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EchoStar Satellite Drops CBS in 16 Cities
Yahoo ^ | Reuters

Posted on 03/09/2004 11:34:25 AM PST by Tumbleweed_Connection

Echostar Communications Corp. on Tuesday dropped local CBS stations from its satellite service in 16 cities and dropped MTV, Nickelodeon and other cable channels nationwide after contract talks with Viacom Inc. broke down. The impasse left an estimated 1.6 million people without CBS network television in cities like New York, Los Angeles and Miami the week before the CBS broadcast of the NCAA basketball tournament. It leaves another 9.5 million nationwide without 10 Viacom channels.

Viacom said it was "dismayed and disappointed" by the action.

EchoStar said it would like to transmit CBS programing on its network again, and accused Viacom of "holding the public airways hostage."

Echostar shares were up 2.4 percent in early afternoon trading, while Viacom shares were down 0.9 percent.

Analysts said both sides have plenty to lose. Fee disputes between content owners and distributors have become commonplace, but usually they are resolved before customers lose service.

"Over the long term it's not good for either side," said John Hill, analyst at SoundView Technology Group.

Cablevision Systems pulled the Yes Network off its systems in 2002 in a fee dispute. Time Warner Cable pulled Walt Disney Co.-owned channels like ABC and ESPN from its systems in 2000.

Should the dispute drag on, Hill said, Viacom will take a hit to its earnings as it loses affiliate fees and advertising revenue for cable channels like MTV, VH1 and Showtime.

EchoStar is in an even more precarious position. Most subscribers to its DISH Network have other options for television service, such as their local cable provider and satellite TV competitor DirecTV.

"It's certainly damaging to DISH's subscriber roles and its ability to market in one-third of the country," Hill said.

EchoStar said Viacom demanded exorbitant fee increases and space for new cable channels as a condition for retransmitting its CBS affiliates in local markets.

Viacom says its fee demands are reasonable, given its combined CBS affiliates and cable channels reach 20 percent of the American viewing public.

"They recently hiked their subscribers' bills by as much as a month. Yet they are unwilling to consider paying an additional six cents a month per subscriber for the right to carry our channels," Viacom said in a statement.

Viacom has completed deals with Comcast Corp., Cox Communications and DirecTV in the last six months and says it is asking for similar terms from EchoStar.

Analysts said if the dispute lasts more than a week, EchoStar could begin seeing defections to local cable TV service or to its larger satellite competitor, DirecTV.

"The question is how many subscribers are going to switch from EchoStar and go to cable and DirecTV to get their programing," said Tom Watts, analyst at investment bank SG Cowen.

In a research note, Oppenheimer & Co. analyst Thomas Eagan said EchoStar defections could accelerate in major markets starting March 16, when CBS airs the NCAA basketball championship known as "March Madness."

But Viacom will also take revenue hit if the dispute drags on. SoundView's Hill estimates Viacom earns between $5 and $6 per EchoStar subscriber for its cable networks in affiliate fees and advertising revenue. (additional reporting by Kenneth Li and Sinead Carew)



TOPICS: News/Current Events
KEYWORDS: cbs
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1 posted on 03/09/2004 11:34:29 AM PST by Tumbleweed_Connection
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To: Tumbleweed_Connection
It's time to trade my DIRECT TV service for Echostar.
2 posted on 03/09/2004 11:36:03 AM PST by mgist
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To: Tumbleweed_Connection
I have Dish. I say leave the Viacom channels off. They're filled with pretty much nothing but vile garbage anyway.
3 posted on 03/09/2004 11:37:34 AM PST by B Knotts
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To: Tumbleweed_Connection
Echostar Communications Corp. on Tuesday dropped local CBS stations from its satellite service in 16 cities and dropped MTV, Nickelodeon and other cable channels nationwide after contract talks with Viacom Inc. broke down. The impasse left an estimated 1.6 million people without CBS network television in cities like New York, Los Angeles and Miami the week before the CBS broadcast of the NCAA basketball tournament. It leaves another 9.5 million nationwide without 10 Viacom channels....
Echostar shares were up 2.4 percent in early afternoon trading, while Viacom shares were down 0.9 percent.

'Nuff said.

4 posted on 03/09/2004 11:38:51 AM PST by martin_fierro ("If there's one thing we actors know, it's ... er, what do we know again?")
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To: Tumbleweed_Connection
No Mo' South Park,, That's about the extent of the damage here in Dishland

Go Charlie!!!

5 posted on 03/09/2004 11:40:16 AM PST by NormsRevenge (Semper Fi Mac ... Support Our Troops! ... Defeat the demRats in November!!! ... Beat BoXer!!!)
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To: mgist
We use Dish Network, and lately they've been running banners listing about a dozen stations that are going to be removed. Is this the same thing? A lefty friend swears that this is the conservatives censoring TV.
6 posted on 03/09/2004 11:40:37 AM PST by EggsAckley (..................IGNORE the trolls...................it drives them crazy)
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To: Tumbleweed_Connection
"That's a shame" (/Seinfeld)
7 posted on 03/09/2004 11:40:37 AM PST by ClearCase_guy (You can see it coming like a train on a track.)
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To: Tumbleweed_Connection
Viacom said it was "dismayed and disappointed" by the action.

They shouldnt be... they were demanding outrageous fees from Echostar.

