Some TV channels go dark in dispute

A contract dispute led to a satellite-television provider cutting ties with a television distributor, which controlled more than 10 cable-television networks.

The action occurred after the two sides could not reach agreement on a business contract to specify how much the satellite company would pay to continue to carry the channels of the television conglomerate.

The satellite company's decision meant that nearly 20 million subscribers would be cut off from popular children's and adult programming like "Dora the Explorer" and "The Daily Show," amongst others. The dispute grew as the two sides squabbled over the price increases the satellite company would have to bear to keep the cable channels available to its customers.

The programmer was asking for a cost that an official with the satellite company said were excessive, especially considering the decrease in ratings that has affected some of the networks.

The executive said that the satellite company wanted to continue to air the programming but the other company would not allow it. A representative of the entertainment provider said it was asking for a raise of only a few cents per day per subscriber, while other estimates put it at 30 percent.

Neither side would specify the costs of carrying each channel. Industry analysts put the figures at about a half dollar per month for Nickelodeon, which carries "Dora the Explorer," to less than 20 cents for Comedy Central, home of "The Daily Show."

The satellite provider is dissatisfied with more than price, however. It also is angry with how much content the distributor releases online for free viewing. Officials of the satellite company worry that consumers might cancel their service and instead get their entertainment over the computer at no cost.

Contract disputes between television providers and distributors are not uncommon but rarely does either side take an action to cancel service. The losers in the dispute, in the short term, are the consumers who rely on their satellite service for their family's programming.

Source: Los Angeles Times, "DirecTV drops more than a dozen Viacom networks over fee dispute," Joe Flint, July 11, 2012