Pay-TV's fight with content providers leaves millions of subscribers in the dark

Carriage fee  fights have left 19 million pay-TV subscribers without some content this year as impasses between service providers and content owners have led to five blackouts so far this year, the most in a decade.

AT&T, Cablevision and Dish Network have, at some point during the year, lost programming ranging from the Hallmark Movie Channel to the Oscars. And, more is likely to come as content providers look for higher fees and providers look to cut costs and contain the escalating expense of providing a wide range of content.

"There is increasing pressure for distributors to push back on rate hikes in a tough economy where the consumer is struggling," BTIG analyst Rcih Greenfield told Bloomberg. "As programming costs continue to rise, these battles are becoming bigger and higher profile."

The cost of programming is up about 10 percent in 2010, Bloomberg reported, increasing pressure on service providers that say roughly half their operating costs come from programming expenses. Plus, operators say, the rising availability of content that they're paying increasing rates for via free over the top delivery leaves them in a quandary, and is cause for concern.

"The idea that the programmers, who are charging more for their programming, are then taking that programming and making it free on the Internet--that really pushes the envelope," said Cablevision CEO Jim Dolan at an investor conference in September.

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Related articles:
AT&T pulls plug on Hallmark channels for U-verse subscribers
U-verse could lose 'Mad Men,' 'Bridezillas'
Operators need to move faster on content-rights deals for TV

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