Dish Network drops Viacom

March 9, 2004 9:20 AM

Dish Network drops Viacom. Dish Network dropped Viacom-distributed channels last night, and CBS channels in 16 metropolitan areas. I can't see how alienating 1.6 million subscribers is going to be good for business, no matter what it does to their bottom line.
posted by pizzasub (43 comments total)

[via gizmodo]
posted by pizzasub at 9:23 AM on March 9, 2004

Wow, 2/3 Mefi FPP's today are CNN.com headlines. By the way "Sniper Muhammad Sentenced to Death" is the top headline there - I'm off to make an FPP!
posted by crazy finger at 9:25 AM on March 9, 2004

I'm wondering if Dish network will let new subscribers out of their contracts. Gotta have my CSI...
posted by TeamBilly at 9:36 AM on March 9, 2004

Yeah, I considered the NewsFilter aspect of the post, but as it's a subject that actually affects us (we watch Survivor and our daughter loves Nickelodeon) I thought it might be an interesting topic to discuss. If it's not, I'm sure User Number One will chime in.
posted by pizzasub at 9:41 AM on March 9, 2004

I picked the wrong week to house-sit for friends with the Dish Network...
posted by MsVader at 9:45 AM on March 9, 2004

At first I thought this was all due to the "tit offensive" on superbowl night, but it sounds like Viacom is strong-arming the Dish Network into paying more.

Looks like those media mega-monopolies have their drawbacks, no?
posted by mathowie at 9:46 AM on March 9, 2004

i've been sick of tired of those "Please contact the DISH Network to tell them you love MTV and Nickelodeon, wah wah wah!" banners on Comedy Central. what makes it worse is that i figured the DISH Network was probably blocking them. and they were. fuckers.
posted by mrgrimm at 9:49 AM on March 9, 2004

Dishnetwork has been pretty good about holding prices down for subscribers, compared to cable where I live. Local channels aren't available to us via dish yet so that's no big deal. What's really a pisser is we regularly only watch 5 or 10 channels out of the current 120 that are offered in our current plan. Thanks to the bundles that viacom and their ilk have assembled for satellite, you end up with a bunch of worthless crap.

I'm okay if they hold out for a while, but I NEED MY DAILY SHOW. I'm hoping it'll be available on bittorrent.
posted by SteveInMaine at 9:55 AM on March 9, 2004

The idea that CBS wants somebody else to pay for the privilege of rebroadcasting their free-to-the-air programming and so increase their ratings and viewer numbers makes my head hurt. Viacom should be paying Dish to carry CBS.
posted by ROU_Xenophobe at 10:01 AM on March 9, 2004

Dish Network just raised rates $3 a month.

Viacom wants an increase of 6 cents per month per subscriber.

Who's the bad guy here?
posted by mr_crash_davis at 10:20 AM on March 9, 2004

Who's the bad guy here?

Exactly. This is strong-arming on both sides...but Dish is certainly not without blame here.

That said, I'm glad I have the other sat company. I'd be lost without Nick and the Daily. ;)
posted by dejah420 at 10:22 AM on March 9, 2004

Where did you get those numbers, crash?

I want to switch to somebody else, but I think we're still locked into a contract with Dish.
posted by pizzasub at 10:24 AM on March 9, 2004

Akin to the ABC/TimeWarner spat a few years back, I can't really show much support on either side for what boils down to "two companies with more money than God argue over who has bigger peepee; more after this."

The entire idea of "packaging" cable services is annoying, and as broadband expands I think channel-on-demand is going to become the next frontier. I miss cable (been without since I came back from college) but I really only want three networks. There's no package for that. And to note dejah's post, how sad is it that we actually only have an "other" satellite company?

Sometime in the next few years, I hope, the idea will come for providers to offer pay-per-channel services a la HBO and such. If I could pay only $9.95 or whatever to just get Comedy Central, CNN, and the Cartoon Network, then I'd sign up immediately. The fact that Viacom is bitching about wanting more than they already get to carry 50 channels I don't want isn't rallying them to my side.
posted by XQUZYPHYR at 10:33 AM on March 9, 2004

"Where did you get those numbers, crash?"

From the NY Times.

Also, I susbcribe to DISH (thankfully month-to-month) and I remember the rate going up, which they offset with a coupon for a free pay-per-view movie. A fair deal, if you get a coupon every month, but it was a one-time offer. To me, it's another big "Fuck you" from DISH, just like their offer of a $1 per month rebate for however long this pissing match with VIACOM goes on.
posted by mr_crash_davis at 10:34 AM on March 9, 2004

I'm wondering if Dish network will let new subscribers out of their contracts.

