Mil­lions of Dish Net­work’s cus­tomers cut off from HBO

Woonsocket Call - - ENTERTAINMENT -

The busi­ness dis­pute that yanked HBO off the air for mil­lions of Amer­i­cans on Nov. 1 is en­ter­ing its sec­ond week – with no signs of a respite.

As many as 2.5 mil­lion cus­tomers of HBO have lost ac­cess to hit shows such as “Game of Thrones” and “West­world” through Dish Net­work, Amer­ica’s sec­ond-largest satel­lite TV provider.

The black­out af­fects an­other 10.2 mil­lion Dish sub­scribers who aren’t signed up for HBO but who could be po­ten­tial cus­tomers of the premium en­ter­tain­ment chan­nel.

It’s the first time HBO has ever “gone dark,” in the par­lance of TV ex­ecs. View­ers are be­ing caught in the mid­dle, with po­ten­tial con­se­quences on both sides: An ex­tended out­age could lead to sig­nif­i­cant cus­tomer losses.

The standoff be­tween Dish and HBO stems from a seem­ingly run-of-the-mill con­tract ne­go­ti­a­tion over whether Dish should pay HBO for a guar­an­teed num­ber of cus­tomers, whether those sub­scribers ma­te­ri­al­ize or not.

But it also takes place against the back­drop of a historic Jus­tice Depart­ment ef­fort to scru­ti­nize the in­creas­ingly con­cen­trated me­dia in­dus­try and to un­wind the merger that gave con­trol of HBO to one of the na­tion’s big­gest tele­com com­pa­nies: AT&T.

The im­passe car­ries enor­mous stakes that re­flect the legacy tele­vi­sion busi­ness’s dire con­di­tion. What be­gan as a trickle of con­sumers to­ward dig­i­tal TV al­ter­na­tives, such as Net­flix and Hulu, has turned into a tor­rent, with an­a­lysts such as eMar­keter pre­dict­ing that 33 mil­lion Amer­i­cans will have given up their pay-TV sub­scrip­tions by the end of the year. With both Dish and AT&T re­port­ing even steeper-than-ex­pected de­clines in their tra­di­tional TV sub­scriber base in re­cent months, the pressure to re­tain cus­tomers is in­tense, an­a­lysts say.

“The rate of de­cline in the core satel­lite TV seg­ment has sharply ac­cel­er­ated,” wrote Mof­fet­tNathanson an­a­lyst Craig Mof­fett in a re­search note this week. “They have ar­gued that re­tain­ing their best cus­tomers is now their pri­or­ity.”

Chan­nel black­outs are com­monly re­garded as a game of chicken in the TV in­dus­try, with par­tic­i­pants on each side hop­ing the other will blink first. Dish’s chair­man, Char­lie Er­gen, is widely known as a com­bat­ive op­po­nent in ne­go­ti­a­tions who has fre­quently al­lowed channels to go dark rather than agree to deals he doesn’t like. Dish has pre­vi­ously gone dark with Univi­sion, Sin­clair, Fox, Vi­a­com and AMC, ac­cord­ing to Mof­fett. Er­gen has said in the past that “real” ne­go­ti­a­tions do not be­gin un­til a black­out oc­curs.

In a sign of how ac­ri­mo­nious the feud has be­come, Dish has ac­cused AT&T of weaponiz­ing HBO in a bid to lure its cus­tomers away to AT&T’s DirecTV, its chief ri­val. AT&T de­nies any in­ter­fer­ence in HBO’s con­tract ne­go­ti­a­tions. And it al­leges Dish has se­cretly “col­lab­o­rated” with the Jus­tice Depart­ment to tar­nish the tele­com gi­ant’s name, in the wake of the govern­ment’s failed at­tempt to block AT&T’s pur­chase of Time Warner, now re­named Warn­erMe­dia.

“This is purely an an­ti­com­pet­i­tive play that we tried to warn about,” Er­gen said dur­ing an in­vestor con­fer­ence call Wed­nes­day. “AT&T knows full well that for many of our cus­tomers the only place they can go is to DirecTV, and they own HBO and they own DIRECTV,” Er­gen added. “So they’re will­ing to make that trade-off.”

Although some Dish cus­tomers may be able to sign up for HBO’s stand-alone dig­i­tal app, HBO Now, many live in ru­ral ar­eas with­out high-speed In­ter­net ac­cess, ef­fec­tively taking that op­tion off the ta­ble, Er­gen said.

The Jus­tice Depart­ment de­clined to comment on AT&T’s ac­cu­sa­tions of col­lab­o­ra­tion. But a per­son fa­mil­iar with the agency’s think­ing called the idea “un­true” and “laugh­able,” speak­ing anony­mously.

The im­passe car­ries enor­mous STAKES THAT RE­flECT the legacy tele­vi­sion busi­ness’s dire con­di­tion. What be­gan as a trickle of con­sumers to­ward dig­i­tal TV al­ter­na­tives, SUCH AS NET­flIX AND Hulu, has turned into a tor­rent, with an­a­lysts such as eMar­keter pre­dict­ing that 33 mil­lion Amer­i­cans will have given up their pay-TV sub­scrip­tions by the end of the year.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.