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Six questions about DirecTV's fight with WIVB's owner, including who is to blame

The Larry David in me became annoyed over the long holiday weekend at nonstop crawls run by WIVB-TV (Channel 4) and WNLO-TV (CW23).

The crawls, which appear to have ended this morning, claimed DirecTV’s owner “abruptly” dropped the channels and asked viewers to call a phone number to tell the satellite service owned by AT&T to put the channels back on.

It was a curious strategy because I doubt DirecTV would carry those crawls bashing it on the two stations that are off the satellite service.

However, why were I and other cable subscribers being subjected to the crawls that interfered with program viewing when the dispute didn’t impact us?

The dispute is similar to similar ones over the years between television groups and carriers over retransmission fees paid to carry channels that often get the highest viewing in local areas.

Here are six questions and answers about the dispute:

What’s it all about? It is a national issue, not a local one. Channel 4 and CW 23 are two of more than 100 stations owned by Nexstar Media Group in 97 markets that have been bounced off DirecTV. Channel 4 is a CBS affiliate and WNLO a CW affiliate, but NBC, ABC, Fox, and MyNetwork TV stations owned by Nexstar reportedly also are impacted. Naturally, it is about money. Nexstar wants more of it from DirecTV to carry its stations, which air network prime time network programs.

Which company is to blame? They each blame each other. According to Multichannel News, Nexstar said it offered to allow the stations to stay on DirecTV through Aug. 2 while contract negotiations continued. Nexstar added it recently came to agreements with other carriers and is just asking for the same fees it has received in those deals.

AT&T, which owns DirecTV, claimed Nexstar removed its stations after it rejected a deal that would have paid the company more money. It claimed that Nexstar is “demanding the largest increase that AT&T has ever seen from any content provider.”

Nexstar denies pulling the stations.

Things got a little ugly.

The Hollywood Reporter noted a Nexstar claim, without evidence, that AT&T is using its power from its acquisition of Hollywood giant Time Warner about a year ago “to prioritize its own content at the expense of consumers, and insisting on unreasonable and extreme terms that are totally inconsistent with the market."

Meanwhile, AT&T noted that prime time network programs have lost about half their audience in the past five years. However, even though network television has lost a large percentage of prime time viewers, many programs still get a higher percentage of viewers than most programs on cable.

Which company has the best leverage? Right now, DirecTV, would appear to have it, primarily because prime time network programming in the summer isn’t exactly must-see TV. The crawl on Channel 4, a CBS affiliate, advises DirecTV viewers they won’t be able to see “Big Brother” now. I’m pretty sure most Buffalo viewers can live without it. Besides, more and more viewers know how to stream programs. “Big Brother” is available online to be streamed. All the networks now stream their shows, though not always at the same time they air on broadcast TV.

As far as WNLO, most CW prime time programs don’t average even a 1 rating in Western New York so it is highly doubtful any will be missed here. The most popular shows on WNLO are Channel 4 newscasts.

Once the National Football League regular season starts in September, the pressure might increase on DirecTV to get a deal done because Nexstar owns stations in NFL cities besides Buffalo, including San Francisco and Indianapolis.

Which company will get hurt the most? That’s tough to say. If the deal lasts for some time, DirectTV could lose some subscribers to cable or another satellite provider. But it is risky for consumers to change carriers because the one you switch to could be involved in retransmission arguments next.

Nexstar stations like Channel 4 could be hurt by losing local news audiences to rival stations, which would mean reduced advertising revenue. Channel 4 carries local news almost 10 hours a day on the two stations combined, starting at 4:30 a.m., and that provides a substantial portion of the stations’ revenue.

When will it end? It might be easier to predict how many games the Bills will win this season. It could be resolved as quickly as today. I would think it certainly would be over well before the start of the NFL season. I’m sure Channel 4 would like a deal to be done before Aug. 23, when CBS carries a Bills preseason game at Detroit. But once again, this is a national issue, not a local one, and Nexstar has bigger things to worry about than what is best for Channel 4.

Which company should you root for? This is a relatively easy call. Nexstar wants more money from DirecTV to carry stations that most viewers can see for free over the air with a decent antenna. If DirecTV pays Nexstar more, it is likely to pass the cost down to the subscribers of the satellite company. In other words, if Nexstar gets more money, DirecTV subscribers eventually will likely get higher bills.


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