From what I understand, there is a stipulation in your contract with DISH (and I would assume with DirecTV) that none of the channels are not guaranteed for the length of your contract with them. In other words, no they are not going to let you out of your contract.
posted by Steve_at_Linnwood at 10:54 AM on March 9, 2004

Just to add to the discussion, you know. I have a copy of ViaCom's SpongeBob ad, The SpikeTV Banner, and also Dish's Channel 101 anti-Viacom ad. Unfortunately, I'd probably get the boot for posting links to them (especially the last since it has a big long copyright message).

Note that the Dish Ad gives you a real Viacom and MTV number (long distance) to call and moan if you're not happy. Oh, also all dishnet subscribers who are currently subscribed to these channels will be receiving an ENTIRE DOLLAR CREDIT on their bill! ONE WHOLE BUCKAROONIE!

Exciting! :-)
posted by shepd at 11:16 AM on March 9, 2004

If I could pay only $9.95 or whatever to just get Comedy Central, CNN, and the Cartoon Network, then I'd sign up immediately.

add TLC and the Food Network to that list, and I'd be all for it.
posted by lotsofno at 11:49 AM on March 9, 2004

I long for the day that one can go online to the "TV" provider of their choice and just select the channels that they want. Click on little radio buttons next to the channels, while your monthly bill is automatically calculated at the bottom.

That way you only get and pay for what you want. (or what others have said)
posted by Witty at 12:08 PM on March 9, 2004

Witty's got a good idea there. If your bills are getting tight, then you only pay for what you want to watch each month and enable/disable the box accordingly.

I'd keep Nick, Cartoon, Comedy, ESPN, CBS and the HBO/SHO packages.

Maybe BBC America, too...
posted by TeamBilly at 12:15 PM on March 9, 2004

Two Words : Rabbit Ears.
posted by psychotic_venom at 12:21 PM on March 9, 2004

Well, five years ago, in another city, I did have a digital TV service that was almost like that. Flat rate for the basic broadcast changes, $10 for ten more channels, then $1/channel for every channel after that.

It was pretty sweet. Then I moved out of their service area.
posted by djfiander at 12:23 PM on March 9, 2004

"Two Words : Rabbit Ears."

Two other words: Daily Show.

This is fun! Who's going next?
posted by mr_crash_davis at 12:24 PM on March 9, 2004

"Two Words : Rabbit Ears."

Two other words: Daily Show.

And Two More For Good Measure: Is Overrated.

This is fun! Who's going next?

Me Me Me Me Ask Me!
posted by Dreamghost at 12:43 PM on March 9, 2004

This is fun! Who's going next?

Hammer Down?
posted by eckeric at 12:50 PM on March 9, 2004

Hammer Down?

Rabbit Ears?
posted by emptybowl at 1:06 PM on March 9, 2004

"Two Words : Rabbit Ears."

Two Words: Rural Texas.


You can't pick up crap where I live, even with a damn 75 foot tower antenna. Trust me, I wasted my money on one a few years back.
posted by bradth27 at 2:24 PM on March 9, 2004

Squirrel tails?
posted by wendell at 2:26 PM on March 9, 2004

how about one word
BitTorrent

Lots of the shows I like come out early in other markets, so I just download them from the internet. Stargate, The Shield, Sex and the City, any anime.

bonus: no ads.
posted by Iax at 3:12 PM on March 9, 2004

XQUZYPHYR:Sometime in the next few years, I hope, the idea will come for providers to offer pay-per-channel services a la HBO and such. If I could pay only $9.95 or whatever to just get Comedy Central, CNN, and the Cartoon Network, then I'd sign up

Bell ExpressVu up here in Canada has this feature for about 50% of their channels. I get BBC-C for $2 a month instead of buying the package it comes in for $7-8
posted by Mitheral at 3:35 PM on March 9, 2004

Hell with buying individual channels, I'd love to buy individual shows. A movie on HBO for, say, fifty cents? Sopranos for a buck a month? People would go for it big-time. If you watch enough you'll still want to buy the whole channel, of course.
posted by kindall at 4:48 PM on March 9, 2004

Ummm... Yeah our dish network rates went up the three bucks, but not anywhere *near* as much as my mother's cable bill in the last few years. And to which she complains about all the "trash channels" she doesn't even watch (meaning the public service stuff), while we have many more watchable channels. There's always something on, although I wish HGTV would come up with some new stuff (as long as they don't drop Carol Duvall!). Per watchable channel, we pay less and get generally better reception... And ... my Tivo is often full of stuff to watch. :-)
posted by Timebot at 5:26 PM on March 9, 2004

The "6 cents per month per subscriber" quote makes Dish Networks sound petty until you consider that a single household could be said to have several subscribers. To get a better perspective, you need to examine the fundamentals for the companies and read the complete statements made by both Viacom and and the Dish Network.

