7 comments on “DISH’s dispute with Griffin (KOTV) & News Corp

  1. I guess I don’t understand the dispute. If Griffin wants Dish to pay them to broadcast their channel and Dish doesn’t want to pay their fee who is at fault? That of course depends on the current fee, but from my understanding TV makes their money from advertising, so logically they want as many eyeballs as possible viewing their channel so advertisers can reap the rewards from spending money on ads with their channel.

    From that standpoint, it seems they should be pleased users would be watching their channel via Dish, or DirecTV, or cable for that matter. Who wants to switch inputs and try to tune in with a new digital antenna?

    I believe most people would just opt to watch channel 2 or channel 8 for news. They may go to the trouble to watch a series or program they really like, but most users will just forget it. Too much trouble. It’s my belief the local channels had best take what they can get, and be happy their channel is carried at all.

    • Mark: “…from my understanding TV makes their money from advertising, so logically they want as many eyeballs as possible viewing their channel so advertisers can reap the rewards from spending money on ads with their channel.”

      I agree, it seems totally logical to me, too. But…

      Last year, did you read about Aereo, the company that gave each subscriber his own individual mini-antenna for local broadcasts?

      “When an Aereo subscriber sits down at the computer to watch a local broadcast, that customer triggers a chain reaction that Aereo carefully designed. After clicking on something to watch, the subscriber fires up an antenna that tunes to that channel. The programming travels through the antenna circuitry to a bank of transcoders, which morph the data from one coding standard to another. From there they hit a remote DVR, a storage drive that delivers the programming to the member’s computer via the Internet and saves it for viewing later.” (from http://www.cnet.com/news/inside-the-tech-that-tossed-aereo-through-tvs-legal-hoops/)

      You might suppose that broadcasters, both local and network, should have applauded this arrangement, since it would extend the reach of their product, with embedded commercials providing the revenue, potentially around the world. (That is, assuming the DVR was not equipped with an effective commercial zapper, and assuming broadcasters had some Nielsen-like way of determining the viewing habits of Aereo viewers.) But they didn’t applaud.

      From Wikipedia:

      “On June 25, 2014, the Supreme Court of the United States ruled against Aereo in a case brought by several broadcast networks. The Court found that Aereo infringed upon the rights of copyright holders. The point of contention was whether Aereo’s business model constituted a ‘public performance’, which would legally require it to obtain permission from the copyright owners of any programs it transmits. The court ruled in a 6-3 decision that Aereo’s business model was no different than that of a cable television provider, despite the differences in technology. …Aereo’s services were suspended on June 28 and the company filed for Chapter 11 bankruptcy on November 21.”

      and crucially, this:

      Cable companies are required by the 1992 Cable Television Consumer Protection and Competition Act to negotiate for retransmission consent, usually paying broadcasters for the right to carry their signals. Broadcasters argued that Aereo was a threat both to their business model, by undermining the cable retransmission fees and the size of their audience. Because the fees cable companies pay for broadcast content can comprise up to 10% of a broadcaster’s revenue, broadcasters object to Aereo’s re-distribution of this content without paying any fees. Broadcasters have also identified Aereo as part of the cord-cutting trend among television audiences that poses a threat to broadcasters’ advertising revenue.

      So, our naive and seemingly airtight logic must give way to the legal requirement for negotiation over payment to broadcasters. The negotiation between Dish and Griffin continues, and the clock ticks closer to 1/15.

      Interestingly, the cord-cutting movement threatens to reduce the revenues of both cable operators and broadcasters, despite the fact that the broadcasters’ product is freely available to anyone with an antenna.

      (I have been using Windows Media Center as a DVR for recording over-the-air programming, and the skip-30-seconds-ahead/back buttons work well when the commercials come on. The TiVo Roamio and other models also have these buttons.)

  2. Young people don’t watch TV anymore anyway. I don’t think they watch the news at all. My 26 year old son watches movies and some sports. I watch channel 6 news, but I really don’t watch a lot of TV anymore and I am 60. I can get my news from the computer, Ipad, cell phone. I will just watch 2 or 8 if I need to watch the news. I guess it all comes down to money. TV is changing and once the older generation is gone, it will not exist as it does today.

