Denver’s Ch. 4 among 28 CBS stations blacked out

Breakdown in negotiations impacts U.S. customers of Douglas County-based provider

CBS stopped broadcasting its channels to Dish Network customers first thing Tuesday morning after negotiations for a new contract went awry.

The blackout impacted viewers of Denver’s Channel 4, as well as 27 other CBS stations nationwide. According to Douglas County-based Dish, the issue is — again — the higher price that Dish must pay CBS in order to offer the local network to a declining base of subscribers. But also at issue is that CBS wants Dish to carry not just the local channel, but also CBS Sports Network, Pop and the Smithsonian Channel. Those three channels also are blacked out for Dish subscribers.

“CBS itself is a strong network that we’d like to provide for our customers, but we’re forced to carry three others that wouldn’t survive on their own,” said Warren Schlich- ting, Dish executive vice president of marketing, programming and media sales. “We tried in 2014 to break the bundle but we were unsuccessful. We’d love to only negotiate for CBS and not those other channels.”

Also, it looks like Dish’s Sling TV won’t be getting CBS anytime soon as the internet TV service is no longer part of the negotiations, he said.

CBS has been letting Dish and non-Dish customers know of the pending blackout for days, including running a ticker at the top of the Denver Broncos game on Sunday. The company criticized Dish’s tactic to let channels go dark when new terms can’t be reached.

“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. 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,” CBS officials said in a statement, also pointing out that Dish customers can’t watch numerous football games over the Thanksgiving weekend.

Blackouts aren’t unusual for customers of Dish. Last year, the company’s dispute with the NFL Network left the channel dark for nearly 50 days. Around the same time, a stalled negotiation with Tribune Broadcasting left Fox 31 in Denver and 41 other Tribune channels dark for three months.

Schlichting said that local broadcast channels keep demanding more money for the same stuff offered years ago, even as TV viewership has declined. At Dish, the trio of CBS channels are averaging 10 percent fewer viewers than three years ago, the company said.

For consumers, there are more options than ever for watching TV shows, as services like DirecTV Now and Dish’s own Sling TV offer an online-only version of live TV. Other competitors like Amazon Prime, Netflix and YouTube TV also compete for certain shows, which is giving traditional pay-TV customers cheaper alternatives.

All of this is driving up retransmission fees — or the price that TV services like Dish and Comcast pay to carry the channels, according to SNL Kagan, a research firm that tracks the TV industry. It reports that such fees are expected to jump 18 percent this year to $9.3 billion compared to last year. Broken down by subscriber, that’s an extra 50 cents more this year on a monthly bill, said Justin Nielson, an SNL Kagan Senior Research Analyst, Broadcast Media.

“(Declining viewers) is one argument Dish is making is that the exclusivity of CBS programming on traditional cable and satellite TV packages has been diminished. However, CBS’s argument is there is more competition for high quality TV programming and live sports which has driven up their costs,” Nielson said. “Programming costs are on the rise primarily from live sports, and that impact is being felt in each negotiation on carriage fees.”

Dish’s negotiations with CBS have been going on for months to avoid a blackout when the last deadline expired at midnight, Schlichting said. Dish also said it would offer CBS’s separate live-TV stream called CBS All Access to its customers but CBS wasn’t interested.

“To be clear, we never wanted this to happen. We never wanted an interruption. We offered (CBS) an extension to keep the channels up and they refused it,” Schlichting said. “It is an old-school negotiating tactic on their part. Meanwhile, you can get CBS for free with an antenna or with CBS All Access.”

Last year, Dish began offering over-the-air TV antennas free to customers who don’t want to pay to watch local channels. Dish even offers to install the antenna for free for qualifying customers. The company also charges $10 to every customer who wants to pay for local networks, but lets customers reject the fee if they’re willing to give up Dish access to broadcast channels.

The company said that in recent weeks, thousands of Dish customers have switched to antennas.

“Over the last 10 years, there’s been a 1,700 percent increase in average broadcaster fees. They continue to go up at rates far in excess of rates for other things in your everyday life,” he said. “For what it’s worth, demand is declining and prices are going up. And that’s just not the way the rest of the business world works.”