urban One’s TVOne may be good for a while, but c’mon. Then, there are the endless array of channels that likely have fewer viewers than Pop.
Oh, and what about my family settling in for Thanksgiving dinner in Ulster County, N.Y.? If they had DISH Network instead of DirecTV, they’d be screwed. Free digital antennas? Um … they are 85 miles north of New York City. The whole point of cable TV in the 1960s was to bring signals up from Manhattan to the Mid-Hudson Valley and Catskills. A free digital antenna won’t do a darn thing for the thousands of people between West Point and Saugerties, birthplace of Jimmy Fallon.
Consumers don’t care who is right and who is wrong. They are just sick and tired of these disruptive negotiations gone bad.
Get CBS back on DISH, Warren. Or, more customers will ditch the DISH since the value proposition in a world full of OTT choices is smaller than ever.
