Media Consolidation: the effects

Posted on March 9, 2004 by Gene

A lot of Dish Network customers are waking up to the new reality of the consolidated media marketplace: Dish is no longer carrying Viacom-owned channels.
Viacom is the corporate giant that owns CBS, UPN, Paramount, MTV, VH1, Nickelodeon, Comedy Central, etc. etc. etc. In negotiating with Dish Network for carriage of their slate of channels, they made two demands: first, they want to raise the fees nearly 4 times the rate of inflation. Second, they used a tactic that is now commonplace with the huge media companies––they insist that Dish carry unwanted channels in order to carry high-value channels like CBS. Despite some missteps, I have always been impressed by Dish Network’s commitment to what’s best for their customers, and they are refusing to pay the high Viacom prices (which would then be passed on). So, Viacom has yanked their permission to transmit these channels. No doubt, Dish will get blamed rather than the media giant.
It’s become extremely difficult for independent cable and satellite companies, who now must deal with monopolistic practices from huge media conglomerates. Some companies are trying to side-step this by partnering or buying media companies themselves — like Comcast’s bid to buy Disney, which would garner then ABC and ESPN among other channels.
Of course, what this means is that someday you may have to subscribe to several cable companies. In order to get Fox channels, you’ll need to get DirecTV (owned by NewsCorp); to get HBO and the WB, you’ll have to get Time Warner cable; and if you want to watch ABC you need Comcast.
This is getting a little ridiculous. I very much doubt that this is what the FCC charter envisioned. Michael Powell, where are you?