View Full Version : DISH Warns Subs on Possible Channel Losses
Steve Mehs
12-10-02, 04:20 AM
EchoStar is working through end-of-year contract skirmishes with two programmers, but the company is ready to add another local TV market for its DISH Network service.
During his monthly "Charlie Chat" with DISH Network customers Monday, EchoStar CEO Charlie Ergen said the company is trying to negotiate new carriage contracts with TNT, a Turner network, and New England Sports Network, a regional sports programmer that carries Boston Bruins hockey and Red Sox baseball. The current contracts for the two networks expire Dec. 31.
Ergen said that "at this time we are not overly optimistic" new deals can be hammered out with the two networks before the end of the year. He emphasized that EchoStar is still in negotiations with the two programmers.
On the local TV front, EchoStar will offer a local channel package to its customers in the Spokane, Wash., area beginning this week. Spokane is the 53rd market EchoStar has added to its local TV slate.
As for his company's troubled merger with small dish rival DirecTV, Ergen said it will be an "uphill climb" to overcome government resistance to the proposed combination before its merger partner can exit the deal in January. "There is a very slim chance it will go through," Ergen said.
Given the newly created Comcast cable giant, and with recently-announced rate hikes for cable companies, "We are very confident that we can go out and compete, and put the best product out there," Ergen said.
From SkyReport (http://www.skyreport.com/skyreport/dec2002/121002.shtm#one) (Used with Permission)
Geronimo
12-10-02, 07:15 AM
I think they will sign w/ both. Given the popularity of the Red Sox in NE I would not suggest dropping NESN. They don't need another YES situation.
Scott Greczkowski
12-10-02, 07:20 AM
If they do drop the channels is my bill going to go down from the loss of these two channels? (I doubt it) Of course Charlie never mentions this when he says he is trying to save us money. ;)
jeffcarp
12-10-02, 07:56 AM
If you want your bill to go down with every loss of a channel, then you should also be prepared for your bill to go up with every rise in programming cost. Right now, it doesn't work that way. The providers have a "tolerance" for programming cost increases which they absorb the cost of without increasing customer's bills. At some point, they raise rates.
gpflepsen
12-10-02, 08:45 AM
Conspiracy theorist....
Time Warner Owns TNT...... Time Warner is one of the largest cable operators in the nation... Is TNT being used as a tool to erode Dish's programming appeal?
Interesting thought...
Didn't know that TW owned TNT.
firephoto
12-10-02, 09:59 AM
TNT not being on dish would mean a loss of 8 million possible viewers for TNT right?
Mark Holtz
12-10-02, 10:01 AM
The costs for TNT have gone up because of the NBA and movie rights. There was an article earlier this year that there would be two TNT feeds.... one regular TNT feed without the premiere programming, and a "TNT Plus" with the premiere programming. That way, cable carriers whose contract wasn't up with TNT would be encouraged to pay the higher rates, otherwise some marquee highly-promoted programming would be substituted with other programming. I suspect that they are going for the TNT Plus package.
Scott Greczkowski
12-10-02, 10:06 AM
Time Warner/AOL owns all the Turner Channels as well has HBO and Cinemax.
Jacob S
12-10-02, 12:42 PM
We should find out which TnT they are talking about, cheaper or more expensive one.
Gee, he should just can FX, SciFi, USA, TBS, HBO and Discovery. TNT is one of the more popular cable nets and he wants to can it? He is going to lose alot of people to D* or cable. And now he has to give 600 million to D*, E* is going down the tubes. Now with the possbile removal ot TNT I am 100% going with D*, screw Charlie.
jeffcarp
12-10-02, 01:02 PM
That $600m will have no material effect on you as a customer. Only the shareholders will be effected by that one-time charge.
Where did you hear Charlie say he wants to "can" TNT? Ever heard of a negotiating tactic?
FTA Michael
12-10-02, 02:24 PM
And how did we shareholders react to the news?
DISH stock up is over 10% today. The market thinks that Charlie got, if not a good deal, a better deal than expected.
Maybe it also likes the way he's trying to control costs by threatening TNT with Dish darkness?
jeffcarp
12-10-02, 02:29 PM
I think an immediate 10% stock move reflects the markets relief that the issue is completely dead. It is a small appreciation for some certainty moving forward.
TopCat99
12-10-02, 02:49 PM
TW owns TNT? Where does Teddy fall into all of this now?
Why is it that D* never seems to have trouble negotiating contracts with programmers and that E* is always caught up in some skirmish (YES, ESPN Classic, and now TNT and NESN)?
Geronimo
12-10-02, 04:26 PM
Who said D does not have problems? They dont announce them but that does not mean they dont have them. They have different negotiations strategies.
Originally posted by Geronimo
Who said D does not have problems? They dont announce them but that does not mean they dont have them. They have different negotiations strategies. But it's never gone so far as D* having to remove channels because of negotiations (at least as long as I can remember). Maybe Charlie needs to change his strategies because it seems like they don't work well at times.
