In a time when millions of people are cutting the cord on traditional network TV services and moving to video-streaming services, CBS, the most popular TV network has decided to black out its programming for DirecTV customers.
According to news sources, CBS went dark over the weekend on AT&T Inc.’s DirecTV, DirecTV Now and U-verse platforms for customers in cities including New York, Los Angeles, Chicago, Philadelphia and Atlanta, as they tussle over the renewal rate for AT&T’s pay-TV operators to carry CBS programming. The blackout deprives subscribers in those markets of popular shows such as “The Late Show with Stephen Colbert” and “Big Brother” – an inconvenience that’s becoming all too familiar for viewers. Already more than 200 TV markets have had broadcast signal disruptions this year, the most ever, according to the American Television Alliance, a group that lobbies for cable and satellite providers. AT&T said it has offered CBS “an unprecedented rate increase.”
Bloomberg says “This is just one example of how the media giants are becoming more insular, preserving their content for their own products and playing hardball with competitors, making it harder for customers to find everything they want to watch through a single affordable subscription. In AT&T’s case, this points to the drawbacks of allowing a pay-TV and wireless giant to also control some of the most attractive TV content.”
In the AT&T-CBS standoff, both are motivated to end the blackout. CBS is in talks over a merger with Viacom, so it doesn’t need such distractions. The AT&T contract is also critical for CBS to meet a target of $2.5 billion in annual retransmission revenue by 2020, according to John Butler, an analyst for Bloomberg Intelligence. As for AT&T, though it may be looking to emphasize profitability over subscriber count, this doesn’t look good for them and their ability to retain subscribers.
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