Old WSBK TV logo

WBSK logo from the 1970s, courtesy of Logopedia

One of the distinguishing characteristics of Dish Network vs. DirecTV or cable is that Dish sells a la carte subscriptions to the five legally protected superstations. As rare examples of distant over-the-air TV, stations WBSK, WWOR, WPIX, KWGN, and KTLA are available through Dish individually or in a package.

That’s all going to end September 19, less than two weeks from now, when Dish will no longer offer the superstations, although existing superstation subscribers will be grandfathered indefinitely according to an email from Dish to its retailers. That news was reported by the SatelliteGuys site, which is usually right about such things.

Those five superstations don’t include the two you might guess, WGN and WTBS, not any more. Those five are the suvivors of the brief superstation wave that hit cable TV in the 1970s and 80s, with their grandfathered status preserved by a specific clause in the Satellite Television Extension and Localism Act (STELA). (WGN and WTBS evolved to add non-OTA national versions of themselves, partly to skirt rules about cable systems importing distant OTA signals. Long story.)

Now Congress is debating STELA’s renewal, and some legislators want to add on an overhaul to all retransmission consent rules. There are contentious committee hearings going on now, and I’ll bet that no one at those hearings even mentions superstations. My guess is that Dish sees that Congress will overhaul STELA one day soon and that when it does, the superstation exemption will be gone.

When I chose Dish 12 years ago, the superstations were a large factor, but now it would be easy to say that these grapes have already soured. All five superstations once provided plenty of major-league baseball coverage, but this year they combined for only about 50 games, split between WWOR and WPIX. With the rise of second-tier networks (WB and UPN, then CW and My TV), these “independent” stations had less and less unique programming. And with HD as the new basic standard for most TV viewers, Dish still delivers only the SD version. A few years ago, I noticed how little I was watching them, so I dropped them.

If you want one last chance to get distant OTA channels delivered via pay-TV satellite, this might be it. I don’t know if they’re really worth $7/month, but I figured I’d subscribe to them one more time before it’s too late.

Update: It’s September 19, and sure enough, Dish no longer offers the Superstations on its a la carte programming page. Hope you subscribed if you really wanted them.

Two businessmen arm wrestling.

© DepositPhotos / photography33

The following is a guest blog post by David McAdams, professor of economics at the Duke University’s Fuqua School of Business and author of the forthcoming book, “Game-Changer: Game Theory and the Art of Transforming Strategic Situations”. This article, titled “How Time Warner can win its CBS showdown”, originally appeared in the (Durham NC) Herald-Sun on Aug. 29, a few days before Time Warner Cable settled its retransmission dispute with CBS.

Since Aug. 2, Time Warner Cable has blocked about 3 million of its customers in New York, Los Angeles, Dallas and other areas from receiving their local CBS broadcast. The cable giant is balking over the network’s demand for higher fees to retransmit CBS programming.

Most industry watchers seem to agree that Time Warner is likely to lose this showdown, giving in to CBS sometime around the start of the NFL season in early September. But with new tactics and a little strategic imagination, Time Warner can turn the tables on CBS and win. Here’s how.

It starts with a seemingly submissive announcement by Time Warner chairman and CEO Glenn Britt:

“The CBS blackout ends today. Despite all our misgivings at the unfairness of this deal, we will accept CBS’s demand to charge our subscribers $2 per month to view its broadcast programming over our cable network.”

This might seem to be admitting defeat, but then Britt adds the following condition:

“There’s just one thing. We believe that subscribers who don’t want to watch CBS over our cable network shouldn’t be forced to pay this unreasonable fee. Everyone pays the same amount for most channels, because that sort of pricing typically allows us to negotiate lower rates. But when a channel goes off the deep end and refuses to accept a reasonable price, only those who want the channel should be forced to pay.”

CBS would never willingly accept this deal, as many cable subscribers would undoubtedly “opt out” and view their favorite CBS programs for free through a standard rooftop antenna. But what can CBS do? Undoubtedly, CBS’s chief Leslie Moonves would come out and decry the notion of giving customers an opt-out option as a “sham,” as he has in the past, but there’s a problem.

Now that Time Warner has restored CBS programming and even accepted CBS’s demand for $2 per month, CBS is in an awkward position. If access to CBS programs really is so valuable to cable subscribers, as the network has insisted all along, how can CBS demand that they be forced to pay?

