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Fox / Newscorp channels possibly suspended Nov. 1/Now resolved

Discussion in 'DIRECTV Programming' started by Pepe Sylvia, Oct 20, 2011.

  1. Oct 22, 2011 #301 of 1258

    ChicagoBlue Godfather

    Apr 29, 2011
    With all due respect, this is way off the mark.

    HBO, ESPN, CNN, FOX, Viacom, A&E Networks, Comcast sports networks and on and on and on are all increasing every year. They all have elevator escalations in their contracts which automatically add cost each year.

    I guarantee you DTV's costs (or ACPU) is over 10% this year. Guarantee it because it is with all MSOs right now. More than likely it's been up at that level or higher the last few years. This is why you see Dish going to war with Disney and ESPN and FOX, or why TWC went to war with ESPN, and on and on.

    The MSOs know the prices they are charging are at the limit of what customers can absorb, but the programmers keep hiking the rates. DTV like others are putting their foot down.

    Will they lose subscribers? Of course. Is it worth it? YES. They don't really have much of a choice for the long term viability of their companies. 5% increase is understood. 40%? That's ridiculous. Plus you have every other programmer watching and if FOX gets 40%, they'll want 40% or more. The cycle never ends.
  2. Oct 22, 2011 #302 of 1258

    Mariah2014 Breaking the mold

    Apr 21, 2006
    Phoenix Metro
    We also chose to leave Comcast due to a lack of content and or the problems with some of the content they were offering. As these things continue the way they are, I will start really consider Dish Network. Atleast, there costs are lower for their programing. If I'm going to get less, then I should pay less. I already dropped Fox Soccer plus because they are going to collect 15 dollars from you rather they have the channel or not right now.

  3. Oct 22, 2011 #303 of 1258
    Tom Robertson

    Tom Robertson Lifetime Achiever DBSTalk Club

    Nov 15, 2005
    Very good point.

    Digging a bit deeper into the details, almost all contracts have builtin increases through the life of the contract. So the next contract should not need a major increase to "make up" from the life of the previous contract.

  4. Oct 22, 2011 #304 of 1258

    ChicagoBlue Godfather

    Apr 29, 2011
    If you are a former DTV employee, your comments strike me as odd. DTV is known throughout the industry of almost never pulling down content. Versus was an exception. When DISH went to war with FOX this past year, the FOX channels were off the air for 29 days. That has not been DTV's m.o.

    You pay them $220 a month, but I'll bet the average customer bill is $85 I believe. That means each year when a pricing increase comes up, it further burdens those customers. If DTV wants to contain costs, it has to look out for that segment of customers as well. You're the exception as you want everything and will pay for it all, but that's not how most customers see it. They get a $4 increase on their bill each year and they blow a gasket, churn off the platform, etc, etc.

    For every one of you that is screaming about lost content, there are millions more screaming about price increases and pretending not to know why. Thy why is extortion from companies like FOX and others that are demanding 40% increases.
  5. Oct 22, 2011 #305 of 1258

    ChicagoBlue Godfather

    Apr 29, 2011
    True, but that's not how these contracts worth. They have built in escalator clauses already each year that add cost.

    For example

    year one $0.45
    Year two $0.52
    Year three $0.59
    Year Four $0.68

    You get the idea. Almost all contracts in this industry are this way. Most contracts are not 10 years, either. They are typically 3 to 5 years. Sometimes longer, but rarely because neither side wants to do a deal like that.

    This is why you will see a situation where a "hot" channel cuts a deal with a programmer but in 3 or 4 years the channel is not that hot anymore. When those deals are up, MSO's can't wait to part with them because the cost doesn't justify the value of the channel, especially when all the escalators are built in. See G4 as a classic example of this.
  6. Oct 22, 2011 #306 of 1258

    ChicagoBlue Godfather

    Apr 29, 2011
    Based on what has happened with FOX and many other MSOs, I'd say the odds are high.

    DISH was just the latest, but hardly the only one.

    This is why your prices go up every single year

  7. Oct 22, 2011 #307 of 1258

    makaiguy Icon

    Sep 24, 2007
    Aiken, SC
    You don't get it. If they just accept a hefty price increase from Fox, then that raises the bar for each other programming provider when their contracts come up for renewal. If we need to lose some stations for a few days to show the providers DTV's serious and keep this escalation from kicking into high gear, then so be it.

    They do have your back, you just don't realize it.
  8. Oct 22, 2011 #308 of 1258

    mreposter Hall Of Fame

    Jul 29, 2006
    One of the challenges with the current business model for pay television is that it's difficult for customers to understand the true cost of the programming. All most people see and understand is the final monthly bill. How can we judge the relative merits of having any particular channel in the lineup without having some idea of the cost of that channel?

