After Sky accused Discovery Communications of demanding exorbitant rates for its channels, Discovery is firing back at Sky, accusing the U.K. pay-TV provider of being misleading.
“Sky’s statement is unfortunately based on ‘alternative facts,’” Discovery said in a statement. “The truth is Sky pay us less now than they did in 2006. We have asked for a few extra pennies per year for each Sky household. We would never choose to come off Sky and abandon our viewers who we value enormously.”
Discovery’s latest missive in the brewing retrans battle comes after Sky issued a statement late last week accusing Discovery of asking for close to $1.25 billion for its channels.
“We were prepared to pay a fair price for the Discovery and Eurosport channels and invest more in those channels to make them even better for our customers. We have offered hundreds of millions of pounds to Discovery, a US$12B American business but that wasn’t enough. They asked the Sky Group to pay close to £1B ($1.25B) for their portfolio of channels, many of which are in decline,” Sky said in a statement, according to Deadline.
“Sadly, we have now had to prepare for Discovery to take their channels away from Sky customers, as they have threatened to do. It is Discovery’s choice to do this, not ours. We never left the negotiating table and they haven’t come back to it since they made their threats public this week.”
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The dust-up between Discovery and Sky has some analysts wondering whether the programmer is ready to make up revenue with an OTT strategy should it continue to find itself on the outside of the pay-TV bundle looking in.
“We believe Sky is fully committed to shifting the dollars they pay Discovery into exclusive, original programming (an increasingly important focus to distinguish their platform from peers). In turn, the question is can Discovery accept lower fees from Sky and try to make it up through future over-the-top bundles (vMVPDs) and their direct-to-consumer ambitions (with products like Eurosport Player)?” BTIG analyst Rich Greenfield asked in a research note.
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“From a programmer standpoint, we fear the aggregate number of direct-to-consumers subs is less than they believe are out there at the price points they need to compensate for what is happening to their base, linear bundle revenues; not to mention the continuity risk of not having to sign up for direct-to-consumer offerings for the entire year,” Greenfield added.