Weather Says DirecTV Could Lose 1.6M Subs in Dispute

Survey Finds 8% Would Switch Providers 1/21/2014 3:13 PM Eastern


The Weather Channel, knocked off DirecTV since Jan. 14 in a dispute over subscriber fees, has released research showing that the top DBS provider could lose more than 1.6 million subscribers who might switch distributors to get the network back.

The Weather Channel commissioned research company Ipsos, which contacted 1,000 DirecTV subscribers. When asked what they would do if The Weather Channel were no longer available on TV, 8% said they would switch providers and another 22% said they would strongly consider switching providers.

The study was conducted Jan. 12-15. All respondents were between 21 years old and 64 years old.

Other financial analysts have detailed the damage a prolonged dispute could have on Weather.

Moody’s Investors Services said the dispute with DirecTV has no immediate impact on the company’s debt ratings.  But the credit rating agency warned that a permanent loss of carriage fees from DirecTV could have” severe operational and credit ramifications” for Weather.

SNL Kagan said that if Weather agreed to lower its rate by 20% for DirecTV, it would trigger most-favored nation clauses, potentially resulting in a loss of about $40 million per year. Kagan says Weather could continue to provide the same service at the lower fee level, but its margins would suffer, dropping from 44.5% to 38.1% in 2014 and declining over time.

Read more at B&C here.


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