Geronimo
12-10-02, 05:25 PM
Well they announced they would---PAX TV. My only point is that we have seen Charlie do all this before. Maybe the channels will go and maybe they won't. But don't take everythjing you hear ina negotiation at face value.
And yes I negotiate for a living so i guess that applies to me too.
I wonder if this type of announcements aren't more directed to TimeWarner/AOL as a tactic to make them think that Charlie is ready to drop those channels unless he gets a better deal. :)
raj2001
12-10-02, 06:59 PM
Originally posted by sorahl
Interesting thought...
Didn't know that TW owned TNT.
AOL-TW also owns CNN/HN, HBO/Max, Toon, TBS and quite a few others.
raj2001
12-10-02, 07:01 PM
Originally posted by firephoto
TNT not being on dish would mean a loss of 8 million possible viewers for TNT right?
And it could also mean the loss of subscribers from Dish too!
Richard King
12-10-02, 08:34 PM
Time Warner Owns TNT...... Time Warner is one of the largest cable operators in the nation... Is TNT being used as a tool to erode Dish's programming appeal?
This is exactly why I am very much against vertical integration in the television distribution markets.
Which leads me to believing....
Even if FCC changes the program access rules to close the loophole Comcast has used in Philly (where its RSN is delivered by terrestial means) and FCC requires Comcast to offer its Philly sports net to satellite providers
Comcast could charge a ridiculous amount for their SportsNet per local subscriber. Neitther provider could carry it if at such an expensive rate. Comcast could charge $5 per month per Philly DMA subscriber. Since Comcast owns the majority of cable systems here (and owns Sixers and Flyers), it wouldnt be an issue for them charging themselves the programming rate increase. But DirecTV and Dish would have to take the rate Comcast offered them or not have SportsNet at all, which is basically whats the situation now. Comcast would still win in this situation even with FCC stepping in requiring Comcast to sell it to the providers.
There are few other cable providers in the Philly market including Urban Works Wade (part of TW) and Service Electric and RCN. But Comcast could discount a deal with them in some other means (probably not RCN as Comcast considers RCN also a competitor). This way Dish and DirecTV cant file suit that Comcast is charging Service Electric and Urban Works a different rate.
As for Time Warner & TNT (which isnt an RSN), their rates are going up (because of programming costs). Other cable companies are facing this by increasing rates. My Comcast here will increase rates for its basic service by atleast $2 this year.
Dish does not want to increase their rates to their subscribers so would rather do without TNT. Dish has TNT in the AT 50 level, DirecTV focuses on a higher package only Total Choice where their margins are higher.
IMO, Time Warner hasnt distinguished TNT enough (from TBS). The movies are commercial ridden and unenjoyable. Yes, TNT has a selection of NBA games, but there is NBA League Pass. The subscribers that want to see the games pay for it. I prefer the sports packages, premium movie packages, where only the subscribers that want the package pay for it. The RSN though should be available to the local subscribers (in some basic package) as local subscribers have an interest or should be encouraged an interest in their local teams. IMO, The RSNs should be rate regulated and should be required to negotiate in good faith (just like how FCC requires broadcasters to do)
TNGTony
12-10-02, 09:48 PM
This vertical monopoly thing reminds me of the ruling (by the FTC or Supreme Court...I forget which) that forced the movie studios to sell off their theaters. It was ruled as unfair practice to have complete control of movie distribution. It stifled competition on ticket prices and it blocked independent owners from getting product. This happened post WW2 era sometime. I need to look up the details.
Anyway, the EXACT same thing is happening now with TV channels. With this continual merger-mania, program makers distribution systems to sell the programming they make to channels they own and distribute to their cable systems and sell to their customers to the exclusion of all end viewers that do not pay their price. This is a monopoly 100%. It stifles competition.
Eventually some one is going to cry foul and force this issue and use the moviehouse ruling (if it was a court case--I think it was) as precedent.
I wonder how long this will take.
See ya
Tony
jeffwtux
12-10-02, 10:17 PM
TNT should be going down in cost not up. Yes, they did sign the new NBA contract, and that's what this is all about, no doubt, but the new contract gives TNT less games not more. AOL and Disney overpaid for the NBA TV deal because they are now addicted to relying on subscriber rates to paying excess costs. The advertising market for the NBA so they seem to think that subscriber rates are a sure thing, and they are wrong. They want us to pay for their stupidity in paying way to much for the NBA TV contract. That is what this is all about. AOL/Disney tried to outsmart Dish and Direct by offering the new NBA TV channel at a reasonable rate to get them to add the new channel which is usually harder than having them keep a channel they already have. Then they overcharge for TNT thinking the Dish and Direct will be forced to take because they'd be afraid of the backlash of dropping a station that people have been accustomed to having. The fact is that TBS has pretty much the same movies at a cheaper price and with ESPN, ESPN2, and the NBA TV channel, they'll have way more NBA games than they did with the previous contract, and they'll get them for a reasonable price. I guess I underestimated Chuck all along. Savy move Chuck.
