Dish Network CEO Charlie Ergen didn’t say in so many words that he’s digging in his heels in his widely watched distribution carriage renewal talks with Viacom. But his general comments in his quarterly earnings call today left little doubt about his position.

At a time when pay TV network ratings are declining, “programmers come in for a renewal and say they want a double digit rate increase, and we say you should get a double digit decline,” he said. The balance of power in negotiations “has shifted to the distribution people having more leverage than they had in the past.”

Early this month Viacom CEO Philippe Dauman told investors that his company and Dish had agreed to a brief extension of their previous carriage deal but warned that “there may be short term hiccups along the way.”

SInjin
5 months
That makes sense to a degree, but the distributors control access to customers and, more importantly, drive...
lsb
5 months
Times are changing, I read an article on a stock site that new contracts that were signed...
GG
5 months
It won't happen because Disney owns ESPN and will leverage their other channels to force the carrier...

Ergen says it’s a “positive” that Dish hasn’t taken Viacom down. “It would take a lot for us not to move forward.” Viacom was an early supporter of the No. 2 satellite company.

But so much of the programmers’ content available is available online, and satellite customers “shouldn’t have to pay for it twice.”

He observed “the majority of our customers have Netflix and they have a lot of kids’ programming.” When asked to pay for more on satellite “they scratch their head.”

Speaking broadly, Ergen said that “if we take something down we’re probably not going to negotiate the way we have in the past….You just move on.”

Ergen calls satellite TV a “mature to declining business,” leading him to become “more conservative” about investing in it — and about the subscribers he’ll seek. For example, he favors customers with high credit scores and those in “rural America where there are more limited options.”

Satellite is “disadvantaged vis a vis the cable industry” which also offers broadband. And young adults “are just going to go to Netflix, Hulu, and Amazon and others.”

One of those “others” is his $20 a month Sling TV streaming service. It began as “a science project” but now is “a high growth business for a class of customer [the satellite service] can’t get today.”

Asked if Viacom’s relationship with Sling was a factor in the companies’ renewal talks he said that it is — but “it gets tricky because some content providers sell some of their content to other content providers like Hulu, Amazon or Netflix.”