By Suzanne Vranica
DirecTV chief executive Mike White says the Weather Channel is
worth only "one quarter of the price" the channel wants the
satellite operator to pay, underlining how far apart the companies
are in the fee dispute that has blacked the channel out on the
satellite service for 10 days.
In a public letter to customers late Friday, responding to
mounting public attacks from the Weather Channel, Mr. White
confirmed DirecTV was trying to reduce the price it is paying the
channel. The Wall Street Journal has previously reported that
DirecTV was seeking a cut in Weather Channel's fees of more than
20%.
Given steadily rising program costs, Mr. White said, DirecTV
could keep its costs down by negotiating a "lower rate for an
existing channel or replace that channel with a better alternative
at a lower cost. That's what we're doing for our customers in this
situation."
In the weeks leading up to the blackout, DirecTV added another
weather-focused channel, Weather Nation, to its channel lineup.
Mr. White said the "Weather Channel or an alternative service
should cost less" because weather is widely available both online
and offline for free. He said that "a growing number of customers
have complained that the Weather Channel devotes 40% of its
programming day to reality shows."
A spokeswoman for the Weather Channel had no immediate
comment.
The Weather Channel disappeared from DirecTV's service shortly
after midnight on Jan. 13, the first time the channel had been
blacked out on any pay-TV service since it was launched more than
30 years ago. The channel is a unit of Weather Co., which is owned
by NBCUniversal Inc., Blackstone Group L.P. and Bain Capital
LLC.
The channel receives about 13 cents per subscriber a month,
estimates research firm SNL Kagan. The channel had been seeking an
increase of a penny, the company has said.
The Weather Channel has been relentless in its public-relations
and ad campaign against DirecTV as it seeks to convince consumers
that the removal of the channel was a public safety issue. Among
its tactics is a website dubbed keeptheweatherchannel.com, where
consumers can find information to complain to government officials
about the possible blackout as well. It also ran print ads in major
national newspapers this week.
The brouhaha represents the rising tensions between pay-TV
operators and TV-channel owners over fees and, more recently,
digital availability of programming. Indeed, Mr. White said in the
letter that "TV Networks feel it's their absolute birthright to
paid more and more each year for the same content they offer,
regardless of how many customers actually watch their
channels."
Mr. White added that this year, the company will be forced to
"pay 8% more for the channels you enjoy, yet, the average increase
we passed on to our customers was 3.7%, which was lower than the
increase in 2013, and also lower than many of our competitors."
Write to Suzanne Vranica at suzanne.vranica@wsj.com
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