CNN, Cartoon Network and several other Turner cable channels were removed from satellite TV giant Dish Network’s systems in late October after the two companies could not agree on a new distribution contract.
The channels include CNN, Cartoon Network, Boomerang, CNN en Español, HLN, truTV and Turner Classic Movies. The channels were in a widely distributed programming package received by the bulk of Dish’s 14 million customers.
The real battle hinges on CNN still being considered a must-see channel. All these other Turner Channels are bundled with CNN, so if you want CNN on your cable or satellite systems you must take all the other Turner Channels also.
But the battle could leave stinging bruises at Time Warner if it reinforces the impression that CNN has lost its status as a must-have channel, or that others are disposable (deadline.com). This decision could convince others to try to drop the smaller Turner Networks. There is also the complaint that Turner’s entertainment networks filled with tired re-runs (including Friends and Seinfeld) that are available elsewhere, including online.
Another interesting twist to this story is the fact that TBS and TNT are on separate contracts that are ready to also run out in the next several weeks. A big issue is that Dish wants to keep a time distance between the contracts for the larger and smaller networks but Turner wants the two closer together; there’s no separation for most of its carriage agreements with major cable and satellite companies.
Both sides have continued to point fingers, blaming each other for this disruption or service. It’s unknown if it was Turner or Dish that cut the signal but in any case it has been cut.
Time Warner also can’t afford a protracted war after promising Wall Street that it will increase profits at its ad-supported channels through 2018, even as it doubles its outlays for original programming including sports. It expects to more than recoup the outlays by raising prices on cable and satellite distributors. “We’re approaching these discussions from a position of strength,” Turner CEO John Martin told analysts last week.
“It is not like you are dropping ESPN or some of the other widely watched channels … [the Turner channels] are not game changing,” ISI Group analyst Vijay Jayant told Reuters. (Daily) Dish has in the past blacked out channels of networks over price increases. AMC Networks, home to popular shows such as “Breaking Bad,” “The Walking Dead” and “Mad Men,” was dropped from Dish’s network in 2012 after its contract with the satellite TV company expired without a new agreement.
It is interesting that the morning after DISH dropped many of Turners channels Dish Network (DISH) shares were up 2.5 percent at $60.17 midday Tuesday on the Nasdaq.
Looking at the future, this could be the beginning of the end of the bundling system for channels. This may have a huge impact on Time Warner if CNN is downgraded by Dish Network, and that could start a chain reaction with other distributers to downgrade the channel. If that happens, these other channels like TruTV could be gone pretty fast since they do not pull in high ratings.
– Cory Wagner