    By essentially hiding the cost of channels, it only further encourages channel owners to try and drive up the price. And when there's a threat that a channel might be dropped, the logical customer reaction is to be angry at Directv for taking it away.

    As another example, I would dearly love to have every channel on Directv in HD if it's available from the provider in HD. (surprise, surprise, i've made the same request in the hd anticipation thread...) But as a customer how am I supposed to judge the reasonableness of this desire unless I know the true cost of that demand?

    I'm not saying that al a carte is the answer, but if pay tv prices continue to outpace inflation, customers will increasingly look for alternatives.
  9. Oct 22, 2011 #309 of 1258

    ChicagoBlue Godfather

    Apr 29, 2011
    I can tell you as someone who has negotiated these deals before, disclosing the costs will be the last thing the programmers will want done and language in the contracts explicitly prevents DTV or others from doing it.

    DTV and the other MSOs are definitely caught in the middle on this stuff, no question about it. They will get blamed either way. Either they stand up to FOX and people who want the Fox channels scream. Or they give in to their demands and raise your rates even more than usual and people scream.

    Going a la carte will actually cost the consumer MORE and you will receive LESS. It's simple math. There's a reason why it hasn't been done even though people have talked about it for 20 years, because the math doesn't work.
  10. Oct 22, 2011 #310 of 1258

    jmpfaff AllStar

    Dec 12, 2004

    I envision an a la carte system functioning where service providers (DirecTV, Dish, Comcrap, AT&T, etc.) charge a set base fee for service, an equipment fee, and a markup (10-30%) on top of what the content provider charges.

    The service providers compete via features and the markup. Which eventually will likely drive the markup close to zero and make equipment features the only differentiator. (At least for the first 2 years of a subscribers contract, markup may go back up after 2 years)

    I'm not sure I understand how this results in me paying more to get what I am already getting...and I can see where it would result in people who don't want ESPN and FOX Sports paying a heck of a lot less.

    The interesting part of this to me would be seeing what happens to all of the channels. I'll tell you right now that I would buy some AM21s and not "subscribe" to my locals. And I bet I would drop about 40% of the channels I currently get. And I would expect that to result in a modest total savings (which I probably reinvest in higher end equipment).

    But if 33% of current cable channels went out of business....wow, that would be weird. And could our local broadcast channels afford to keep their news operations if they weren't extorting money from DirecTV and Dish?!?
  11. Oct 22, 2011 #311 of 1258

    RML81 Legend

    Jul 3, 2011
    Would I be correct in presuming that if Directv drops the channels in question then News Corp. would lose advertising revenue because they would have to revise down their number of potential viewers by around 20 million?
  12. Oct 22, 2011 #312 of 1258

    1948GG Icon

    Aug 4, 2007
    I knew that somewhere around this the ala carte question would come up; of course, it can't be truly that because lots of channels are parts of 'conglomerates' (like FOx, or Viacom, or MTV Networks), but even if it's a 'group' of channels, it can still kinda be ala carte.

    And by the way, since it appears nobody is 'paying attention' to the competition, Comcast Digital Cable is in fact moving exactly in that direction, splitting up it's channel 'packages' into much smaller 'grouplets' that folks can pick and chose to 'bundle' into their own specific package, each 'grouplet' costing x and adding together to achieve a total bill.

    Now, that is the way that DirecTV (and DISH for that matter) should have headed to a LONG time ago, as they had the infrastructure to make it possible. Cable, until the advent of fully digital systems, didn't until now. Now they have and boom, that's what they're doing (at least around me).

    BTW, it must be the water around here in the NW that maybe gets us folks thinking the say way, litzdog911. What, it took 10+ pages of comments before that got brought up....?
  13. Oct 22, 2011 #313 of 1258

    TBoneit Hall Of Fame

    Jul 27, 2006
    I blame the entire mess on Greed. With regards to sports I blame players salaries. Followed by ESPN and Fox for example paying to much for the content. Then to a lesser extent sports fans that say I don't care what it costs, I want it. I think Fox and ESPN see that sort of comment and felt that they can charge whatever.

    I hate to say this, It maybe time for the Government regulators to step in on this sort of inflationary conduct.

    If my TV bill were to go up 40% I'd be switching to whatever I could get over the internet and via OTA and Netflix. I ended up watching Castle via a 720 by 480 SD recording from Basic cable last week due to a new roof knocking out satellite reception for 1.5 days.

