DirecTV has introduced a new option on TV packages that lets consumers opt-out (and back in) of including local broadcast stations in their lineup, and receive a lowered monthly bill as a result of removing channels.
Dubbed as its “No Locals” package, both new and existing subscribers to DirecTV can opt out or in as frequently as they choose. If picking to forgo receiving all their local broadcast stations from DirecTV, the satellite TV provider said customers can expect an average monthly savings or discount of about $12 (or around $140 annually) on their TV bill. Since customers can opt back in or choose to remove local stations at any time, any resulting savings will be prorated on consumers bill based on when they initiate the change.
Consumers won’t be able to pick and choose which local stations they want to keep or exclude, but rather the opt-out/in ability applies to picking all or none of the broadcast stations licensed to serve in a customers’ respective DMA (designated market area).
While it varies by market, most DirecTV customers receive affiliates of ABC, CBS, NBC, Fox and often a CW affiliate. There are also often multiple PBS stations in the same market, occasionally along with MyNetwork, Telemundo or certain independent networks in some markets.
Current DirecTV customers need to call customer service to change up their local package lineup, while new customers can create an online account and indicate there whether they want local stations. Existing customers are expected to get online management capabilities for opting in or out of local stations soon.
In announcing the move, DirecTV indicated it’s all about optionality for consumers. With satellite and cable bills rising alongside increased fees, there may be consumers who don’t want local stations, those who only want channels at certain times of the year (such as when certain teams or sporting events are on), or some who prefer to get local programming through other means including via subscription streaming services, on national network and local station websites or through over-the-air (OTA) with free channels available through digital broadcast antennas.
“Consumers have been voting with their wallets for years that pay TV – as currently constructed – is too expensive and restricts their choices,” said Rob Thun, DirecTV chief content officer, in a statement. “Our new ‘No Locals’ package enables customers to take an important step forward in culling out certain types of content they may no longer care to watch and better balance the price they are willing to pay.”
And clashes between traditional pay TV distributors like DirecTV and station groups over rising fees for retransmission consent and related programming, which have increasingly led to channel blackouts, could be part of the picture. Amid contract disputes, channel blackouts have become more common – rising to the attention of both lawmakers and regulators, some of whom assert consumers aren’t getting the full services they pay for when they can’t access channels included their pay TV lineup as a result of distributor-broadcaster impasses.
DirecTV has found itself in the midst of multiple disputes with broadcasters that forced stations to go dark on the pay TV provider’s systems. That includes with Tegna, which last November had more than five dozen affiliates pulled from DirecTV via satellite, vMVPD DirecTV Stream and U-Verse after a contract expired without a new deal. Tegna and DirecTV reached a deal in January, returning 64 stations to the operator’s systems in 51 markets. That dispute followed on the heels of a separate clash with broadcaster Nexstar and was followed by a channel blackout of Cox Media Group stations, which were restored under a new deal reached just ahead of the Super Bowl.
DirecTV specifically has argued that broadcasters are seeking ever-increasing retransmission rates from traditional pay TV providers for content that is free-over-the-air content or can be found through other less expensive means, often streaming, diluting the value of the programming. In turn, as higher costs charged to distributors are passed on to customers through price hikes, providers like DirecTV contend this accelerates the cycle of more consumers leaving the traditional pay TV ecosystem, and industry which is already facing subscriber declines.
Amid the dispute with Tegna, DirecTV’s Thun previously affirmed to StreamTV Insider that the satellite provider was considering other avenues, such as distributing national network feeds to replace missing local broadcasts rather than pay increased fees, or negotiating with networks directly, potentially taking the station groups out of the equation.
"We don't need the stations to deliver the network content — we can go get it from the network," Thun said in December. "So, why don't we work on that construct? And, by the way, we've had those conversations with the networks."
Although Tegna and DirecTV reached a deal, DirecTV did appear to quietly test the aforementioned tactic. STV earlier this year confirmed that DirecTV in late December tested transmitting national network feeds of NBC programming in a handful of locations where there were Tegna-owned affiliates not available to DirecTV customers at that time.
The new "No Locals" packaging move also aligns with a presentation DirecTV released last year as Tegna pulled its local stations from the operator’s systems, where the satellite provider promoted creating an a la carte pay TV model for broadcast stations. This model, DirecTV asserted, would return choice, control and value to consumers. It also proposed direct deals between distributors and networks, rather than station owners, claiming would help stabilize prices and reduce blackouts.
The FCC took up the issue of channel blackouts and contract disputes between distributors and broadcasters earlier this year when it proposed requiring satellite and cable pay TV providers to give customers affected by channel blackouts a rebate when they don’t receive channels they pay for.
The January proposal received some pushback by industry group American Television Alliance, which suggested the regulator was putting blame and burden on the wrong party and pointed broadcasters as driving the channel blackout issue.
“In proposing to require cable and satellite companies to offer refunds when they refuse to meet broadcasters' outrageous pricing demands, the FCC seeks to punish the wrong set of parties. In doing so, it will cause higher bills for the consumers it hopes to protect,” said ATVA spokesperson Cora Mandy in a statement.
According to ATVA there were 200 channel blackouts in 2023 because of retransmission consent disputes.