I am sure at some point in time, the TV service that you use, whether it be cable, satellite, streaming or otherwise, has had an outage or blackout of certain channels or programs. So why does this happen?
All broadcasters of TV programs, such as Spectrum, Cox, DirecTV, YouTube, Hulu and others, have to pay for programming from the content providers, such as Disney, Nexstar Media Group, Paramount Global, and others. These broadcasters have contracts with these content providers that lock in the price for the term of the contract. Once that contract comes up for renewal, the content provider can then ask for any price they want for that broadcasting company to continue to have the privilege of broadcasting their programming (channels). However, if their asking price is too high, then the broadcaster may refuse to pay it, and the content provider will choose to not allow them to air that programming.
This recently happened back in 2023 when Disney dramatically increased the price of their programming which includes channels such as ABC, ESPN, Disney Channel, National Geo, and FX and Spectrum refused to pay the higher rate because they would then have to pass on the cost to their viewers, and they felt their viewership would drop too dramatically as the price increase would be unbearable for the viewers. As a result, the stations owned by Disney were temporarily made unavailable to Spectrum (and their viewers) until the two parties could come up with a compromise on the price increase. Once the compromise occurred, then the broadcasting of those programs resumed. However, one would expect that there will be a strong possibility that at some point in the future, their monthly TV bill will increase to cover the higher programming costs.
This happened again in August of 2024 when the DirecTv contract with Disney was up for renewal and they were unable to come to terms and Disney again blacked out all their channels on DirecTv. Unfortunately this was in the middle of the US Tennis Open and just prior to a significant College Football game. Needless to say, many viewers were not pleased.
If you have further questions or would like to explore alternative programming solutions feel free to reach out to Genesis Business Advisors today!
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