Marcus S
12-10-02, 10:21 PM
The problem here is that many would bash each other over the head because the other has more channels (the ol, I have more channels than you), followed by "their" wishlist of channels that should be added.. When the wish comes true and the bill comes in, then we hear complaints to high heaven of how evil their provider is.. I do wish there where more alacarte options, then people could complain about their self induced pain, but at least I wouldn't being paying for it.
jeffwtux
12-10-02, 10:24 PM
Charlie has clearly called their bluff and is one savvy poker player. He's not stupid. He can look at the details of the NBA contract and add up the games. The average NBA fan will get more games with NBA TV and losing TNT than they did with the old contract. Plus, coverage on TNT doesn't mean that a game will be blacked out of NBA League pass , unlike local broadcasting, so NBA diehards who subscribe to League pass won't know the difference. WOW, this will easily go down as the best cable/satellite dispute victory ever. Of course, it really isn't because Charlie is so smart, but that AOL TW/Disney were too stupid to overpay for the NBA TV deal. I knew something like this would happen, but not where AOL TW/Disney would be the ones getting shot down.
jeffwtux
12-10-02, 10:27 PM
In that first post I meant to say that the advertising market for NBA games has plummeted.
"Didn't know that TW owned TNT."
"TW owns TNT? Where does Teddy fall into all of this now?"
HELLO? Where have you guys been??? :shrug:
TNT = Turner Network Television
Turner, the son of a Savannah billboard company owner, elevated a mediocre Atlanta local UHF TV station into a super station and went on to become a national and international television phenomenon. CNN and it's indigenous-language international counterparts are viewed in most countries around the world.
All Turner media interests were acquired by Time Warner, which in turn was acquired by AOL to become AOL/Time Warner.
Ted is still very active in the business/media arena, and since his recent divorce from Jane Fonda, has been chasing skirts around the world.
I've heard that one of his pick-up lines is 'Would you like to come up to my penthouse and help me count my money?' :D
"Now with the possbile removal ot TNT I am 100% going with D*"
You're one of the lucky ones. Locally, cable doesn't carry Cartoon Network, VH1, or many other popular stations (though they carry all 10 Discovery channels?!?!?!?!? (of course, that's because they're on the basic part of AT&T's national digital package called HITS). DirecTV is overpriced and hard to get because of Pegasus satellite.
I'm still thinking Pegasus DirecTV is almost a better deal than DISH. If it wasn't a Pegasus area, I'd say DirecTV is definately the better choice here.
Originally posted by Nick
"Didn't know that TW owned TNT."
"TW owns TNT? Where does Teddy fall into all of this now?"
HELLO? Where have you guys been??? :shrug:
TNT = Turner Network Television
Turner, the son of a Savannah billboard company owner, elevated a mediocre Atlanta local UHF TV station into a super station and went on to become a national and international television phenomenon. CNN and it's indigenous-language international counterparts are viewed in most countries around the world.
All Turner media interests were acquired by Time Warner, which in turn was acquired by AOL to become AOL/Time Warner.
Ted is still very active in the business/media arena, and since his recent divorce from Jane Fonda, has been chasing skirts around the world.
I've heard that one of his pick-up lines is 'Would you like to come up to my penthouse and help me count my money?' :D
Nick,
Ted Turner sold all of his TV assets to Time Warner years ago. Part of the deal was that Ted would remain to do some of the day to day duties of running these stations. After the AOL/Time Warner Deal Ted was forced out as even a manager of these stations. The only legacy that remains is the Name of the Stations, all content and channel ownership is Time Warners', Former Turner stations, TNT, CNN, CNN Headline, CNNfn, Cartoon Network, TBS.
John
TopCat99
12-11-02, 12:19 PM
I just bought a 501, and my credit sucks (damn undermployment), so no D* for me. :(
Ironically, the biggest motivator for me to get E* so many moons ago was to get TNT. Go figure...
Jacob S
12-11-02, 12:49 PM
Maybe instead of looking at it as Charlie trying to rip the customers off that we should look at it as him looking after the customer's best interest. I bet he did not want to raise the programming costs the last few times but were forced to by increasing programming costs. Charlie does not want to raise it because of one channel, yet how can one channel raise its rates that much to cause a price increase?
I also think because Direct has more subs that they have more money to absorb costs. This may be why they do not have problems negotiating. Dish does not get as much money as Direct as a whole. If there were a merger then these program pricing would not be as much of an issue, thats one reason Charlie wanted a merger. I doubt that we would have seen much of a price decrease though, the money would have been used to profit the company more.
Originally posted by Zac
"Now with the possbile removal ot TNT I am 100% going with D*"
You're one of the lucky ones. Locally, cable doesn't carry Cartoon Network, VH1, or many other popular stations (though they carry all 10 Discovery channels?!?!?!?!? (of course, that's because they're on the basic part of AT&T's national digital package called HITS). DirecTV is overpriced and hard to get because of Pegasus satellite.
I'm still thinking Pegasus DirecTV is almost a better deal than DISH. If it wasn't a Pegasus area, I'd say DirecTV is definately the better choice here.
Direct's service is simply inferior to Dish's, I switched from Direct 2 years ago and I would never go back to them. Take the word of someone who has had both!
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