CBS channels go dark on U.S. Dish network over fee dispute

By Anjali Athavaley and Jessica Toonkel
FILE PHOTO: A Dish Network receiver hangs on a house in Somerville, Massachusetts, U.S., February 21, 2017. REUTERS/Brian Snyder/File Photo

By Anjali Athavaley and Jessica Toonkel

(Reuters) - U.S. satellite television provider Dish Network Corp's customers in 26 states lost access to local CBS Corp stations on Tuesday, following a dispute over the fees Dish pays to carry CBS content.

If the blackout continues, nearly 3 million Dish subscribers will not be able to watch the NFL's Los Angeles Chargers play the Dallas Cowboys on the Thanksgiving holiday on Thursday. Subscribers will also miss Southeastern Conference football coverage over the weekend.

The dispute revolves around how much Dish will pay for 28 local CBS channels as well as three cable channels: Smithsonian Channel, Pop and CBS Sports Network.

"We're obviously interested in carrying CBS broadcast networks but feel like the other three middling cable networks are just a tax," said Warren Schlichting, Dish executive vice president of marketing, programming and media sales, in an interview.

He added: "We're ready to resume negotiations, but they haven't been in touch."

CBS said that Dish had signed carriage deals with media companies with far more networks than those offered by CBS.

"This particular dispute is yet another example of (Dish) punishing its subscribers instead of negotiating a fair carriage deal that reflects the current marketplace," the company said in a statement.

Negotiations between content distributors and programmers have become increasingly fraught as more viewers become 'cord cutters,' opting to watch their favorite shows online.

In August, CBS Chief Operating Officer Joe Ianniello told investors that the CBS broadcast network generates over 10 percent of total audience ratings across the TV landscape, but only gets two percent of distribution fees.

Dish said it was offering free over-the-air antennae to customers in affected markets to allow them to access CBS. Eligible customers have the option of dropping local channels from their programming packages, a saving of $10 per month.

The company is also pointing customers to CBS All Access, the programmer's online streaming service, which offers a free trial for new subscribers.

CBS went dark during a similar carriage dispute with Dish in 2014, in a blackout that lasted about 12 hours.

(Additional reporting by Ismail Shakil in Bengaluru; Editing by Sunil Nair and Rosalba O'Brien)