DirecTV over the weekend made its latest outreach to customers about a carriage dispute with conservative news channel Newsmax, which it claims demanded unreasonable fees. The pay TV provider said it’s still interested in getting the programming back after it was dropped across the DirecTV, U-Verse and DirecTV Stream video systems when a contract expired on January 24, while also emphasizing the decision was not political.
On its programming-focused website TVPromise.com, DirecTV worked to explain its view of the situation to consumers. The TV distributor noted it regularly negotiates with content providers to reach a fair price and also works to protect customers “from unfair cost inflation.” DirecTV asserts Newsmax had demanded “tens of millions of dollars” in licensing fees, a move to impose costs on distributors to help fund a shift away from its free streaming model.
“Our differences with Newsmax are economic, not political or ideological. Newsmax made unreasonable demands that would force DIRECTV customers to fund the network’s shift from a free nationwide streaming service to one that will require a pay TV subscription,” DirecTV stated. “Since we would not agree to Newsmax’s demand to pay them tens of millions of dollars in licensing fees, DIRECTV was no longer permitted by Newsmax to air its content.”
Under terms of an earlier agreement, DirecTV, which has offered Newsmax since 2014, carried the channel at no cost to programmer or customers. As part of the deal, DirecTV gave up its typical right to sell two minutes per hour of Newsmax ad time, which it claims enabled Newsmax to generate more revenue with its ad-supported model – while also still agreeing it could be distributed on streaming platforms for no charge, even to those without a pay TV subscription. However, months of negotiations hit an impasse as Newsmax sought fees that DirecTV did not want to pay.
“DIRECTV is disappointed by Newsmax’s position. We prefer Newsmax had never left and remain interested in bringing Newsmax back under the right financial terms,” DirecTV continued in the Sunday message to viewers.
However, in a statement shared with Fierce Video, Newsmax rebuffed DirecTV’s claims, saying that it is not asking for “tens of millions of dollars” during the term.
“Newsmax is seeking a very modest fee of about $1 a cable subscriber [per year] when we believe our market rate is $5, and it’s a key reason why hundreds of cable operators renewed with us last year,” Newsmax stated.
“DirecTV is insisting that unlike all other cable news channels it pays fees, Newsmax, the 4th highest-rated cable news channel (Nielsen) is not eligible for any license fees,” Newsmax continued. “This is blatant political discrimination because DirecTV pays dozens of liberal- leaning networks fees, higher than what we are asking and they typically have much lower ratings than Newsmax.”
DirecTV dropped the conservative news channel across its satellite TV, U-Verse and DirecTV Stream systems in late January after the companies were unable to reach new terms. And what looked to be a carriage dispute became political as Republican lawmakers weighed in ahead of time, with more than 40 members of the U.S. House Republican Conference signing a letter that accused DirecTV of actively working to stifle conservative points of view on its system. The letter also pointed to DirecTV’s move last year to drop conservative network One America News Network after a contract expired, which separately a judge recently ruled was within the pay TV provider’s right.
DirecTV has continued to stress that dropping Newsmax has nothing to do with attempts to block out conservative viewpoints, but rather it’s a business decision as the company deals with a shrinking pay TV industry alongside increased costs for programming. As the price for content climbs, the operator then passes those costs onto consumers through price hikes. To save on operational costs as it deals with industry challenges, DirecTV recently slashed roughly 10% of its management workforce.
And in making the argument in its response to elected officials for not agreeing to Newsmax’s desired terms, DirecTV previously pointed to the relative low popularity of the network – citing Nielsen data that Newsmax’s nationwide average household audience is just 101,000, or 0.1% of total TV households – and 92% lower than that of leading conservative cable news network Fox News.
As the saga with Newsmax continues to play out, the satellite TV company also made a new addition to its lineup – likely in an effort to further show it's committed to a range of viewpoints – in bringing The First channel across its three video services. The First is a conservative opinion and commentary channel that was previously a streaming-only channel, with DirecTV the first MVPD to carry it. It features conservative voices including hosts Bill O’Reilly, Dana Loesch, Liz Wheeler and Jesse Kelly, while offering live news, original shows and documentaries.
Updated with comment from Newsmax. Additional update to reflect Newsmax is seeking around $1 per subscriber per year.