It’s all water under the bridge in the feud between Dish Network and CBS as the two US firms reached a multi-year licensing agreement just days after a 28-channel blackout in 18 markets. However, the failure to agree on terms to bundle CBS TV Network with Sling TV suggests it could be the last time CBS and Dish Network strike a truce – as both companies increase focus on their respective OTT streaming services.
Consumer backlash is now a likely inevitability for Dish Network as some 4 million subscribers were unable to view last week’s Thanksgiving Day NFL match due to the blackout. Dish instead offered its pay TV subscribers a paltry alternative to receive CBS channels via OTA TV at no additional cost with free antenna installation, which we highlighted last week would probably receive little interest. Even with the renewed CBS deal, the three-day blackout could accelerate cord cutting at Dish, building on the 129,000 pay TV subscribers it lost in the last quarter.
Showtime, CBS Sports Network, Pop and Smithsonian Channel have all been returned to Dish’s satellite service in a deal with undisclosed terms, as well as other CBS-owned stations.
Dish Network’s stock price jumped 3% over the weekend following the end of the blackout, while CBS’ dipped 1.7%, which was due to the ratings hit that CBS received from the large chunk of missing NFL viewers last week, but also suggests that Wall Street saw a missed opportunity for the broadcaster to hold its ground. CBS can’t quite promote its $5.99-a-month CBS All Access service as a viable alternative to a Dish pay TV subscription as it lacks virtually all the standard cable and satellite channels, only offering live streaming to select NFL games plus CNBC. That said, the rise of cord cutting could force CBS to rethink All Access in a few years’ time, by aligning it more as a solid rival to the cable and satellite TV services, as the operators that it once relied upon become more and more reluctant to agree to its swollen carriage fee demands – something CBS had little choice in, to offset declining ad revenues.
In addition, CBS has licensing deals with fully-fledged cord cutter services including AT&T’s DirecTV Now, Hulu, YouTube TV and fuboTV. Once again, Dish Network’s Sling TV has failed to pick up CBS channels as part of the licensing agreement, but there are suggestions that the next time the two strike a deal, Sling TV will get some CBS treatment, providing another deal ever happens.
Last week, Dish described the terms as “regrettable and unnecessary” and slammed CBS for “bringing its greed into the homes of millions of families this Thanksgiving.” It’s worth noting that Dish also pushed a marketing campaign to TV subscribers to receive a $10 a month bill reduction in return for cutting off the top four broadcasters – an act CBS won’t be forgetting anytime soon.
CBS could also feel the effects when negotiating a renewed deal with Charter Communications as the broadcaster had its expiration date at Charter pushed back by 4 months to the end of December this year, according to analyst Tom Eagan from brokerage firm Telsey Advisory Group, speaking to Multichannel News. He suggests CBS will be able to keep the higher legacy retrans rate for TWC, but the lost time means CBS has less bartering power. Although Charter’s takeover of Time Warner Cable will be crucial here, as TWC lost 306,000 pay TV subscribers back in 2013 following a one-month CBS blackout – a disaster that TWC executives on the Charter board will be wary of risking a repeat of.
The agreement between Dish and CBS this week brought about a change of heart, as Warren Schlichting, Dish EVP of Marketing, Programming and Media Sales, said, “We are grateful to our customers for their patience this holiday week as months of work has resulted in a deal that delivers for years to come.”
CBS President of Television Networks Distribution, Ray Hopkins, said, “We are pleased we have reached a deal with Dish, who recognizes the value that the number one network brings to viewers in these markets. Dish customers will continue to get CBS’ must-have content, while we are also able to achieve our short and long-term economic and strategic goals.”