Sacramento-area DirecTV customers had no access to KCRA and its sister channel for a second day Monday, the latest casualty of a growing dispute between pay-TV providers and broadcast stations over transmission fees.
DirecTV’s contract expired at 12:01 a.m. Sunday with Hearst Television, meaning KCRA and other channels went dark in 28 cities across the country.
Hearst said in a statement Sunday that DirecTV was trying to negotiate a new deal at “below market rates.” DirecTV’s parent, AT&T, issued a statement saying Hearst was trying to grab “a significant increase in fees just to allow those same families to watch shows available for free over-the-air and that the broadcast networks typically make available for free online and through new digital apps.”
Media analyst Jan Dawson said the dispute reflects an evolution in how TV broadcasters, who are wrestling with diminishing advertising revenues, view transmission fees.
A few years ago the stations were content to let pay-TV providers transmit their signals for comparatively little money. Now they’ve come to realize “they’re very valuable as part of the channel lineup,” said Dawson, the head of Jackdaw Research in Provo, Utah. “These companies clearly want new revenue streams.”
Dawson said these fees made up less than 10 percent of the broadcasters’ revenues three or four years ago; now at some companies the fees account for more than 30 percent of revenue.
The DirecTV-Hearst dispute affects about 16 percent of households in the four-county Sacramento region. It covers KCRA’s flagship station, Channel 3, and its sister station, KQCA My58. Beyond Sacramento, the blackout hit stations in markets such as Boston, Baltimore and Pittsburgh.
Dawson said these types of blackouts are usually resolved quickly, as customers pressure the pay-TV providers to make deals with the stations. Notably, DirecTV had a similar blackout with Cox Media Group stations Monday, but a new deal was worked out in a matter of hours.
However, some of the fee disputes can last weeks or longer. Perhaps most famously, Los Angeles Dodgers games have been blacked out in most of Southern California since 2014 over a fee dispute between pay-TV providers and the Dodgers’ network.
Officials with KCRA couldn’t be reached for comment Monday. Callers to the station’s switchboard heard a taped message urging DirecTV customers to call the satellite provider. They were also reminded that they could watch the stations for “free, over the air” with an antenna, or via cable TV or another satellite provider.