EchoStar's Dish Challenges Cable on Several Fronts
January 27, 2006
After rolling out a family tier and doing a $2.5 billion refi last week, Dish Network this week divorced the nation's largest women's network and requested provisions in the Adelphia deal.
In both instances, Dish went for a la carte. With Lifetime, the "Television for Women" cable net, Dish offered to carry the channel on an a la carte basis for subscribers who wanted it. Typically a cable net gets a huge portion of all of a distributor's subscriber base; in this case, nearly 12 million Dish homes. The network then gets a monthly fee--anywhere from five cents to $2--for each of those homes. A la carte would significantly cut into a network's carriage fee revenue stream. Lifetime, which was also holding out for carriage of its Lifetime Movie net, said, "no, thanks."
"Lifetime will undertake a national multimedia campaign to encourage Dish customers to 'Take Back Your Lifetime' by switching from Dish because Lifetime and Lifetime Movie Network's programming will remain unavailable on Dish," read a press release from the women's net. Dish responded with "Lifetime Television has severed talks with Dish Network and has refused to continue negotiations for a fair agreement for carriage of Lifetime Channel."
Lifetime and its sister movie net were essentially left out in the cold during the recent round of retransmission consent deals done by Hearst-Argyle, which owns a chunk of the cable nets. In the past, broadcast station groups have tied cable network carriage to retransmission deals, but many have started negotiating for cash. Multichannel News reported that EchoStar agreed to pay Hearst-Argyle 45 cents a month, per subscriber, for each of its 25 broadcast stations.
With CBS parting ways with Viacom, carriage arrangements for networks like MTV, VH1, Nickelodeon, Spike TV, BET and several others may come under similar pressure, especially with EchoStar promising to extend a la carte to customers.
In a filing with the FCC, EchoStar asked that Time Warner and Comcast provide a la carte for any network either of them owns a piece of as a condition of the Adelphia acquisition. (Time Warner and Comcast are dividing up the bankrupt cable operation.) EchoStar further told the FCC that whatever programming it received, a la carte would be so offered to subscribers.