In my last post, I talked about the background behind the concerns of the AT&T-Time Warner merger, with the Department of Justice, rival companies, and some consumers expressing concern for the harms to market it would cause. Programming distribution company Dish , a paid television provider in competition with DirecTV, had channels HBO and Cinemax go dark. The previous deal between HBO and Dish, which expired at midnight on Halloween, had terms that were not re-negotiated by the deadline, the first time HBO has had its channels go dark as a result of failed negotiations.
According to Dish, HBO only offered a deal in which Dish would have to pay for a set number of subscribers to HBO channels, while Dish was concerned that the number of people who would actually subscribe to the channels wouldn’t match the guaranteed number set beforehand. HBO claimed that this type of deal was very common in the TV distribution industry, and Dish was offered lower rates.
In the past, Dish has blacked out some channels before, such as Univision, which is current blacked out due to a lack of a deal. But in this specific scenario, AT&T owns DirecTV, a direct competitor to Dish, leading some to believe that AT&T was specifically pricing out their competitors in a monopolist move, forcing consumers who wanted to watch HBO to switch to DirecTV in order to gain access to the channels.
What also makes this specific case interesting is that there’s significant publicity about the case after the Department of Justice’s appeal. The DOJ released a statement saying that the blackout of HBO on Dish was precisely what they were warning against when Judge Richard Leon approved the AT&T-Time Warner merger, as it’s likely that AT&T was raising prices for access to Time Warner channels in order to monopolize the market with their distributor DirecTV.
However, at the same time, the cable television industry still has competition and companies are always looking to get ahead. HBO president Simon Sutton suggested that the blackout of HBO on Dish was a publicity stunt on the part of Dish to make AT&T and HBO look bad in the face of the appeals by the Department of Justice, claiming that Dish wasn’t interested in renewing a contract for access to HBO channels even though they were open to negotiating a new deal.
But despite their statement, HBO continues to promote DirecTV to consumers looking for HBO channels.
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