Why is NBC no longer on DirecTV?
We are experiencing a carriage dispute between NBC and DirecTV in which NBC networks were pulled off the internet service provider’s lineup. This means that the fans of NBC shows including This is Us, Chicago Fire, SNL, and Sunday night football have been locked out from watching them if they subscribe to DirecTV.
Why Did This Happen?
As with most channel blackouts, it is about money and disputes over the fee that the cable provider should pay to rebroadcast the affected stations. Here are the key details of the dispute.
- Some popular networks that fall under NBCUniversal are NBC, Bravo, CNBC, E!, USA Network, Syfy, Golf Channel, MSNBC, and Universo, among others. NBC directly haggles for retransmission consent fees or pays TV carriage rights for these networks.
- These contracts are renewable regularly. The previous deal between NBC and DirecTV was up for cancellation and expired on the 30th of September, 2022.
- NBC sought to boost substantially the retransmission consent fees that DirecTV has to pay for airing its programs. However, this was not an acceptable situation for DirecTV and they did not want to agree to a massive increase.
- Negotiations finally broke down when the two parties could not agree on a new rate by the time the contract was due, and NBC called for the removal of its networks from DirecTV lineups across the country.
To wit, retransmission fees and increasing content costs.
But firstly, let me define these retransmission consent fees that I am referring to. In simple terms, they mean the fees that broadcasters recover from cable and satellite operators for product delivery. Although the negotiators have been around since 1992, they have only recently become a severe problem for both parties.
The three reasons why retransmission fees have gone up are; There is rising content cost which retransmitters must recoup, and broadcasters want their slice of the cake. Creating high-quality movies and TV series costs a lot of money. Broadcasting networks spend a great deal of money acquiring the rights to televise famous athletic competitions and other programs. And in the streaming era, they are having to shell out big bucks for talent and projects because competition has become more fierce.
NBC is pressuring DirecTV to boost retransmission fees to assist the broadcaster in recovering higher costs of content. However, from the demand side perspective, such a large increase could be problematic for DirecTV as it could force it to raise subscriber fees for its service — this it has no intention of doing because it needs to remain competitive within the pay-TV market.
No Resolution in Sight
In contrast to other more short-term channel blackouts where both parties may be expected to negotiate and come to an agreement to carry the channel, there are no signs that NBC and DirecTV are likely to do so any time soon. The blackout is now over three weeks and it appears that both companies have dug in behind their respective negotiating positions.
In its defense, DirecTV claims that NBC is insisting on unreasonable increases in fees that would translate to higher bills to consumers. They have said that they wish to maintain the same terms as the previous agreement to renew the satellite service. NBC claims that it intends to seek only ‘fair market value’ for its ‘entire portfolio of networks, live sports, and news.’
Thus, the game of mutual accusations within the public sphere goes on. At the same time, millions of DirecTV viewers are locked out from their favorites such as The Voice, and out of Sunday Night Football.
This may take some time since both parties seem to be in a logjam in their negotiation on the blackout. Unfortunately, paid TV subscribers find themselves at the center of any conflict between the broadcasters and platforms during carriage disputes.
Does This Matter to Other Providers?
It may be a current dispute between NBC and DirecTV only but it makes one wonder what is to come. Like the other top pay TV operators such as YouTube TV, Hulu Live, FuboTV, and Charter Communications, NBC has other carriage deals that will also expire shortly.
If NBC takes an equally assertive position and requests equally inflated fee hikes, more blackouts are not unprecedented. For, after all, these streaming cable replacements are not immune to the increasing content costs similar to what traditional providers experience.
Most analysts predict that it would not be a smooth sail for broadcasters and cable operators with more battles over retransmission fees. Consumers could end up watching fewer programs if mega-media companies insist on using exclusive sports and entertainment content to demand higher carriage payments from cable operators.
What is the Option of DirecTV Viewers?
With NBC's action, DirecTV users have a few choices should they choose to keep seeing shows linked to the television network. These are a few choices available during the blackout. Following the darkness, here are some choices:
1. If you prefer live TV streaming then Hulu Live, YouTube TV, or Sling TV could be great options in this case, but they cost more than the basic service. The only thing to remember is that NBC may have entered into arrangements with them, and those arrangements could be terminated easily.
2. If you are in a region where NBC is available, you can tune in to the local broadcast affiliate station with an over-the-air antenna for free. However, it only pertains to local cable NBC networks, not every cable NBC network. These are some of the basic HD antennas, and the prices begin from $20.
3. If NBC is a problem, then one should consider suspending DirecTV for a while or canceling its subscription entirely. The amount of early termination fees varies depending on your contracts and the details of your particular agreement.
4. Wait and hope the companies agree on new terms next time negotiations. Look for a new update of DirecTV if there are indications of further development.
Overall, retransmission and carriage disputes have regrettably become more frequent with rising content expenses and mergers of media players. When it comes to customers, they are mostly passive players who become victims of the power that is exercised. Although NBC does indeed present some of the best TV shows, its nonattendance does not explain such a high hike in fees that DirecTV is unable to cover and then pass to the consumers. It is hoped that both will return to the negotiating table at some point shortly and enter into a more reasonable division arrangement. However, with both companies on pause currently, the DirecTV audience will have to find something else to watch or tune in to their favorite NBC shows without DirecTV in the meantime.
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