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DISH Has Clever Reply to CBS Blackout

During renewal negotiations CBS Corporation chose to black out DISH customers’ access to 28 local channels in 18 markets across 26 states. CBS is blocking consumers in an effort to raise carriage rates for local channels and gain negotiating leverage for unrelated cable channels, all with declining viewership on DISH.

DISH was hopeful of a mutual agreement to renew carriage of its local stations. In that spirit, DISH offered a short-term contract extension to CBS that would include a retroactive true-up when new rates were agreed upon, and would preserve the ability of DISH customers to access the CBS stations while negotiations continued. The true-up would ensure that CBS was made whole at the new rates for the period of any contract extension.

Until an agreement is reached, DISH is offering digital over-the-air (OTA) antennas at no cost so that customers in affected markets can watch CBS’s local broadcast channels for free. Eligible DISH customers have the option to completely drop their local channels from their programming package, saving $10 on their monthly bill.

In recent weeks, thousands of eligible DISH customers in CBS markets have made the switch to OTA, accessing news, popular network shows and sports from CBS and other local channels for free, over the air. Customers with qualifying equipment, programming, and location can choose to receive local channels free over the air and save $10 per month on their bill. At no cost, DISH will install an antenna for qualifying customers in CBS markets based on the reception available at their home.

“Switching to OTA-delivered locals can unlock $120 savings annually for DISH customers,” explained Warren Schlichting, DISH EVP. “Customers will see the local channels and show information for the most popular channels in the guide on the Hopper DVR, and can watch and record local channels using their DISH remote without switching inputs on the TV. We want to help customers with the choice to save money. DISH doesn’t save money, but consumers can.”

Each year, the cost to carry local broadcast stations rises far beyond the rate of inflation, leading to blackouts across the country that affect millions of subscribers of various pay-TV companies. According to SNL Kagan, a leading source on the media industry, broadcast fees burdening pay-TV consumers are expected to reach an unprecedented $9.3 billion in 2017. These same rates, for channels available free over the air, were as low as $215 million in 2006, soared to $7.9 billion in 2016 and are expected to reach $12.8 billion in 2023.

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Local station availability over the air is dependent on geographic location and topography. Consequently, some customer locations may not qualify for an antenna installation.

Summary

  • Eligible DISH customers can choose to drop cost of local channels, savings of $10 per month
  • DISH offers qualified affected customers digital over-the-air (OTA) antenna and installation at no cost, thousands have switched
  • CBS rejects DISH offer to extend contract for benefit of consumers while negotiations continue
  • Broadcaster fees will rise to $12.8 billion by 2023, up almost 40 percent from today, estimates SNL Kagan

Update: November 24, 2017
DISH Network LLC has just reached a multi-year carriage agreement with CBS Corporation for its owned and operated local stations, as well as CBS Sports Network, Pop, and Smithsonian Channel. The channels are currently being restored to DISH customers.

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