Certainly, if CBS were to take a hard line and withhold its permission to rebroadcast over this issue – thus triggering another blackout and denying all Time Warner subscribers access to CBS programming because they insisted on charging people who don’t even watch CBS over cable — CBS would now be the one in the hot seat. Knowing this, Time Warner would now be the one comfortable to “wait it out” as long as necessary.

In the end, CBS would have no choice but to accept an opt-out clause for Time Warner’s cable subscribers, or else back down and accept a lower per-subscriber fee. Time Warner would not only “win,” but also lay the groundwork to control cable content costs while avoiding disruptive blackouts in the future.

The recipe for cable-company victory is actually quite simple:

  1. Allow every channel to charge whatever it wants. However, if a channel’s demand is “unreasonable,” only accept if the channel also agrees not to charge for subscribers who opt out.
  2. If the channel insists on charging everyone, refuse but do nothing. Force the channel to block its own transmission so that customers understand that blackouts are not Time Warner’s fault.
  3. Inform subscribers of their opt-out options and make sure that the opt-out process is simple and transparent. If few subscribers opt out of a channel, you will have learned that that channel’s demand wasn’t so unreasonable after all. But if many do opt out, you’ll have a powerful argument in hand when the next negotiation rolls around.

If cable companies like Time Warner (and satellite-TV providers like DirecTV) stick to this strategy, content providers like CBS won’t have an incentive any more to demand fees that even they believe are beyond what most subscribers are willing to pay. That’s a good thing for Time Warner, and a good thing for consumers as well.

Les Moonves in 2001

Les Moonves, photo © DepositPhotos / Ryan Born

There are a lot of times when I like the Consumer Electronics Association. In the battle for unfettered access to entertainment, the CEA is usually on the side of consumers, who often lack a strong voice of their own. But this week the CEA came out with a doozy of a report, saying its research shows that only 7% of US households rely on over-the-air (OTA) for their television viewing. The CEA said this lined up with a 2012 Nielsen study that said 9% of US households rely on OTA, down from 16% in 2003.

For all that to be true, there must have been thousands of families who unplugged their rooftop antennas so they could start paying for cable. Oddly, I couldn’t find any articles that mention those families.

The National Association of Broadcasters reacted by pointing to a different study that said 19.3% of homes rely exclusively on OTA television, up from 14% in 2010. That sounded like a much closer match to what I’ve read and seen over the past couple of years.

Just as I was feeling vindicated, CBS CEO Les Moonves spoiled my buzz. Only a few days after his trade organization re-emphasized its viewer numbers, Moonves told analysts in a conference call that those viewers really didn’t matter anyway. According to Deadline, Moonves said, “Right now over 85% of our viewing is done through satellite, cable, or the phone companies. The remaining 15% are not the most advertiser friendly, appealing to advertising.”

You put all that together, and the finished message from CBS is “There are a lot more OTA viewers than you think, but they’re not very important.” There’s a corollary to that: Anyone smart enough to dump cable and save money is not the kind of sucker an advertiser wants.

Television in graveyard.

© DepositPhotos / iofoto

If you haven’t noticed, Dish Network’s abrupt suspension of service to nimbleTV customers has reached the tech news mainstream. Peter Kafka at All Things Digital ran the story yesterday, including quoted statements from Dish and nimbleTV. He also included a reference and link back to FTABlog. (Thanks!) If this is your first time here, welcome, and feel free to read more about nimbleTV and other stuff.

Kafka posted his story about 2 pm Eastern Time. About a half hour before that, I got the latest customer update from nimbleTV, this one signed by CEO Anand Subramanian. He asked nimbleTV customers to “stand with us” to defend the right to purchase and watch TV from anywhere. “By being an early customer of nimbleTV, you are helping pave the way for the TV of tomorrow,” Subramanian wrote, adding “we promise you’ll have (service) back soon.”

What we still don’t know is the reason why Dish shut down nimbleTV’s programming. According to the statements in Kafka’s article, it might have something to do with being erroneously considered an official Dish reseller. “While we have been upfront with our customers that nimbleTV has no direct relationship with any TV provider, Dish did not want our Web site to mislead others into thinking that we have a direct affiliation with Dish,” Subramanian told Kafka. Dish’s terse statement was, “NimbleTV is not an authorized Dish retailer, and is not authorized by Dish to market or promote our services.”

