With its retransmission consent battle with Dish Network in its second month and in light of comments by the satellite company’s chairman Charlie Ergen that its blackout of the channel is “probably permanent,” Univision CEO Vincent Sadusky said the broadcaster is ready to use the full power of its networks to encourage viewers to switch providers.
In Univision’s own conference call with analysts on Thursday, newly minted CEO Sadusky said that he was taking Ergen’s comments at “face value.”
“It feels like they are pretty well dug-in,” Sadusky said of Dish. “We take their comments at face value. So far, we haven’t really promoted and utilized the full strength of all of our networks to convert their subscribers to other providers. But we are fully prepared to do that.”
Sadusky wouldn’t say how Univision would go about that. But the programmer owns more than 62 television stations across the country and has cable networks like, Galavision, El Rey Network, Univision Deportes and others. Univision also has a direct-to-consumer offering priced at $7.99 per month.
That DTC offering was a bone of contention with Dish – Ergen mentioned on his call that Univision was charging the satellite company more than the price of the DTC product. Dish had also argued that Univision has been declining in the ratings, while the broadcaster claimed it is the third most watched network by Dish customers.
Dish has about 13 million customers across the country and offers Univision’s cable networks as part of its ethnic packages. Just what impact the blackout has had directly on the company is unclear, but revenue dropped 2% to $749.8 million and ad sales dipped 7.3% to $434 million in Q2.
At Univision’s Media Networks group, which excludes its radio stations, operating income was down 8.7% to $306 million and revenue fell 1.9% to $685.1 million. Advertising revenue was down 7.9% to $372 million.
Sadusky estimated that Univision networks account for “well over” 1 million Dish Latino customers, and even more to non-Latino Dish packages. He added that Univision has received “north of 100,000 phone calls” from customers concerning the blackout.
Sadusky added that Univision has seen a significant uptick in the number of customers to its DTC offering, UnivisionNow, adding that many of them may be signing up on a temporary basis hoping the retrans fight will work itself out.
Sadusky said that despite Dish's claims that Univision is asking for an outrageous rate increase, the deal between the two is old and needs to reflect the current impact of the channels.
"Up to now, we've really tried to work with Dish and have them simply recognize that our deal is old and we're not asking them to do anything outrageous in terms of being an outlier with our per sub fee based upon the audience we deliver," Sadusky said.
“Going forward we are ready to change our messaging and let our people know, as Dish has said, this could be long term, this could be permanent, So it benefits us to move those subscribers over as quickly as possible to alternative services, either to our OTT service or other services in the marketplace,” Sadusky continued. “The general consensus among consumers, any research survey I've seen, usually when they list out from favorite to least favorite monthly vendors, typically it is the pay TV providers that are really challenged. I think when we change our messaging, we will move people over as quickly as possible so that we can minimize the negative impact of subscriber fee loss from Dish directly and to a lesser extent advertising dollars.”