DirecTV May Drop Smaller, Less Popular Networks to Keep Programming Costs in Check
NEW YORK -- DirecTV executives said Thursday that they will look to fight continued program fee increases, in part by dropping smaller, less popular channels as the company recently did with Comcast's G4 network.
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At the company's investor day here, executives from the satellite TV giant also gave insights into their thoughts on other key issues affecting content providers and network owners, such as possible a la carte pricing, an emerging premium VOD release window for movies and the much-discussed future of retransmission consent payments to broadcasters.
In a presentation, executive vp of content strategy and development Derek Chang said distributors like DirecTV continue to face program fee increases, which in the case of sports often run in the double-digit percentage range. Plus, they have noticed a clear shift of leverage to content owners, which are often part of major conglomerates these days. But distributors don't have "a bottomless pool of money," he emphasized. As a result, DirecTV will look long and hard at its program lineup and will in certain cases not renew carriage deals with channels that are "not necessary or not worth" their cost.
G4, for example, was "not widely viewed" and has so far "not been missed," Chang argued. DirecTV CEO Mike White later told reporters that his team felt program expenses for Comcast networks were growing so much that something had to give, and DirecTV decided to drop G4. "I told
Brian Roberts that total payments to Comcast will grow at an unsustainable rate next year," he said.
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