By The TV Answer Man team
TV Answer Man, we’ve been without our NBC station in the Tampa area for more than two months and I need you to explain something to me. What is the benefit of these companies not signing a new deal?! Why do they hold out? What on earth can they gain from not making a deal? They are just making people mad and we might cancel DIRECTV and never watch the NBC station again if they don’t settle! Please explain this! — Marcie, Tampa.
Marcie, DIRECTV has been without the 159 Nexstar-owned local network affiliates (including the NBC affiliate in Tampa) now for six weeks due to a carriage dispute. The satcaster and its DIRECTV Stream and U-verse services also have fee fights ongoing with White Knight and Mission Broadcasting. And they are not alone. Dish has four carriage disputes now with local broadcasters and Comcast has a fight with two Fox stations. Why do these disputes start and why do they often last so long? What benefits can they possibly obtain from holding out and not signing a new deal? Let us try to explain.
1. Negotiating Leverage
One of the primary benefits for broadcasters and TV providers during carriage disputes is the opportunity to gain negotiating leverage. By withholding their content from a specific provider, they can create a sense of urgency and demand among viewers. This can motivate TV providers to return to the negotiation table with more favorable terms, ensuring that broadcasters receive fair compensation for their content. The longer the blackout persists, the greater the pressure on the TV provider to resolve the dispute.
2. Strengthening Brand Identity
A carriage dispute can provide broadcasters with an opportunity to strengthen their brand identity and assert their value in the market. When broadcasters take a stand and communicate their side of the dispute to the public, it can help build a loyal fan base and create a sense of solidarity among viewers. This increased visibility can lead to higher ratings, improved advertising revenue, and a more prominent position in the media landscape.
3. Diversifying Revenue Streams
Holding out during a carriage dispute can encourage broadcasters to explore alternative revenue streams. For instance, they may focus on growing their online presence by offering their content through streaming platforms or launching their subscription-based services. Diversifying revenue streams not only reduces reliance on traditional TV providers but also positions broadcasters for future growth and adaptability in the digital age.
4. Data Insights
Blackouts and carriage disputes can provide broadcasters and TV providers with valuable data insights. By monitoring viewer behavior during a blackout, broadcasters can gain a deeper understanding of their audience preferences, consumption patterns, and geographic reach. This data can inform content decisions, marketing strategies, and advertising placement, ultimately leading to a more efficient and profitable operation.
5. Strengthening Legal Position
Carriage disputes often involve complex legal issues, contracts, and regulations. By holding out and demonstrating their commitment to their content’s value, broadcasters and TV providers can strengthen their legal position if the dispute escalates to litigation. A strong legal position can be advantageous in court, potentially leading to a more favorable outcome
6. Creating Precedent
In some cases, carriage disputes can set important precedents within the industry. When broadcasters successfully stand their ground and secure fair terms, it can encourage other content providers to negotiate more equitable agreements as well. This ripple effect can lead to a healthier and more balanced ecosystem for content distribution, benefiting all stakeholders in the long run.
Marcie, the bottom line, of course, is money but the underlying causes are more complex than that as you can see from the reasons stated above. Hope that helps. Happy viewing and stay safe!
Have a question about new TV technologies? Send it to The TV Answer Man at swann@tvanswerman.com Please include your first name and hometown in your message.
It doesn’t matter whether DirecTV holds out for better carriage rates during negotiations. Come January, subscribers will get the same tired, old email advising of another rate incease as DirecTV tries to assure their contractually bound subscribers that DirecTV only wants to provide the best, reasonably priced programming content for their valued customers…
Also in January,
DirecTV will Loose MORE customers.
Remember the 26 Million customers they USED to have.
GON, along with TONS of $$$ they were Raking in.
DUMP the Providers and have the Cable and Satellite companies deal DIRECTLY with the stations.
Thank you, DirecTV for giving us the local antenna, allowing us to watch our local CBS station during this lockout.