HBO Fires Back at Dish in Blackout Tussle | Service Providers
HBO leader Richard Plepler on Wednesday issued a reaction to
Dish CEO Charlie Ergen’s declare that the continuing deadlock between the firms was once the results of a purely anticompetitive play on AT&T’s phase.
It was once Dish that dropped HBO and Cinemax alerts at middle of the night on Oct. 31, blacking out programming for subscribers, Plepler stated.
That was once the primary time in HBO’s just about 50-year historical past that any pay-TV provider dropped the top class channel from its lineup.
Negotiations between the 2 firms broke down final week, and in a
Wednesday profits name, Dish’s Ergen blamed the location at the fresh
merger of AT&T with HBO father or mother Time Warner.
AT&T’s aim was once to power shoppers to Dish competitor DirecTV, which AT&T additionally owns.
The sticking level in the heated negotiations was once HBO’s insistence that Dish decide to paying for a minimal collection of shoppers, even supposing some distance fewer in fact sought after
the top class channel.
AT&T sought the contract provision in an effort to reinforce its HBO unfastened for existence providing to DirecTV shoppers, Ergen advised.
The breakdown with HBO was once some distance from Dish’s most effective unhealthy information. The corporate reported its worst quarterly subscriber decline to this point. It misplaced 367,000 subscribers to its
satellite tv for pc provider, and received simply 26,000 subscribers to its Sling TV streaming product.
However, earnings of US$three.four billion for the quarter, in addition to profits, crowned analysts’ expectancies.
Univision Black Out Continues
Besides HBO and Cinemax, high-profile channels recently
lacking from the Dish lineup, come with Spanish-language Univision, which went darkish
in June following a testy negotiation.
Dish subscribers gained
the channel throughout the DishLatino package deal. That breakdown
befell in phase because of Univision making some its programming — particularly
football — to be had without spending a dime by the use of Facebook Watch and different on-line
That lowered the worth of Univision, in keeping with Dish.
For its phase, Univision stated it prolonged an olive department, however that Dish thus far has proven no willingness to go into reverse. That can be a portent of the way the HBO negotiations will continue in the days or even weeks to return.
“Dish has an extended historical past of competitive carriage negotiations with
networks,” famous Brett Sappington, senior director of analysis at Parks
“It has been unafraid to have blackouts, or to do away with channels from
their applications, in the event that they can’t achieve phrases that make sense for Dish,”
he advised the E-Commerce Times.
“Carriage agreements are ceaselessly contentious, however we have now noticed an
escalation in blackout brinksmanship during the last few years,”
Sappington added. “Pay-TV suppliers are already going through declining
subscribership and new cheap on-line choices, making it
tough for them to lift costs. At the similar time, networks
proceed to stand greater prices of their very own.”
More Than Pricing
Dish has had different very high-profile carriage disputes with quite a lot of
content material suppliers. Prior to the continuing HBO blackout, essentially the most notable concerned AMC Networks. It lasted greater than part of 2012. Other
blackouts have concerned MSG, Fox News Channel/Fox Business Network and
Last 12 months there have been regionally-based blackouts over carriage
charges involving CBS Television Stations in main markets together with New
York City, Los Angeles and Chicago, in addition to Hearst
Television-owned stations in 28 markets.
In a lot of the ones previous disputes, pricing was once the core factor, however this
time Dish has maintained that it’s about it being compelled to hold a
minimal collection of subscribers — in essence, subsidizing HBO without spending a dime to DirecTV shoppers.
“Programming contracts are sophisticated, and it is not uncommon for the fee
satellite tv for pc or cable corporate can pay to rely, to 1 extent or
some other, at the collection of subscribers,” defined Stephen Blum, essential analyst at Tellus Venture Associates.
“Without understanding the main points of the contract, it is arduous to inform
whether or not Dish has a sound grievance or now not,” he advised the
E-Commerce Times. “That stated, Dish has a historical past of hardball
negotiations with programmers, and has let channels pass darkish in the
previous once they could not get the deal they sought after at the time.”
In this week’s name, Dish’s Ergen underscored his previous caution that
AT&T’s acquire of Time Warner can be anticompetitive for
customers. A discounted collection of provider suppliers has given customers much less selection, whilst permitting one provider supplier to keep an eye on probably the most maximum desired content material.
“At some level, an operator was once inevitably going to have a carriage
dispute with a Warner community and blame AT&T for anticompetitive
habits,” stated Parks Associates’ Sappington.
“The incontrovertible fact that it was once Dish, which immediately competes in satellite tv for pc and
on-line products and services — and so quickly after the merger — paints AT&T in a
specifically destructive mild, irrespective of the validity of the
declare,” he added.
The query is whether or not Ergen would have had the ones considerations if AT&T had now not insisted on requiring a minimal collection of subscribers, suggesting this might be as
a lot theater as a legitimate fear.
“Dish is attempting to bait AT&T into some type of antitrust declare in
order to get well pricing and phrases,” advised Joel Espelein, president
“I doubt it’s going to paintings. The fact is vendors like Dish
an increasing number of lack any leverage in discussions with content material firms
like HBO and ESPN that may simply pass immediately to customers,” Espelein
advised the E-Commerce Times
This standoff may turn into the brand new “business as usual” between a
pay-TV provider and a content material supplier, however in the quick time period, Dish’s
subscribers are the most important losers. That may change into a longer-term loss for Dish if the ones customers come to a decision to leap to some other provider — corresponding to AT&T-owned DirecTV.
“The trade may not cripple Dish, however it’s going to be painful in the quick
time period,” advised Sappington.
However, HBO and its new father or mother corporate AT&T cannot be noticed as winners
both throughout a blackout.
“In the long run, Dish needs HBO — but HBO needs Dish too,” stated Tellus’ Blum.
“Typically, this kind of carriage dispute gets settled,” he added.
“Not having HBO can be an issue for Dish, however dropping get admission to to Dish
families is a good larger drawback for HBO, and whilst ‘cripple’ is a
robust phrase for it, each firms can be harm if a deal is not
reached,” defined Blum.
Given that there are actually numerous techniques to get HBO — in addition to different
products and services — the blackout may simply serve to embolden extra audience to
turn into cord-cutters, and in this regard Dish has extra at stake than
“Dish nonetheless wishes HBO — that a lot is plain, however why does HBO want
Dish? Answer — they do not,” maintained Corum’s Espelein.
As HBO is owned by way of AT&T, it will melt the blow if customers will have to decide
merely to chop the wire totally as a substitute of switching suppliers, however it’s unsure in the long term that AT&T would need to possibility hastening the decline of the standard
“If the blackout is going on for various weeks, it will have
important penalties for HBO and Dish,” said Blum. “For now,
despite the fact that, it is industry as standard.”
Peter Suciu has been an ECT News Network reporter since 2012. His spaces of center of attention come with cybersecurity, cellphones, presentations, streaming media, pay TV and independent cars. He has written and edited for a large number of publications and internet sites, together with Newsweek, Wired and FoxNews.com.