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Broadcast TV stations are being blacked out on cable and satellite TV systems in record numbers this year, with 230 blackouts so far in 2019.

That beats the record of 213 blackouts set in 2017, even though 2019 is just seven months old. The 230 figure represents a huge rise over the eight blackouts seen in 2010 and 42 in 2011, according to a pay-TV industry advocacy group.

Blackouts has mostly been trending up in the past decade, though the number frequently goes down one year before rising again the next. There were 90 blackouts in 2012, 119 in 2013, 94 in 2014, 193 in 2015, 104 in 2016, 213 in 2017, and 165 in 2018.

These numbers, which are indicative of an industry battle between pay-TV providers and programmers, were released this week by the American Television Alliance (ATVA). The lobby group represents TV providers from the cable, satellite, and telecom sectors.

Pay-TV companies have increasingly been refusing to pay the channel-carriage prices demanded by owners of broadcast networks. When a broadcaster demands a certain rate for carrying its TV channel and a cable or satellite company refuses to pay it, a blackout results.

Lobbyists for the pay-TV and programming industries each offer self-serving arguments about how the other is ruining broadcast TV and causing consumer prices to rise. “If their demands for higher fees are not met, broadcasters yank their signals from consumers, leaving you without your favorite programming indefinitely,” the ATVA says on its website. “Broadcasters black out their channels until their ransom demands are met. And when they are, it results in much higher prices for you, the consumer.”

The National Association of Broadcasters (NAB) didn’t dispute the blackout numbers provided by the ATVA, but it offered a different interpretation.

“We believe there’s a deliberate strategy on the part of pay-TV companies AT&T and Dish Network to force retransmission consent disruptions,” an NAB spokesperson told Ars. “AT&T and Dish have been involved in 85 percent of disruptions in the last few years; AT&T [via its DirecTV and U-verse TV services] has had seven impasses in the last 7 weeks (averaging one a week).”

The NAB claims that TV providers are creating the blackout problem in an attempt to convince Congress to change the law in their favor.

“This strategy is timed around Congress’s review of a satellite TV bill,” specifically a reauthorization of the Satellite Television Extension and Localism Act (STELA), the NAB told Ars. “We think the strategy is to force disruptions, then cry to Congress that ‘the system is broken’ in hopes that Congress will add an amendment to the satellite TV bill.”

The ATVA argues that Congress should “modernize the retransmission consent rules, which currently favor broadcasters at the expense of consumers and competition.”

Retransmission consent

Broadcast stations are freely available to consumers with over-the-air antennas, but TV providers have to get retransmission consent from broadcast stations to carry their channels. Under US law, broadcasters can choose “must-carry” status, which forces cable operators to air their programming but doesn’t require payment. Alternatively, broadcast stations can use the retransmission consent model to demand carriage fees from TV providers, with the risk of blackouts occurring when the sides don’t agree on price.

The ATVA says that broadcasters collected $10.1 billion in retransmission fees in 2018, up from $9.3 billion in 2017. The retransmission fees totaled only $200 million in 2006, the group said.

“Since 2010, millions of Americans have seen dark screens instead of watching their favorite channels due to more than 1,000 broadcaster-initiated blackouts,” the lobby group said. ATVA members include AT&T, Verizon, Charter, CenturyLink, Dish, a lobby group for small cable companies, and other industry members.

On Saturday last week, CBS was blacked out on DirecTV in Los Angeles, New York, and other cities. Also recently, “Meredith Corporation caused a massive TV blackout on July 16, 2019, pulling its signal from millions of Dish Network customers in 12 television markets in 18 states,” the ATVA said last week. “In addition to Meredith’s blackout of Dish Network customers, Nexstar is currently blacking out millions of DirecTV, U-verse and DireTV Now customers, in approximately 100 cities across the US, denying access to 125 local stations.”

Satellite TV struggles

A CableFax article points out that blackouts are affecting satellite TV systems more than cable networks, which have the luxury of increasing revenue from broadband.

“For the most part, cable operators have decided that video subscriber losses, at least within reason, don’t really matter all that much, so they don’t feel the same pressure to drive a hard bargain,” MoffettNathanson analyst Craig Moffett told Cablefax. “If the price of video rises, and video subscribers decide to leave as a result, so be it. Their broadband relationship with the customer will still be fine. Satellite operators don’t have the same luxury. They have to scrounge under the sofa cushions for every spare coin they can find.”

AT&T is both a pay-TV provider and broadband-network operator, but its home Internet service is only available in parts of its nationwide satellite-TV territory.

AT&T and other TV providers have complained for years about rising programming costs in general, not just for broadcast stations. One counter-strategy TV providers have used is to buy large programmers, like AT&T did with Time Warner in a deal finalized last year. But that doesn’t stop the AT&T-owned Time Warner from charging high prices for its content, and the industry consolidation hasn’t prevented TV users from being charged ever-higher prices.

AT&T claimed that its Time Warner merger would lower prices for consumers, but AT&T has since been raising them instead. AT&T is also starting to pull Time Warner shows off Netflix in order to make them exclusive to an upcoming service it calls HBO Max.

Trading blame

NAB CEO Gordon Smith lambasted TV providers yesterday in a speech in which he pointed out that AT&T has played a role on both sides of programming disputes since it purchased Time Warner. AT&T buys carriage rights from other programmers so it can offer TV bundles through DirecTV and U-verse, but AT&T also charges other TV providers for access to Time Warner channels. AT&T isn’t the only one in such a position, as Comcast has been the proud owner of NBCUniversal since 2011.

“AT&T collects $6 billion annually in affiliate fees from its own Warner Media cable properties like TNT, TBS, CNN and Cartoon Network,” Smith said.

Despite that high price, “these cable networks’ ratings pale in comparison to the ratings of local broadcast affiliates,” Smith continued. “Last year, the typical Big Four TV broadcast affiliate delivered on average nearly four times more viewers every night than even the most-watched Warner Media channel.”

Retransmission consent “is a free-market system that works,” and the prices charged by broadcast networks are fair, Smith argued.

“If not for the compensation broadcasters receive for their highly valued programming—programming that AT&T, Dish, and others re-sell to customers—broadcasters would be unable to support investigative journalism and expensive sports coverage and invest in sophisticated weather operations that save lives and provide in-depth local news coverage,” Smith said.

The ATVA responded, saying that retransmission consent fees “have been the fastest rising part of pay-TV bills for over a decade.”

“Rather than using a calculated political pivot to deflect blame and preserve their ‘special’ status enshrined in current law, broadcasters should stop demanding unacceptable price increases for channels with continually declining viewership,” the ATVA said. “Consumers should no longer have to pay more for what they are watching less.”

AT&T also disputed broadcaster arguments, telling Variety and other news outlets that broadcast stations “continue to give their signals away for free but also demand unsustainably growing fees for allowing customers the convenience of receiving their channels in a usual program guide or without switching an input.”

AT&T urges its DirecTV customers to use antennas to get broadcast stations during blackouts, and even provides the antennas at no extra cost.