uploads///Retrans fees

How Much Are Dish Network’s Affiliate Fee Disputes Affecting Its Pay-TV Business?

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Jan. 4 2017, Updated 9:06 a.m. ET

Dish’s retransmission fee disputes

Dish Network (DISH) has experienced disputes with broadcasters and networks over carriage or retransmission fees. Earlier in 2016, the company was involved in a dispute with Viacom (VIAB), Comcast (CMCSA), and Tribune Broadcasting.

Dish was asked at the company’s fiscal 3Q16 earnings call whether its affiliate fees disputes had affected its experiment of distributing free Hopper antennas. The company stated that Hopper antennas are being used more by cord-cutting customers who have clubbed the Hopper antenna with streaming services like Netflix (NFLX) and are happy with the viewing experience.

Dish also stated: “There could be a breaking point where people will go through the pain of getting a Hopper antenna, but we’re not there yet. The vast majority won’t do it yet.”

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Reasons behind affiliate fee disputes

The pay-TV industry is currently going through a transitional phase. Many pay-TV subscribers are severing their cable cords and moving to online content providers like Netflix (NFLX), particularly due to high cable bills. This cord-cutting has resulted in increasing pressure on revenues for pay-TV operators like Dish, and now pay-TV operators are reluctant to pay higher distribution fees to broadcast networks.

But as the chart above shows, according to a report from the National Association of Broadcasters (citing research from SNL Kagan), the year-over-year growth in retransmission fees is expected to slow to 10% by 2018.

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