CBS Broadcasting and Dish Network have come to terms on a new multiyear agreement, approximately 12 hours after the television network pulled all of its programming from the the satellite service provider's lineup in 17 major cities.
The agreement saw the return of CBS stations -- CBS, CBS Sports and Showtime -- to Dish Network customers in New York, Los Angeles, San Francisco, Dallas, Denver, Boston, Chicago, Pittsburgh, Atlanta, Baltimore, Detroit, Miami, Minneapolis, Philadelphia, Sacramento, Seattle and Tampa.
CBS and Dish didn't disclose the financial terms of the deal, but both parties agreed to drop pending litigation against each other. The agreement covers retransmission fees, the money Dish pays to carry the signals of CBS-owned stations, as well as digital content rights.
The previous contract between the two companies expired on Nov. 20. After two extensions, the failure to come to terms resulted in the CBS blackout. The dispute hinged on Dish's PrimeTime Anytime and AutoHop features, which enable customers to record entire blocks of prime-time programming and then skip, or "autohop," over commercials.
Dish has agreed to disable its AutoHop feature for CBS stations and affiliates during the C7 window, which pays out ad revenue over the seven days after a program has aired live. Essentially, the deal helps CBS claim more ad viewership and demand a large payout from Dish.
"We are very pleased with this deal, which meets all of our economic and strategic objectives," says Ray Hopkins, president of television networks distribution at CBS Corp. "We look forward to having Dish as a valued partner for many years to come."
For its part, Dish received rights to content from Showtime's video on demand. However, the content may only be used inside the homes of subscribers. Showtime is a CBS subsidiary.
"We are pleased to continue delivering CBS programming to our customers, while expanding their digital access to Showtime content through Showtime Anytime," said Warren Schlichting, Dish senior vice president of programming.
Earlier this year, Dish and Disney came to a similar agreement over the AutoHop ability. Dish agreed to block AutoHop for Disney's C3 window, which accounts for ad viewership three days after a program has been aired live.
Thanks to DVRs, the value of ads remains strong days after a program has aired live. By some estimates, the C7 windows cover 90 percent of ad viewership.
While moving from the C3 model, set in 2007, to C7 would only boost programming ratings by fractions of a point, the gains are more pronounced on the ad revenue side of things. Even a 3 percent or 4 percent rise in ad viewership would rake in significant amounts of revenue.
"In the greater scheme of things, 4 percent seems like a trifle," says an ad executive. "But say your C7 conversion gives you a lift of 4 percent across the board. That's an awful lot of money to leave lying around just because you're still working with a compromised metric."
Other channels included in the agreement are the Smithsonian Channel and TVGN.
