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No MTV for 9 million DISH viewers
Dispute over rates means MTV, other channels blocked for subscribers to EchoStar satellite service.
March 9, 2004: 4:46 PM EST

NEW YORK (CNN/Money) - Subscribers to the DISH satellite TV service may want their MTV -- but Tuesday more than 9 million of them couldn't get it, or other Viacom-owned TV channels, because of a contract dispute.

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Due to a contact dispute, DISH satellite TV subscribers couldn't watch MTV, Nickelodeon and other Viacom-owned TV channels. CNNfn's Jen Rogers reports.

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EchoStar Communications Corp., the owner of DISH, said it pulled 10 Viacom channels that are available worldwide after the companies failed to agree on terms for a new contract.

Besides the MTV music network, channels not available included children's network Nickelodeon, Comedy Central and Black Entertainment Television.

Also pulled were 16 local CBS stations owned and operated by Viacom, including stations in New York, Los Angeles and Chicago.

Viewers who sought any of those channels instead saw a message that read:

"DISH Network sincerely regrets that this channel, owned and operated by Viacom, is currently unavailable. Viacom has demanded rate increases which are unreasonable and would contribute to a higher monthly bill for you. We continually strive to control costs on behalf of our customers and are hopeful that this matter will be resolved quickly."

EchoStar said Viacom was demanding a 40 percent rate increase for its channels and that DISH carry some less-popular Viacom networks in exchange for the rights to the local CBS stations.

"DISH Network will always have a place for CBS and we're willing to pay for retransmission rights, but Viacom is holding the public airwaves hostage, trying to extract concessions and higher rates on programming unrelated to CBS," Charles Ergen, EchoStar's CEO, said in a statement.

Viacom said in a statement it was "dismayed and disappointed" by the action. "It is hard for us to make sense of their position," the New York-based media company added.

Markets affected with Viacom-owned CBS stations
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Austin
Baltimore
Boston
Chicago
Dallas-Ft. Worth
Denver
Detroit
Green Bay, Wis.
Los Angeles
Miami-Ft. Lauderdale
Minneapolis
New York
Philadelphia
Pittsburgh
Salt-Lake City
San Francisco

"They recently hiked their subscribers' bills by as much as $3 a month. Yet they are unwilling to consider paying an additional 6 cents a month per subscriber for the right to carry our channels."

Viacom (VIA.B: down $0.35 to $38.90, Research, Estimates) stock fell nearly 1 percent in afternoon New York Stock Exchange trading while EchoStar (DISH: up $0.10 to $34.28, Research, Estimates) stock was little changed on Nasdaq.

If the dispute over the Viacom-owned channels is prolonged, DirecTV could see a boost in subscriptions, said Andrew Baker, an analyst with Cathay Financial.

"You would think DirecTV would launch a blitz in the affected markets, saying 'we have these channels.' And the longer this blackout lasts, the more people will go to DirecTV," he said.

DirecTV is owned by Hughes Electronics (HS: down $0.23 to $16.20, Research, Estimates) and News Corp.'s Fox Entertainment (FOX: down $0.65 to $28.20, Research, Estimates).

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Baker added that DirecTV faces less of a problem as it is a higher-end package and is less likely to be hurt by increases in programming costs.

EchoStar's move, which analysts say affects 9.5 million national DISH customers, follows a lawsuit from EchoStar in January after a four-month deadlock over rates and conditions.

EchoStar said it would provide a $1 monthly credit to customers who lose the Viacom national channels and a $1 monthly credit to customers who lose the CBS stations in their markets.

The DISH service Web site -- http://www.dishnetwork.com/ -- was slow and difficult to load Tuesday afternoon and the waiting time for callers to the company's 800 number was about 20 minutes.  Top of page


-- From staff and wire reports.

Andrew Baker does not own any shares of the companies mentioned, nor does his firm have an investment banking relationship with them.




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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.