Let’s say you were the chairman of the third largest multichannel video programming distributor in the United States, and your customers were entering the third week of a blackout of some of their favorite TV channels, due to an inscrutable squabble between corporate behemoths.
How would you discuss the situation in a public venue? Odds are your approach would be less tone deaf than that of DISH Network chairman Charlie Ergen.
“It’s almost been a non-event at this point,” Ergen told analysts and members of the media today, referring to the blackout of eight Turner networks, including TCM, that began on October 21. “Turner…is one of the easy ones to take down.”
And just in case you’re one of those bright-eyed optimists who thinks, “These companies will work it out. They always do,” Ergen added this little nugget:
“When we take something down we’re prepared to leave it down forever.”
Ergen is clearly attempting to negotiate in the media, perhaps in the wake of the blustery bombast from Turner CEO John Martin at Time Warner’s Investor Day presentation on October 15:
“We are getting the rate increases we’re seeking. By year end will have new deals with 8 of top 10 distributors,” Martin assured analysts. “We’re approaching these discussions from a position of strength.”
While it’s true that Turner’s cable network affiliate revenues are up 8.8% over 2013 to $4.2 billion (second only to Disney), Ergen is unimpressed, suggesting that the channels in this bundle – excluding TNT and TBS, which are part of a separate deal – are not priorities to his subscribers.
“(Channels) like CNN are not quite the product that they used to be. You can imagine: CNN down on election night would have been a disaster 15 or 20 years ago. Now there are plenty of other places for people to get news,” he said. “We have other news and cartoon shows (referring to Cartoon Network and Boomerang). (Would subscribers) rather save the money? There’s a pretty good chance that they would.”
Ergen’s “one channel is interchangeable with another” worldview was demonstrated within hours of the blackout when DISH began swapping out Turner networks for replacements with similar programming. TCM with replaced with FXM, formerly the Fox Movie Channel, an advertiser-supported network that programs recent film releases during half its programing day. Not long after I wrote an article condemning DISH for this bait-and-switch, the satcaster began simulcasting MGM HD in TCM’s stead. MGM, which also carries ads, may be a more appropriate substitute than FXM, but it still pales in comparison to TCM’s 24 hours per-day of commercial-free classics.
And Ergen is not stopping at CNN, CNN en Espanol, HLN, TruTV, Cartoon Network, Adult Swim, and Boomerang. He’s also extending his posturing to DISH’s carriage of TNT and TBS, which is up for renewal later this year.
“(I)f we’re not going to carry CNN or Cartoon Network then I’m not really excited when your contract’s up to carry TNT and TBS. So we have to be prepared that those channels will come down as well,” he said. “Those will be more painful.”
With an average subscriber fee of $1.33 (second only to ESPN), the loss of TNT alone from 14.1 million homes would have a impact on Turner’s bottom line, both in affiliate fees and ad revenue. When you add TBS and the other Turner networks, the stakes increase. To put the current dispute in perspective, all eight of the currently blacked-out channels on DISH (excluding TNT and TBS) cost subscribers on average $1.57 per month combined, which equates to only pennies per month, per subscriber for TCM. Think about that the next time you pay a gigantic cable bill strictly because you want to keep watching TCM.
Lost in the gamesmanship and focus on the bottom line is the importance TCM plays in the lives of many of its viewers – this one included. Ergen may dismiss it as “easy to take down” and replaceable with other channels, but reader feedback I’ve received tells a very different story. Here are a few excerpts of comments posted on Cinematically Insane over the last two weeks:
“I want TCM back! There is no TV without it.” – Ruthie
“I watch TCM every day…This has got to be solved YESTERDAY.” – Kathleen
“This is bull! I want TCM back. Only channel I watch and now it’s gone.” – Connie
“My husband loves TCM. Every night at 7pm he turns it on and usually will watch what is on… Please negotiate whatever is needed and bring it back.” – Jean
“TCM was the main reason I’ve stayed with Dish network… They need to settle this dispute.’’ – John
“I pay $86.27 a month just to WATCH TCM… I can watch it for hours and forget the nasty old world we have.” – Ricky B.
“Fix your problems we pay WAY TO MUCH FOR TV AND IT IS YOUR JOBS TO KEEP ALL THE PROGRAMMING THAT WE PAY FOR.” – Dan
“Please please please bring back TCM because it is the only channel I watch. What a great inconvenience & aggravation. With all the terrible world events happening TCM is a positive outlet.” – Lora
“TCM…is the ONLY channel I can leave on and not worry that my kids will walk by and see or hear something inappropriate…Have some moral and ethical decency and put TCM back on the air.” – Gina
“There is no channel that can replace TCM. The classic movies…(are) one of a kind and such good entertainment! Beats a lot of the trashy shows on the major networks any day. Wish DISH and Turner would hurry up and resolve their dispute and return TCM back where it belongs! I look forward to watching TCM every day and miss it so very much.” – Yvonne
“If Dish cannot / will not bring TCM etc. back PRONTO we will be gone for good!” – Mike and Tina
“I love TCM and watch it every day. Greed has taken over the entire world. Isn’t billions of dollars enough for all you people? Let the little man watch his programs. We are the ones that made you what you are.”– Albert
“I subscribe to Dish because of TCM and I have dropped other services because of issues like this. I have a terminal illness, just please let me go with my memories.” – name withheld
Based on Ergen’s comments today, a deal between DISH and Turner had better be imminent, or it may never happen.
“(T)here comes a point in time – certainly during this month,” he said. “(that) if we don’t have a deal we just make a long-term decision to go a different direction.
Update 11/5/14: Read the Turner CEO’s response to Ergen here – plus a theory on what really may be causing this blackout