In addition, NBC channels went off the air on DirecTV on October 1st, which was a big surprise for the customers. Popular NBC shows such as Sunday Night Football, This is Us, and Voice among others were off air because the two companies could not agree on a new deal to be aired on DirecTV channel. This removal affects the customers using the DirecTV, DirecTV Stream, and U-verse TV services. Well, let us find out why the NBC channel is no longer accessible on these platforms. Let's break it down.
The NBC Blackout on DirecTV: What Went Down?
The combined media and telecommunications titan AT&T lost its NBCUniversal deal renewal when the previous agreement did not renew on September 30th. Conventionally, when the contract between two media businesses expires legal options force the company, which is NBCU in this instance, to remove their networks from the distributor, in this case, DirecTV.
This immediately debarred DirecTV customers from NBC – a popular broadcast network alongside cable channels of Bravo, CNBC, E! This is NBC Universal Network which operates NBC, Bravo, CNBC, E!, G4, Golf Channel, Oxygen, SYFY, Universal Kids, USA Network and so many others. Other markets affected include regional sports networks where NBC Sports holds the local rights.
The removal is being blamed on the other by the two companies – which one is true? According to NBCU, they have negotiated in good faith while DirecTV is asking for imbalanced terms and is IMO seeking to impose a sub-market rate. On the other hand, DirecTV claimed that NBCU is asking for unfair hikes in pricing and is failing to consider the interests of its customers.
Why contract negotiations failed.
Of course, the basis of this conflict is quite simple – it is money. NBCU is demanding more Carriage Fees to supplement the amount that they spend on their programming and content. Every network bills cable and satellite companies such as DirecTV for a per-subscriber carriage fee that enables them to rebroadcast the feeds. As cable/satellite TV providers continue to lose subscribers, the networks which they source their programming from are demanding higher fees to compensate for the loss.
However, the raising of these fees translates to cost implications which may in turn be shifted to consumers by way of increased monthly bills. Hence, providers such as DirecTV resist large hikes to manage their internal overheads and the prices they charge to their customers.
Sources in the industry suggest NBCU was expecting double-digit percentage increases on their carriage fee. The previous agreement was signed almost a decade ago in 2012, indicating this renewal was an opportunity for NBC to leapfrog to the current market rate of other broadcast groups that NBC now has to compete with.
However in a difficult economic climate that many consumers today face, DirecTV probably could not afford such an increase in prices without affecting their bottom line or their customer’s prices.
How Long Could This Blackout Last If It Ever Occurred?
Regrettably, NBC channels will continue not being aired on DirecTV and its online platforms unless the two firms come to a formal agreement. Ideally, this is solved before the fall TV season commences or Ticket NFL fans could miss major games.
In terms of the historical reference, a situation where Viacom channels were in a blackout with DirecTV lasted 9 days out of which a compromise was made. Dish Network once had 27 Tribune Broadcasting local channels unavailable to it for 3 years before gaining renewed agreements!
In most of the blackouts, the blackouts can take days or weeks since neither party would want to be out of business permanently. NBC and DirecTV both have pressure to conclude this soon. Football season is a big hit and draws massive viewership and advertisement money to NBC and those Sunday Night football games are integral for DirecTV’s Sunday Ticket deal. The loss of NBC networks also poses a threat to the possibility of additional DirecTV clients shifting to competitors.
Outlook Going Forward
For the time being, all DirecTV subscribers can do is wait for their respective football team, and pray for a better deal to be signed shortly. Once a deal is reached or signed, NBCU’s networks will be returned to the channel lineups in the normal course. There is usually no legible announcement on the specific financial terms but if ever, trade papers will point out that it was done to the benefit of whichever party.
In the broad view, such types of blackouts might be seen as more regular in the future. Building a formidable library of shows and films, and competing with streaming services such as Netflix comes at a cost and thus, the growing demand for larger carriage fees from traditional TV distributors. But these providers have recently started resisting this by trying to regain their lost grounds as their subscriber base dwindles slowly in the streaming era.
But as is common, customers get to be victims of such political conflicts. The only way to not get affected in the long run is to look for a new pay-TV provider or look at using an antenna with top-shelf streaming services. Find out more about the current status of the conflict between DirecTV and NBC by checking their websites for more information.
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