    It looked fine, it filled the screen since I recorded off of the HD Basic Cable feed. Was it HD? No. But it looked as good as any DVD and that is good enough to live with. Do I need to watch it the same night it comes on? No, I only care to watch in order they broadcast in.

    Remember that you will have a Two year commitment if you go to Dishnetwork. If you go to cable you can suspend your DirecTV for 6 months per year.

    At some point Burger King would lose so many customers they would have to drop prices lower. I can see that happening with Cable and satellite too.

    What would you have to drop if prices for your service went up even 20%.
    I suspect that recently both Dishnetwork and Cablevision caved to Fox on the price increase. Maybe not 40% and it can only get worse in the future as other providers look at Fox and how they make out.

    The answer may be making locals optional and offering integrated OTA tuners and low cost OTA antenna solutions and in effect telling Fox to *)&% off.
  14. Oct 22, 2011 #314 of 1258

    sigma1914 Well-Known Member DBSTalk Club

    Sep 5, 2006
    Allen, TX
    The Comcast channel packages "ala carte" aren't the biggest money savers when you actually look at them and what they offer. Same with Time Warner's "TV Essentials" package. 2 of the 3 markets testing the Comcast method require you to have the bundled Triple Play just to be eligible.
  15. Oct 22, 2011 #315 of 1258

    phrelin Hall Of Fame DBSTalk Club

    Jan 18, 2007
    You are correct about those dates. According to a Variety article:
    DirecTV has 19+ million subscribers. That places it second only to Comcast with 22+ million. Because of its broad media involvement subjecting it to significant regulatory review, Comcast will never be as free as DirecTV to aggressively engage another owner of a group of channels.

    For those that don't remember it or weren't aware of it, as explained in this New York Times article a major battle between Time Warner Cable (essentially tied for #3 with Dish in totals subscribers) and the Fox O&O broadcast stations at the end of 2009 created such turmoil about sports programming that members of Congress actually started getting involved.

    Many felt Time Warner ended up giving away the store. But according to Wikipedia: "It was later revealed that the terms of the Fox contract allows the network to be directly carried in the event that the local Fox affiliate cannot reach a retransmission consent agreement with Time Warner Cable."

    If that is true, it puts some affiliates in the position of having News Corp say "pay us $1 per subscriber or else" but we've agreed to undercut your bargaining position with the local cable company.
  16. Oct 22, 2011 #316 of 1258

    rrdirectsr Legend

    Jan 30, 2011
    You are correct but it would be more like 50 million since they have more than 1 viewer per account / household.
  17. Oct 22, 2011 #317 of 1258

    n3vino Godfather

    Oct 2, 2011
    A la cart sounds good but is it? For example: Looking strictly at HD, I got the choice extra package because I wanted NatGeo. But along with it, along came other channels I'll never watch. In addition, why do I need to pay for MTV, BET, and a lot of other channels that I'll just block out of my guide?

    I'm paying for a bunch of channels that I probably will never watch, because they are in SD, not to mention, I don't care for their programming. I usually set my guide to HD only. All those religious channels, shopping channels and cooking and garden channels I can do without.

    It would be nice if we could get credit, from the price we pay now, for eliminating a lot of those channels. But that's not what they do. They'll charge you for the ones you want to watch and wind up paying more. Breaking it into smaller packs, as has been suggested, will still come with a lot of channels that won't appeal to some viewers.
  18. Oct 22, 2011 #318 of 1258

    Araxen Icon

    Dec 18, 2005
    Hopefully Directv sticks it to them. I can live without those channels for a few weeks if it keeps my bill down over the long haul.
  19. Oct 22, 2011 #319 of 1258

    camo Godfather

    Apr 15, 2010
    My understanding this is a 40% increase over a 10 year old contract. I don't like it but it's not that outrageous. What was Direct charging for there tier packages 10 years ago compared to now?
    Plus it looks like Directv is the bully pulling the plug early and crapping on there customers. Fox has offered to extend the contract under current rates but Directv has refused and is pulling the plug November 1.
    Like it or not Directv is looking at profit margins just like Fox and using consumers as the pawns to get their way.
  20. Oct 22, 2011 #320 of 1258

    tomcat11 Mentor

    Aug 5, 2006
    If they don't settle this Come Nov. 1 maybe we should just unplug all of our receivers and call customer service continueously until they get the deal done.

    I'm all for having a business that makes a reasonalble profit and I don't mind paying for something of value and quality but we are already getting squeezed. Time to squeeze back.

    Maybe they could save the difference by cutting out the BS nobody watches. This is just a game of greed and you loose everytime.

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