Almost three years after a short-lived blackout, DISH Network Corp. and CBS Corp. have disconnected again.
The contract between the programmer and satellite distributor expired at 11:59 p.m. MT on Nov. 20, resulting in the loss of CBS (US) owned-and-operated stations and CBS-owned The CW (US) stations, as well as CBS Sports Network (US), POP (US) and the Smithsonian Channel (US) for DISH Network subscribers. CBS' premium network Showtime is not part of the negotiations.
The same parties previously disconnected for about 13 hours Dec. 5, 2013, before reaching a multiyear agreement the following day.
This year's negotiations center on valuations for retransmission-consent fees for the stations and monthly licensing fees for the cable networks. Sources familiar with the discussions say they pertain to securing carriage for CBS stations on Sling TV, DISH's virtual streaming service.
CBS, which had previously indicated that negotiations have been going on "for months," pointed to the DBS provider's history of engaging in contentious carriage negotiations.
"Since 2013, DISH has dropped the signals of 29 different companies, representing nearly 400 television stations, clearly indicating that these tactics are commonplace for them," CBS said in a statement. "This particular dispute is yet another example of the company punishing its subscribers instead of negotiating a fair carriage deal that reflects the current marketplace."
DISH said CBS chose to black out its subscribers' access to 28 local channels in 18 markets, with the programmer rejecting an offer to extend the contract to continue negotiations. DISH said CBS is seeking retransmission-consent and carriage fee increases, even as the broadcast network's average viewership was down 20% over the past three years, and the satellite provider's audience for CBS Sports Network, Pop and Smithsonian Channel declined more than 10% over the same span.
"CBS is attempting to tax DISH customers on programming that's losing viewers, tax DISH customers on programming available for free over the air, and tax DISH customers for content available directly from CBS," said Warren Schlichting, DISH executive vice president of marketing, programming and media sales in a statement. "Our customers are clear: they don't want to pay a CBS tax."
Losing access to entertainment fare on the nation's most-watched broadcast network aside, DISH subscribers, if the current dispute lingers, could miss out on a holiday weekend packed with football programming. CBS will air the Thanksgiving NFL game between the Dallas Cowboys and Los Angeles Chargers and a pro football doubleheader on Sunday, Nov. 26. College football action is also on the schedule Friday, Nov. 24 and Saturday, Nov. 25, including the "Iron Bowl" battle between Alabama and Auburn that will determine the western division champion of the Southeastern Conference, with the winner looking to secure a spot in the College Football Playoff.
DISH said that as it continues to pursue a new carriage contract, it is offering digital over-the-air antennas so that customers in affected markets can watch CBS' local broadcast channels for free.
CBS-owned stations impacted by the blackout serve New York, Los Angeles, Chicago, Philadelphia, Dallas, San Francisco, Boston, Detroit, Minneapolis, Miami, Denver, Sacramento, Pittsburgh and Baltimore. CBS-owned CW stations in such DMAs as Atlanta, Philadelphia, San Francisco, Tampa and Seattle are also impacted by the dispute.
A prolonged blackout with CBS could result in subscriber losses for DISH.
With hurricanes wreaking havoc in the Caribbean, DISH proactively removed 145,000 Puerto Rico and U.S. Virgin Island subscribers from its customer count, reporting a total pay-TV subscriber figure of 13.2 million for the third quarter, a total that includes an estimated 1.7 million Sling TV subscribers. This is down from a total pay-TV subscriber figure of 13.3 million in the second quarter.
Excluding the impact of Puerto Rico and the U.S. Virgin Islands brings the company's third-quarter traditional multichannel subscriber losses down to 222,000, implying a net pay TV customer gain of 16,000 when combining its DBS and streaming results.