Where do you check the weather: phone or TV? That’s the essence of the fight between DirecTV (DTV) and Weather Channel, which disappeared early today for 20 million subscribers of the satellite broadcaster. The companies have been waging a public battle over how much DirecTV will pay for the channel.
DirecTV wanted to cut the fees it pays for weather programming by “more than 20 percent,” Weather Channel’s Chairman and Chief Executive Officer David Kenny says. “I think it’s done,” he says of the talks. “There’s never been an earnest negotiation. They have taken a very arbitrary stance that they don’t need the Weather Channel on DirecTV.”
The satellite broadcaster sees weather as a Web function—the average app-equipped smartphone can tell you whether you’ll need an umbrella quicker and more easily than a television can. DirecTV also argues that Weather Channel has replaced roughly 40 percent of its live forecast broadcasting with reality TV-style programming such as Deadliest Space Weather, Coast Guard Alaska, Prospectors, and Hurricane Hunters. “Consumers understand there are now a variety of other ways to get weather coverage, free of reality show clutter, and that the Weather Channel does not have an exclusive on weather coverage–the weather belongs to everyone,” Dan York, DirecTV’s chief content officer, said in a statement. In September, DirecTV CEO Michael White told a media conference that his company’s retransmission fees had surged 600 percent since 2010, leading to a 4.5 percent price increase for customers in 2013, with an additional, smaller but “meaningful” increase planned for 2014.
The Weather Channel, owned by NBCUniversal (CMCSA), Blackstone Group (BX), and Bain Capital, was seeking a 1¢-per-subscriber increase. The company receives 13¢ per subscriber, according to estimates from SNL Kagan. Kenny says the recent “polar vortex” and heavy snows across the nation earlier this month had boosted ratings and demonstrated that severe weather makes Americans turn to their televisions for coverage. The channel posted a “countdown clock” on its home page before the midnight deadline for a deal, and has been urging viewers to contact DirecTV and members of Congress about the dispute, casting it as a matter of public safety.
The satellite broadcaster has replaced the channel with weather from WeatherNation TV, a Colorado-based weather forecaster launched in 2010 by Dish Network (DISH) amid its own carriage-fee dispute with Weather Channel. That programming is also available for free on Roku’s streaming boxes.
“It seems to be a service that cares only about football,” Weather Channel’s CEO says in a dig at DirecTV’s pricey NFL Sunday Ticket package.