Q. I am outraged like everyone else at losing my local channels on DIRECTV. But my question is who should I be angry at? Is this DIRECTV’s fault? Or my local channel? — Debra, Upper Marlboro, Maryland.
Debra, as you know, DIRECTV on Monday lost approximately 60 local TV stations due to a carriage dispute with their owner, Tegna Broadcasting, while Dish last night lost 164 local channels due to a separate fee fight with Nexstar Broadcasting.
These carriage battles have become more commonplace in the last few years with both broadcasters and pay TV providers forced to tighten their belts due to cord-cutting and reduced viewership. While the cable and satellite operators once were resigned to paying what the programmers/broadcasters wanted to keep subscribers from defecting, now they are more likely to balk because their profits have declined.
As a result, the two sides often butt heads come contract time, which leads to short-term, and sometimes, long-term blackouts.
But who is to blame for these blackouts? Are the broadcasters greedy and asking for too much money? Or are the pay TV executives worried more about their salaries than their subscribers?
The truth, as it usually is, lies in the middle.
There’s no doubt that the local channels are raising their fees every year, just as there’s no doubt that they are doing so without any consideration to the impact it’s having on pay TV subscriber bills. (Most pay TV operators annually raise their subscriber bills and the need to offset program acquisition costs is a major reason why.) But it should be noted that the broadcasters have their own pressures to maintain profits. And with fewer people watching traditional TV channels now due to streaming, that pressure is greater than ever.
The pay TV executives also care more about their profits and perks than their subscribers, no matter what they say in public statements. But they have shareholders to answer to who also put profits ahead of the customers. If the execs don’t keep profits rising, they will be forced to look for new jobs.
So both broadcasters and pay TV companies are trapped in a cycle which will likely mean more blackouts and higher bills for years to come. At some point, consumers will give up, but despite streaming’s popularity, roughly 70 percent of Americans still subscribe to a pay TV service, maybe more.
If you want to blame someone in this mess, look to the 1992 Congress, and every other Congress since. The 1992 Congress voted to override President George H.W. Bush’s veto of a cable communications bill that allows local broadcasters to withhold their signals if a pay TV operator doesn’t meet their demands. Bush said at the time that it would lead to higher bills, and he was right. But his warning fell on deaf ears thanks to lobbying groups supporting the broadcasters.
Since that bill was passed, every other Congress has failed to address the problem it caused, again because of the outsized political and financial influence of local broadcasters.
And it’s a shame because there is a solution, and it’s called baseball-style binding arbitration. If there’s an impasse, bring the two sides together in arbitration and allow an arbitrator to decide what the pay TV operator should pay. This would eliminate the carriage blackout once and for all.
But don’t expect it to happen for the reasons stated earlier. Alas.
Debra, hope that makes sense. Happy viewing, and stay safe!
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— Phillip Swann