  3. From Mediaite: 3 Reasons Fox News Is Big Winner in Dish Network Dispute:

    “When the final gun sounded and scores are tallied up in the dispute between Dish Network and Fox, the only conclusion that can be made is that Dish…got served.

    “As you may have heard, the highly-publicized dispute between the cable news juggernaut and the second largest satellite provider that began on December 20th and ended yesterday was a heated one. Dish accused Fox of extortion. Fox–via its biggest names on Fox News in the form of Bill O’Reilly and Megyn Kelly–said in a YouTube video that Dish was censoring important news.

    “‘They’re censoring what you see,’ said O’Reilly.

    “‘Thirteen years at No. 1, now Dish doesn’t want you to have Fox?’ Kelly asks incredulously. ‘Get back The Factor. Get back The Kelly File.’

    “In the end, according to the Wall Street Journal, Dish has agreed to pay Fox $1.50 per subscriber per month, which is a whopping 50 percent increase from the previous deal of $1.00/per. Dish has reportedly also agreed to place the Fox Business Network next to Fox News in the lower tier service option on its dial, which will help drive more viewers to a channel that could use them. Official terms of the agreement, a five-year-deal, weren’t disclosed.”

    What does this mean for the Dish vs. Griffin dispute? Might we expect to see some displacement behavior from Dish? Or opportunistic behavior from Griffin, based on Dish’s perceived weakness in this outcome?

  4. I spoke with 2 Customer Service reps at Dish, and got the standard “…we are trying to save our customers money by negotiating for the lowest fee increase, which will eventually be passed on to them”. I asked what Griffin was asking for and was told :…quadruple what they are getting now”. Griffin is not releasing any information, so it is not verifiable. As usual, each side is publicly pointing the finger at the other.

    My guess is that Griffin is indeed trying to generate extra revenue, but how will that play with their advertisers, whose ads are no longer being seen by as many potential buyers?

  5. Brewster, I wish I had better information about the substance of the negotiations.

    I’m sure Griffin Communications is unhappy with the current situation: losing the revenue from Dish’s carriage fee, and feeling pressure to give their advertisers lower rates.

    It is true that Dish has been involved in a considerably greater percentage of these disputes than other providers (e.g., cable, DIRECTV, satellite) in the past several years. Maybe providers collectively are trying to bring the situation to a boil in hopes of Congress legislating more to their advantage. Dish’s chairman and largest stockholder, Charles Ergen, is known to be a “take no prisoners” style manager. Or maybe they are driven by a sense of injustice at having to pay broadcasters an increasing amount for a product that is free over the air.

    We know that Dish recently caved to most of News Corp’s demands, notably, paying $1.50 per subscriber for Fox News, Business and other channels (it was $1.00 before, a 50% increase that will undoubtedly be passed along to subscribers eventually). Griffin Communications could not have News Corp’s kind of clout.

    Of Griffin demands, Dish reports “quadruple”; Griffin says that they only ask an amount comparable to the other local network stations. I have seen speculation that Griffin is bargaining for inclusion of KSBI, a recent acquisition of theirs in OKC.

    We know this from the FCC’s fact sheet:

    “Must-carry stations (e.g., educational) are generally guaranteed carriage on the cable system on a preferred channel number. Local commercial television stations have the option of electing must-carry status or retransmission consent status, while local noncommercial television stations may only seek carriage on a must-carry basis.”

    So if commercial stations opt out of taking carriage fees, they are guaranteed unconditional inclusion. Since none of them do this, we may infer that the revenue from carriage fees is substantial.

    We are seeing an on-going series of battles for dollars between big-money entities, with customers as collateral damage. Recourse includes changing providers, putting up an antenna, using the internet, or taking up a new hobby. Ultimately, it’s up to Congress to either redefine the relationship between broadcasters and providers as established in 1992, or just let them continue to slug it out under the old rules.

    If you understand the issues, write your congressmen (or at least comment in this blog; I’d like to hear from you).

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