Why Dish Network Is Not Afraid to Fight the Heavyweights
Dish Against the World: Why Dish Network Can't Stop Fighting
Say this for Dish Network: It isn't afraid of a fight.
If you're like most TV viewers, you don't think much about the constant, mundane negotiations that bring your favorite shows to the screen. But then those talks break down, a contract expires at midnight, and your favorite network goes suddenly goes dark.
It happened last month to customers of DirecTV, the largest satellite provider, when for nine days they lost their MTV, Comedy Central, Nickelodeon and other Viacom networks.
But if blackouts mark the height of hostilities in network and carrier negotiations, then Dish, the second-largest satellite provider, has proven itself the carrier most willing to go to the mattresses. It has been involved in 22 of the 42 blackouts tracked since March 2010 by the American Television Alliance, a coalition of consumer groups, cable companies and satellite providers -- including Dish.
No other carrier is nearly so blackout-prone. DirecTV, which has 19.9 million customers to Dish's 14.06 million, has had only six blackouts in the time frame monitored by the ATA. Time Warner Cable, which has about a million more customers than Dish, has been involved in just five blackouts, according to the group.
But the blackouts aren't the only reason Dish has a reputation for fighting. In June, it dropped AMC Networks in a feud so intense that Dish and AMC can't even agree on why they broke up. The federal government, meanwhile, is suing Dish in two different lawsuits, accusing it of illegally aggressive telemarketing. (Dish denies the claims.)
In potentially the biggest dispute of all, Dish is locked in litigation with ABC, CBS, Fox and NBC over its Auto Hop feature, which allows customers to skip the ads in previously-aired primetime network shows. Networks say it poses a threat to traditional, ad-supported television, and have asked a judge to order Dish to stop offering Auto Hop.
Also read: FTC Sues Dish Network Over Telemarketing
Dish President Charlie Ergen was a professional card player before he became a satellite TV mogul. One person who has faced off with Dish says Ergen approaches both jobs the same way.
"He conducts himself the way a professional poker player tries to bully people at the table," the person, speaking on condition of anonymity, told TheWrap. "They try to push around the weaker players and bluff big. It's a funny way to treat people who are ultimately your business partners."
Dish says it only fights when it needs to, noting that only a small percentage of its hundreds of contract negotiations lead to blackouts. The company digs in, said Dish Senior Vice President of Programming Dave Shull, to prevent rate increases that would be passed on to its customers.
"We do dozens of deals every single year and we have a very good sense of what the market pricing is for these deals," Shull said. "When someone comes to us and has what we would call a skewed view of market pricing, we feel it's our responsibility to take a pretty strong stand."
Dish is taking that stand as retransmission fees are soaring – and carriers are struggling to slow them down. SNL Kagan reports that the fees went from $313.5 million in 2007 to roughly $1.5 billion last year, and are projected to hit $4.9 billion by 2017 -- with consumers absorbing much of the cost.