Comparing Dish Network to Viacom is like comparing David to Golliath. Dish Network is a fledgling company supported by investors. It's worth a few billion in hardware, but with a net income of only about $35 million a quarter, it will be years before they show a profit. In comparison, Viacom is a cash cow, who's net income (before a one-time write-off on Blockbuster) was about $915 million last quarter.

"We are asking for less than 5% of what EchoStar/DISH Networks currently generates from the average customer." - Viacom spokesman

Dish Networks - though adding about 290K subscribers a month - only has around 9 million subscribers, but has made it clear that Viacom's rate increase of up to 40% -- nearly four times the rate of inflation -- could cost "hundreds of millions of dollars" over the length of the contract. Given that the last contract was for only three years, we could easily be talking about an additional cost of $25 per subscriber over a 3-5 year period to pay Viacom's blood money and to provide the extra / largely unwanted channels.

It sounds to me like Viacom is asking Dish Network to eat around 4 1/2 percent of their revenues, *PLUS* the cost of adding the new channels. Given their financial situation, these rate increases are a *VERY* real business issue for Echostar. Given the economy, that can easily be the difference between profitability and a failing business.

Dish Network is helping to keep market prices lower. At $35 a month for 120 channels, they're about $5 a month cheaper than DirectTV and far less expensive than our local cable station. Also, by fighting to keep companies like Viacom from linking the acquisition of channels that we do want to channels we don't, they are doing us all a favor.

In any case, it could be a moot point. I suspect a deal will be inked within a few days.
posted by insomnia_lj at 6:31 PM on March 9, 2004

Screw 'em.... Regardless of the details of the dispute, I think it is crap that Dish Network believes that taking channels away from its subscribers is a legitimate weapon they can use. Basically, they're telling me that to save me money, they are going to give me a worse product than the one I signed up to pay for. And at the same time they are assuming that I will call Viacom and stand up for them. Sorry pal. This 5+ year loyal Dish Network customer just jumped to the other guys. Back in the day, Dish was a friendly and welcome alternative to the evil cable company. For the past few years they have steadily declined and have become just as bad as cable when it comes to customer service. For me, this was just the last straw.
posted by spilon at 6:48 PM on March 9, 2004

I called Dish Network at 11:30 p.m. on a Sunday to get assistance with a DVR problem. They actually sent another one over. Then the old one started working fine again. So I had the option of sending the new one or old one back, whatever I chose - I could wait another week, whatever. (I ended up keeping the old one, after waiting a week.) The situation was all handled beyond efficiently, and the technical help people were quite nice. I can't imagine getting that sort of service from, say, a large cell phone company or any number of large computer-oriented firms.
posted by raysmj at 7:07 PM on March 9, 2004

Screw 'em.... Regardless of the details of the dispute, I think it is crap that Dish Network believes that taking channels away from its subscribers is a legitimate weapon they can use.

Gosh, spilon, sorry to disturb you with the facts and all that boring stuff. Perhaps you'd like to explain what Dish Network was supposed to do?
posted by XQUZYPHYR at 7:39 PM on March 9, 2004

Of course you do realize that the only thing holding companies like Viacomm from just selling their shows over the internet on a per show basis is the whole copyright infringement-p2p thing.

But I digress.
posted by destro at 8:00 PM on March 9, 2004

For those asking about why it's such a pain to get all the channels a la carte from satellite providers (and now some cable providers) the answer is more technical than political.

I can't go into details of why, but I can simply say that their hardware will only support a certain number of packages and individual channels. It's enough of a limitation that I believe you'd rather get packages than channels.
posted by shepd at 8:47 PM on March 9, 2004

I think it is crap that Dish Network believes that taking channels away from its subscribers is a legitimate weapon they can use.

Dish legally can't broadcast the Viacom shows without a signed contract. The contract expired Dec. 31st and a judge extended it through 1:00 am Tuesday.

I'm on Dish's side on this. They have had excellent prices and customer service compared to the cable options we've had.

And at the same time they are assuming that I will call Viacom and stand up for them.

Well, yesterday, Viacom had vague messages about losing their programming plastered all over their channels, including the local CBS station. They were encouraging viewers to call a number to protest without explaining who the number was for and what the problem was.
posted by centrs at 8:53 PM on March 9, 2004

Screw 'em.... Regardless of the details of the dispute, I think it is crap that Dish Network believes that taking channels away from its subscribers is a legitimate weapon they can use.

