Copyright 2004 Gannett Company, Inc.
April 13, 2004, Tuesday, FIRST EDITION
From Lexis Nexis
Consumers could get caught in the middle of another power struggle between cable and satellite TV companies and the TV programmers that supply their content. The hitch: escalating costs for TV fare.
Time Warner's Turner Broadcasting System is coming down to the wire in its negotiations with EchoStar Communications, operator of the Dish satellite TV network, over a new contract.
If the two can't hammer out an agreement, EchoStar could yank CNN, CNNfn, Cartoon Network, Turner Classic Movies, Boomerang and the Turner South sports network from Dish's 9.5 million customers in 50 states.
The dispute could also spread to Turner's popular TBS Superstation and TNT networks, which are covered under separate agreements. Turner's previous pact with EchoStar expired Dec. 31, and the two have been working with monthly extensions while they negotiate.
EchoStar's combative CEO, Charlie Ergen, pulled the plug on Viacom's MTV, VH1 and Nickelodeon channels, as well as CBS in some markets, during a 48-hour standoff last month. The nation's No. 2 satellite TV provider says it will have to do the same thing if it can't come to an agreement with Turner.
"We have to have a valid contract with a programmer in order to carry their programming," says EchoStar spokesman Steve Caulk. "As long as we have an extension, we're OK. But if the extension expires, and we either don't have a new contract or an extension of the extension, then we're forced to take them off."
Turner spokeswoman Shirley Powell says: "We remain hopeful that EchoStar will continue to make Turner's industry-leading networks available to its Dish network customers."
Consumers generally blame cable and satellite operators, rather than programmers, when their favorite channels go dark, says John Mansell, senior analyst for media analysis company Kagan Research. Thousands of Dish customers protested when they lost popular Viacom shows such as SpongeBob SquarePants on Nickelodeon.
The key question is how Dish customers will react if they were to lose, among other things, CNN's coverage of the war in Iraq and the upcoming presidential election. "Can you imagine another 9/11 happening — and not having CNN?" asks Mansell. There are more fights to come.
DirecTV, the nation's No. 1 satellite service now controlled by Rupert Murdoch's News Corp., is warning programmers it will only swallow monthly price increases per subscribers that are equal to the price of inflation, or around 1 percent.