8 posted on 03/09/2004 11:43:29 AM PST by Lunatic Fringe (John F-ing Kerry??? NO... F-ING... WAY!!!)
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To: B Knotts
By noon today my three year old has made some concessions in his demand for Nick Jr. He has found some puzzles to do and he's playing with the dog. Better he learned this now than later on in life.

Way to go Echostar/Dish!

When I grew up I had three broadcast stations to view. Now my kid has like 300 at any given time? I say good riddance to Vilecom.

9 posted on 03/09/2004 11:43:49 AM PST by blackdog (I feed the sheep the coyotes eat)
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To: EggsAckley
Actually that was Viacom embedding the message in it's feeds to call Dish to tell them to keep your Viacom channels.

I don't like to be a third party involved in bill disputes, being asked to be an advocate without collecting my attorney's fees.

Trashy move on Viacom's part and a classy decision on Echostar's part.

10 posted on 03/09/2004 11:47:32 AM PST by blackdog (I feed the sheep the coyotes eat)
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To: blackdog
Dump the dish and go back to 3-6 channels, you'll be far happier and find that all those projects you didn't think you had time for, suddenly get done.

I haven't had cable now for over a year... other than when breaking news happens... I don't miss it a lick. Take your lives back....
11 posted on 03/09/2004 11:48:14 AM PST by HamiltonJay
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To: NormsRevenge
Go Charlie!!!

I must disagree. I have and am paying subscriptions for 3 satellite receivers, I have had excellent quality programming for over 6 years. One could easily say that I am among their oldest customers. When I purchased Americans Top 150 programming package, then paid extra for local stations, I paid for these stations. I recently took advantage of an offer to upgrade one of my receivers, but now must stay with them for a year or pay them for the upgrade. This was fine, but now THEY have changed the deal.

So, without warning they dropped the Comedy channel which I did watch, and a few channels I didn't watch. But the point is, they dropped channels from an advertised package without recourse and redress. What is to stop them from dropping all of FOX, Discovery, History, Biography, A&E and various local stations with the same lack of warning or consideration they gave me?

DirectTV had no problem increasing the rates; and as the rates have been flat for over 6 years, I don't have a problem with that. But, to increase the rates, and the very next month to drop channel coverage is inexcusable.

12 posted on 03/09/2004 11:48:26 AM PST by Hodar (With Rights, comes Responsibilities. Don't assume one, without assuming the other.)
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To: EggsAckley
Your leftie friend is insane. it's about money... pure and simple.
13 posted on 03/09/2004 11:48:37 AM PST by Lunatic Fringe (John F-ing Kerry??? NO... F-ING... WAY!!!)
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To: Tumbleweed_Connection
I'd drop CBS just for the sheer fun if the decision were up to me.
14 posted on 03/09/2004 11:50:16 AM PST by lilylangtree (Veni, Vidi, Vici)
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To: HamiltonJay
I am too rural to get broadcast television.

Fox News and Nickelodean make up 90% of our viewing. I wish I could just pay a small fee and pick four feeds and pay pro-rated. This of course was forseen by Madison Avenue types and is what causes bundling of feeds. That being if you want NickJr you need to take MTV and Comedy channel too.

15 posted on 03/09/2004 11:54:36 AM PST by blackdog (I feed the sheep the coyotes eat)
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To: Lunatic Fringe
Yeah, that's what I tried to tell her. She listens to lefty radio here in Santa Cruz.........that just about 'splains it!

Thanks.
16 posted on 03/09/2004 11:55:21 AM PST by EggsAckley (..................IGNORE the trolls...................it drives them crazy)
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To: HamiltonJay
I have witnessed however, that if my daughter plugs the Nintendo only half way into the coax jack of her television in her room she picks up Fox 11 out of Green Bay thru the Nintendo. Sort of an unintended booster device I guess. Fox 11 must be operating close to some processor frequency in the Nintendo. It works better than expensive antennaes we've purchased in the past.

I have a conical amplifier antenae that I can adjust with a spectrum analyzer to use in a pinch. It just takes up half the room and looks like something out of "Mars Attacks". I swore off all professional sports for the new year so I see no need to drag it out.

17 posted on 03/09/2004 12:04:30 PM PST by blackdog (I feed the sheep the coyotes eat)
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To: lilylangtree
What's a CBS?
18 posted on 03/09/2004 12:07:01 PM PST by blackdog (I feed the sheep the coyotes eat)
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To: blackdog
I have been for this for eons of time.. I only watch 4 channels regularly.. yet I must pay for a hundred I don't care to watch. The next "tier" packeage will cost me too much to have. In that tier is Fox programming. I am STUCK with programs I don't want to support politically or morally.. CBS, Disney, MTV, CNN... etc..

It is not technicaly hard to set up channel "a la carte" selection and billing. It is done now for many "Premium" channels.. I would rather pay a bit more for my 4 channels than the 96 in the "package" I don't want. It is the American way to let survival of programming be by individual selection and not coertion.. IMHO.

19 posted on 03/09/2004 12:08:29 PM PST by glowworm ( Rats and rat behavior, a rat is a rat is a rat..)
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To: martin_fierro
Both are down, now...as is the whole DJIA. Can't see this helping either side's share price.
20 posted on 03/09/2004 12:15:33 PM PST by ContemptofCourt
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