Dish Network subscribers in certain markets who are tuning in to the latest The Big Bang Theory or NCIS episode may be surprised to find that CBS has pulled out several of its stations from the satellite TV provider.
Millions of Dish customers in New York, Los Angeles, Dallas, Boston, Chicago and nine other markets in the United States will be affected by the blackout of 14 CBS stations until both companies reach a new agreement. For now, 14 CBS stations have gone dark in these markets as well as another dozen stations by the CBS-owned CW Network. In some markets, viewers have also lost access to CBS sports programming, including NFL football games.
Both companies have been in months-long contractual negotiations, but several issues concerning retransmission fees finally brought the two parties to a standstill on Dec. 5. CBS accuses Dish of "dragging its feet" over the negotiations, as it appears the distributor is not showing a sense of urgency in the negotiations.
CBS is essentially asking for higher distribution fees for Dish to continue carrying CBS television stations. Additionally, both companies are involved in a tussle over Dish's new Hopper digital video recording service, which allows viewers to skip over advertisements.
"What CBS seeks is appropriate compensation for the most watched television network with the most popular content in the world, as well as terms that reflect the developing digital marketplace," CBS stated.
Dish, however, has been aggressively pushing back. Not only is the satellite TV provider against paying higher fees; it is also asking for more rights to offer CBS channels to its Nutv online service. Dish has, in fact, already struck deals with major programmers, such as ABC's Disney and Scripps, and it is likely that it will be able to secure an agreement with NBC programming, thanks to the conditions imposed on the Comcast merger.
"When you start having your product being available from a lot of different sources, customers don't want to pay for it twice," says Dish chairman Charlie Ergen. "Mathematically, we're probably not going to be able to carry all the 10 major people long term and -- because we just don't want to raise prices to $100 a month, right? And so when you do that, somebody is going to drop off."
CBS is not likely to give in, however, especially because the broadcaster also has its own online TV service called CBS All Access, which charges subscribers $5.99 for on-demand programming. Although CBS All Access does not offer CBS sports programming, some paid TV providers believe the service can challenge their current strong market positions.
Ergen once said that CBS All Access made CBS offerings a tad "less interesting."
If history is an accurate portent of what things are to come from the fallout, Dish is likely to lose more than CBS if the blackout is allowed to continue. In 2013, Time Warner Cable lost some 300,000 customers after the cable provider stopped offering CBS programs for an entire month. Dish has already lost 12,000 subscribers in the last fiscal quarter and can no longer afford to lose even more.
Spats between broadcasting programmers and TV providers have increasingly become more common over the years as broadcasters look to charge higher retransmission fees to cover the rising costs of programming, while paid TV companies attempt to push back the fee increases for fear of subscribers cutting the cord and opting for online TV providers such as Netflix and Amazon.
