Comcast says its contract with EchoStar states OLN has to have access to 40 percent of its subscribers when running its NHL games. But that wouldn't happen if EchoStar moves it to a tiered package.
So when EchoStar made the move to the tier, OLN took off its recently bought and pricey NHL games, and put on other, cheaper, programming. Then, in return, and without much warning, EchoStar threw off OLN completely.
Who should go to the penalty box?
Both EchoStar and OLN should go in for roughing. Though EchoStar says it wants to give its consumers more inexpensive programming, it would like to grab more money for running sports programming--one of the areas where programming distributors can make any money.
OLN quickly, and without much consultation among distributors, sunk $200 million into a three-way deal with the NHL--one where analysts say the network will almost certainly lose money. They can ill-afford to get squeezed on their distribution deals.
OLN doesn't want to be moved to the pricier tiered package--where some other cable operators, such as Cablevision Systems, have stuck OLN. OLN also changed its NHL programming for less expensive fare when Cablevision Systems moved OLN to a pricier $4.95 a month package. Cablevision is grumbling, but hasn't taken off OLN. Yet.
EchoStar has moved quickly before in throwing off programmers like Viacom's cable networks in 2004 and Walt Disney's ABC Family in 2001.
Of course, this whole issue goes back to offering consumers exactly what they want--which is not exactly what cable operators or satellite distributors are doing.
In theory, cable programmers shouldn't be able to get a free ride from cable or satellite consumers who will never watch NHL hockey. But that's not how the business works.
OLN is not only to blame. Add in dozens of other specialty channels that consumers don't watch. Studies have shown that out of the hundreds of channels that come into U.S. homes, people only watch about 10 or so.
EchoStar isn't clean here either. Programming disruptions aren't good for consumers--they can smell rat, a business rat at that. Public relations-wise, they shouldn't promise what they can't deliver.
So the system is broken. Consumers can't pay exactly what they want when they want, at least right now. Video On Demand is coming, as are a host of other technologies. But right now we are left with hard-checking companies who are forced to make traditional, sometimes confusing to the public, programming deals.