Ummm, it was Viacom that yanked the channels off, not Dish. Once Viacom tells dish they can't have it unless they pay, there really isn't much of a choice left. I'm with dish on this one, since if Viacom wins this round, there's no guarantee the same thing won't happen with the other satellite company once it's their turn to negotiate.

I'm a dish subscriber too, and since I watch a premium channel that's only available on dish, switching to a different provider would really be the last resort. I sure hope this problem gets resolved quickly - I miss my daily dose of the daily show, and there's a new season of south park coming (You bastards!).

As for the packaging ideas mentioned above - I would love it if the system worked that way, but I seriously doubt it'll ever happen. As we see more and more mergers between the media conglomerates, we're getting bigger and bigger monsters that wield way too much negotiating power and can force the carriers to buy unwanted channels in their bundled packages (in the same way Disney keeps hiking the price of ESPN and bundling tons of crap along with it).
posted by CountZero at 10:17 PM on March 9, 2004

I know part of my soul dies everytime I pay my bill for Rupert Murdoch's DirecTV, but this controversy and NFL Sunday Ticket balance it out.
posted by owillis at 4:50 AM on March 10, 2004

Not having been involved in the contract negotiations myself, I have to go with what I've read. The linked article here, as well as every other article I've seen on the subject, states "Dish Network drops Viacom." Not the other way around. I understand that Dish cannot broadcast those channels without a license, however it was well within their power to get that license, and I would argue that they have a duty to their paying customers to get that license. As far as I can tell from what I read, Viacom is offering Dish the same terms they have with DirecTV and the cable companies. All indications are that Dish wants special treatment by way of a lower price than everyone else, not that Viacom is unfairly gouging Dish. But my point, and I do have one, is that this whole thing amounts to a pissing contest between two big companies, neither of whom is likely to feel much pain from their actions. The people who feel the pain are the subscribers who no longer get the product they were sold, and in some cases are contracturally bound to keep paying for -- subscribers who are so valuable to Dish Network that they are being compensated for their trouble with one whole dollar! Sorry folks, this thing could have gone down any number of ways without going down the way it did. So yes, I say screw 'em.
posted by spilon at 9:02 AM on March 10, 2004

"I would argue that they have a duty to their paying customers to get that license."

True enough... but at what cost?! If I as a consumer save $25 over a few years because I had to make due without MTV for a few days and don't get stuck paying for things I don't want for as long as I have satellite service, I would completely say it's worth it.

"As far as I can tell from what I read, Viacom is offering Dish the same terms they have with DirecTV and the cable companies."

That's not the case.

EchoStar has already signed agreements with 90 affiliate CBS stations across the country. EchoStar had offered to pay Viacom a higher price for CBS than it is paying in those other agreements, but Viacom refused. In addition, Viacom demanded that EchoStar pay a premium over what some smaller cable operators are paying.

In its statements, Viacom said that EchoStar had refused to pay a price hike that amounted to six cents per subscriber. Mr. Ergen refuted that and said the real price hike is many times higher. In addition, he said, Viacom demanded carriage of 13 other channels as a condition to carry CBS.

"If Viacom is willing to agree that our increase is 6 cents ... we'll sign up right now for as many years as Viacom is willing to offer.'' - David Moskowitz, general counsel for EchoStar.

This issue has gotten the attention of the House Commerce subcommittee on telecommunications -- Viacom and EchoStar are being pressured to resolve their differences in a prompt manner and have made statements indicating they are close to a deal.

The end result? A few days of inconvenience to Dish Network's customers, lower prices for their customers (and arguably for every consumer of cable or satellite), more choice, and a better return on investment for Dish Networks' investors.

I don't have satellite or cable, but if I did, Dish Network sounds like the kind of company I would want to do business with... or invest in, for that matter.

"Let's cut to the chase and see if we can't come to an agreement, especially as March Madness begins." - Fred Upton, subcommittee chairman.
posted by insomnia_lj at 12:00 PM on March 10, 2004

Viacom Inc. and the EchoStar Communications Corporation settled a contractual dispute today that has kept the signals of Viacom's 16 CBS stations and its 10 cable channels, including MTV and Nickelodeon, off EchoStar's satellite TV service since early Tuesday.

The deal, details of which were not immediately disclosed, resolves the amount EchoStar pays to receive the channels. EchoStar had contended that Viacom was demanding onerous increases in the fees.
posted by gwint at 7:24 AM on March 11, 2004