Even if that’s what Dish told nimbleTV, I’ve got a hard time believing that’s the real reason for pulling the plug. Dish is not oblivious enough to miss nimbleTV as it went through its lengthy beta and public launch, only to notice it two weeks ago. I’m still guessing that something changed, either with different personnel within Dish or because of a suggestion by an outside party. I wonder if we’ll ever know.

Meanwhile, nimbleTV endures. I’ve always thought it’ll be easier for nimbleTV to import programming to the US than the other way around, mainly because I don’t know how hard it’ll be to line up pay-TV subscriptions in other countries. The statement that nimbleTV gave me today lines up with that idea. After noting that it doesn’t plan to partner, per se, with any pay-TV provider, the statement concludes, “In addition to doing everything possible to have nimbleTV service up as soon as possible for the customers who have grown to love their nimbleTV, the company is expanding the business and will soon be adding new provider options from the U.S. and abroad.”

And that’s where we’ll leave it until nimbleTV starts serving up programming again. Coming up next on FTABlog, the over-the-air DVR that you already have but don’t know about.

Test pattern on old TV before clouds

© DepositPhotos / Xavier Gallego Morell

You remember that when I last wrote about nimbleTV, I told you about this great new service that allows out-of-market viewers to subscribe to a pay TV service over the internet. At that time, the only service it offered was Dish Network. Now it appears nimbleTV doesn’t even have that.

Although I can’t get anyone to comment on the record about it, what I do know suggests that Dish abruptly cut off nimbleTV last Friday. If that’s true, it could have been because Dish’s programming partners pressured Dish to stop service to out-of-market viewers. Or it could have been that Dish didn’t like how nimbleTV can combine the output of several receivers to any given customer. Or it could have been a Dish billing hiccup when its system noticed all the subscribers with out-of-market service addresses. Or it could be something completely different.

One thing I’ve heard repeatedly from nimbleTV is that it plans (hopes?) to restore service in about two weeks. Does that mean that nimbleTV is negotiating with Dish to restore service? That it’s scrambling to find another programming source? That it has another source already lined up, and that it’ll take about two weeks to swap out all those receivers and change nimbleTV’s programming database? That Dish promised to fix its billing hiccup in about two weeks? Or that suggesting a fixed length of time keeps customers happier when you’re working to solve an open-ended problem?

Here’s the timeline of what I know. On Friday, nimbleTV went off the air for some subscribers, perhaps all of them. Then Friday afternoon, nimbleTV sent out an email that said in part, “nimbleTV is currently undergoing system maintenance and upgrades owing to unforeseen circumstances. … Our team is working hard to restore the service and we hope to be out of maintenance soon.”

Saturday evening, nimbleTV sent out a longer note. It included the understatement, “The maintenance period is going to last longer than expected.” The email also included the first real hint of what happened: “We have found that a billing change in the TV provider’s portion of the charge has affected a number of our subscribers. Your account seems to have been affected by this as well. We are working with the TV provider to resolve such issues going forward. It may take up to two weeks for the billing issue to resolve completely and for service to be restored.”

Sunday afternoon, nimbleTV sent out a shorter recap, primarily emphasizing that it will issue refunds to affected subscribers. “The reason for these issues is due to the TV provider putting a hold on your service, we are investigating the reason behind the un-notified hold.”

Since then, I’ve been asking everyone I know at Dish and nimbleTV for further comment, and all I can get are reiterations of the same information. Heck, I can’t even get anyone from nimbleTV to say the word “Dish”. For example, nimbleTV’s PR guy told me that their official statement is “nimbleTV is aware of service issues which some users are experiencing and is in the process of addressing them.” He wouldn’t say anything else.

Thank goodness for Twitter; searching it shows that I’m not alone. Several other users are reporting the same stuff I’m seeing. One tweeted, “hope this isn’t the beginning of the end for the service.” As long as nimbleTV refuses to tell the world what’s wrong, all we’re left to do is imagine the worst.

Update: A commenter helpfully pointed to a tweet by Dish Retailer News (@RetailerNews) from July 10: “Retailers- Important RetailerNews regarding NimbleTV. Please read” a password-protected link. Hmm.