DirecTV subscribers in South Florida may soon be missing four channels from their satellite service if DirecTV's dispute with Sinclair Broadcast Group over carriage fees is not resolved by Friday.
Sinclair Broadcast Group Inc. is one of the largest and most diversified television broadcasting companies in the nation. Sinclair owns and operates or provides sales services to 87 TV stations in 47 markets, including WPEC-CBS12, WTVX-CW, WTCN-My15 and WWHB-Azteca in the Treasure Coast-West Palm Beach market, where DirecTV has about 120,000 subscribers.
For several weeks now, Sinclair has been warning viewers that DirecTV is likely to drop the stations from its roster when the companies' current carriage agreement ends Thursday.
On its website, CBS-12 has a note to DirecTV Customers:
"Beginning on March 1, 2013, we no longer expect this station to be carried by DirecTV. This blackout of our programming will only affect DirecTV subscribers. Dish network and cable subscribers will not be impacted. Only DirecTV subscribers are expected to lose access to this station on March 1. We apologize for any inconvenience and suggest DirecTV subscribers call DirecTV at 1-800-DirecTV (347-3288) or make alternative arrangements to continue to watch our great programming. Thank you."
DirecTV has had several difficult negotiations with content providers over new carriage agreements in recent years but this dispute is more heated than usual, television industry experts say.
With about 85 percent of television viewers using some sort of subscription service, whether it be cable, satellite or a telco service, broadcasters increasingly are seeking the same dual revenue stream enjoyed by basic cable channels, which is a mix of advertising and subscriber fees, said Dave Seyler, editor-in-chief of the Television Business Report, an independent trade publication for broadcasters, agencies & advertisers.
Seyler said the crux of the dispute is that the cable/satellite companies argue they are simply trying to keep costs down for their subscribers, while broadcasters contend that what they are asking for is not the only driver of increased costs. Some low-audience basic cable channels may be getting more than they are worth, and the big driver of increases is the cost of sports programming.
"Broadcasters have only started to ask for retransmission consent fees based on what the stations are worth," Seyler said. "This is based on the fact that broadcast content is still the most popular, producing over 90 of the top 100 shows any given week. Further, broadcasters provide almost all of the local content shown on cable or satellite, including local news and emergency information.
"The fact that broadcasters have begun asking for fair compensation relatively recently makes the amount of increases requested on a percentage basis, but in a dollar for dollar basis, they are still compensated at a rate far below their share of the audience."
While most cable companies have agreed to pay what broadcasters are asking, Seyler said, DirecTV, DISH and Time Warner Cable have been more reluctant. Most of retransmission disputes that have resulted in a disruption of broadcast service have involved one of those three.