Commentary

Fight Between Frontier, Sinclair Hurts Consumers, Tennis Channel, Spot TV Advertisers

  • by January 17, 2017
Advertisers and consumers suffer as a result of the impasse on transmission fee carriage negotiations by Sinclair Broadcast Group’s Tennis Channel, plus KOMO-TV (ABC Seattle) and KATU-TV (ABC Portland, OR) with Frontier Cable.  

Barry Faber, Sinclair’s EVP, Distribution & Network Relations stated, “We regret our efforts are unlikely to result in us reaching an agreement with Frontier prior to January 1st.”  He further suggested: “There are other video distributor options available.”

However, switching MVPDs can be a long process for cable/satellite subscribers and condo associations; communities are generally on a long-term contract. No worries, the Australian Open only starts Monday and the French Open May 28 with many tremendous events in between!  

Faber also confirmed: “Other tennis programming (NOT the same as what is on Tennis Channel) is available independent of any such MVPD by subscribing to Tennis Channel Plus. So OTT is not a proper complete alternative. "

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Frontier’s SVP Video, Steve Ward, failed to respond to a request from MediaPost for further information, however Frontier is claiming the carriage fee increases requested are egregious at ~80% to ~380% increase, which cannot be substantiated at this time. Many consumers (~1.2 million) who were switched to Frontier from Verizon FiOS mid-last year in Florida, Texas and California are reported as being disgruntled with a wide array issues, not the least, slow and poor service during the balance of 2016.  

Frontier now adds its avid, angry tennis fans!  

The latest industry Frontier video subscription estimate of ~1.24 indicates that Frontier has lost approximately 400,000 video subscribers since its Q2 (June 30, 2016) financial report, which indicated as totaling 1.63 subscribers million.

This report was one full quarter after the FiOS sale & acquisition on April 1 2016.  

Whether this is correct or not, how many more FiOS subscribers will Frontier lose? The financial problems facing Frontier, which is attempting to cut hundreds of millions in costs over the next several years, has been well documented in the business press. This does not bode well for these negotiations; as importantly, for Frontier subscribers or Sinclair advertisers at least short-term.  

Advertisers and their agencies will understand they now have issues with Sinclair in view of audience losses on their ABC stations in Seattle and Portland — and likely more significant on the Tennis Channel.  

Based on recent estimates for Frontier at less than 3% of the two Spot TV markets affected, the loss of households in Seattle-Tacoma & Portland DMAs (at least they are LPM markets!) while a small percentage (~3%), are still close to ~87,000 HHs or ~213,000 people 2+, which will impact station CPMs and reach.

That is, unless there is a significant switch by those consumers to a new MVPD.  A relatively larger audience loss in total will be incurred by the Tennis Channel notably in view of the three Southern “Tennis” states involved.  

Whatever the numbers, it appears consumers always bear the brunt of these service disruptions, which can extend for a considerable time. As such, the broadcasters and MVPD’s are muddying the waters in our “TV Everywhere” (TVE) and/or ”Video OTT” media economy to their disadvantage, though content providers ultimately always have the leverage.  

These re-occurring disputes also appear to support the argument for consumers to be allowed to package their preferred channels via their chosen distributor — at least until OTT becomes close to ubiquitous?  

Unless it is resolved, ATT’s DirectTV service retransmission negotiations with 33 Hearst stations in 28 markets may be the next story!  In the meantime, request all your “make-goods” immediately! 

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