HBO channels yanked off of Dish Network
Published 12:00 am Friday, November 2, 2018
Dish Network customers, including those who subscribe to SlingTV, have lost access to HBO channels and Cinemax — months after AT&T gained control of HBO’s parent company — in the television industry’s latest escalation of hardball negotiations over carriage fees.
The dispute marks the first-ever blackout of HBO channels. HBO has long maintained relations with its distribution partners because it relies on them to help market its channels.
The channels were pulled early Thursday when the carriage contract expired. The blackout affects about 2.5 million of Dish’s 13 million customers, according to a person close to the situation who was not authorized to publicly discuss internal numbers.
Dish Network blamed the blackout on AT&T’s takeover of HBO and other Time Warner properties, which was completed in June. HBO, meanwhile, accused Dish of offering unreasonable proposals.
AT&T’s acquisition of Time Warner properties “has allowed the giant conglomerate to relentlessly exert power and influence over competing pay TV providers,” Dish said in a statement. That $85 billion merger transformed the phone company into one of the world’s largest entertainment firms with huge clout in the marketplace.
AT&T also owns DirecTV, which is Dish’s largest competitor. DirecTV and Dish have been struggling to hold on to customers.
“Plain and simple, the merger created for AT&T immense power over consumers,” said Andrew LeCuyer, Dish’s senior vice president of programming.
The U.S. Justice Department tried to block the AT&T-Time Warner merger — a deal President Donald Trump opposed. During a trial, Dish executives testified against AT&T, saying the merger would be anticompetitive.
In June, a federal judge in Washington, D.C., ruled in AT&T’s favor, allowing the merger to proceed. Two months later, the Justice Department appealed the ruling.
The blackout on Dish systems could give the government ammunition in its case against AT&T.
Dish accused AT&T of trying to weaken competition as it prepares to roll out a WarnerMedia streaming service, which includes HBO, early next year. HBO has a standalone streaming service, HBO Now.
Dish said AT&T is demanding Dish pay for a guaranteed number of subscribers “regardless of how many consumers actually want to subscribe to HBO.”
HBO said Dish uses blackouts as a negotiation tactic. Dish has the highest percentage of blackouts among major pay-TV providers.
“During our 40-plus years of operation, HBO has always been able to reach agreement with our valued distributors and our services have never been taken down or made unavailable to subscribers due to an inability to conclude a deal,” HBO said in a statement. “Unfortunately, Dish is making it extremely difficult, responding to our good-faith attempts with unreasonable terms.”