Stalled Lifetime-EchoStar Talks Seen Resuming
EchoStar and Lifetime, at a carriage impasse, may return to the bargaining table because the DBS firm needs the popular women’s network, said 3 analysts we spoke with. But another analyst said Lifetime stands to the battle between the firms. After talks collapsed, the DBS provider said it would replace Lifetime with another channel by Jan. 31. Lifetime said Sun. that Dish Network had made a “’take it or leave it offer'” that was “unfair and unreasonable.” Yet the network left the door open. “We're always open to entertaining an offer from Dish that is fair,” said a Lifetime spokesman, declining to elaborate.
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The companies have been clashing over programming costs. EchoStar said Lifetime wanted a 76% hike, which the programmer denied (CD Jan 5 p3). Earlier, EchoStar yanked sister channel Lifetime Movie Network, substituting Oxygen Media, also aimed at women (CD Jan 18 p 15). In another spat, EchoStar Chmn. Charles Ergen last year dropped Comcast’s OLN sports network (CD Oct 24 p12). Ergen may rue ditching Lifetime, since it means DirecTV gains customers, said analysts including Jefferies & Co.’s Robert Routh. Lifetime stands to lose revenue in the fight, noted Carmel Group CEO Jimmy Schaeffler.
Dish Network may gain subscribers on strong demand for Oxygen, a spokesman said: “It has been one of the most requested channels by our viewers in the last several years.” The No. 2 U.S. DBS firm said it won’t say how many customers defected from Dish until its next earnings conference call, which hasn’t been scheduled. It’s too soon to know whether Lifetime loyalists migrated to DirecTV, said a spokesman.
“It was galactically stupid for EchoStar to drop it,” said Routh. DirecTV will be among the main beneficiaries as Lifetime fans switch to pay TV providers offering the channel, he said. A cable consultant agreed. Subscribers who switch from EchoStar’s Dish Network to keep Lifetime likely will move to DirecTV so they still get the channel by satellite, said Steve Effros, who does work for NCTA. “It is almost axiomatic to say that a deal will be cut and the programming will be returned,” he said: “If it remains popular programming, and Lifetime is popular programming, it is likely to be back.”
Lifetime owners Disney and Hearst pledged to help the channel’s “Switch from Dish” campaign. They “endorsed this decision and will apply their resources to help ensure that Lifetime and Lifetime Movie Network are available,” said the network. In a salvo aimed at EchoStar, Lifetime Entertainment Pres. Betty Cohen said, “Dish sought to drastically cut the rates they pay,” according to the statement. The prices are “highly competitive,” she added. Cohen wouldn’t comment.
EchoStar stands to lose Lifetime subscribers to competitors besides DirecTV, Schaeffler said: “Charlie Ergen is looking at the war here, and he’s positioning to win the war.” Lifetime is “losing an awful lot of bottom line as well,” he said. Lifetime’s departure from Dish leaves a vacuum in women’s programming that could open space for some new rival, Schaeffler said: “All of a sudden that entity has 12-plus million subscribers, and all of a sudden Lifetime has a new competitor. They should be careful what they ask for.” The imbroglio also could taint Lifetime’s appeal to telecom firms offering video, said Schaeffler.
Like many programming brouhahas between cable operators and programmers, this too will end because EchoStar stands to lose customers to DirecTV, said 3 analysts. Lifetime is the number 16 TV network, Nielsen reported. “This is a network that has a very loyal base of viewers, and they are going to get upset,” said Routh: “When people get upset about things like that, they switch.” The ranks of those cutting off service may not “be a wildly significant number,” said Janco analyst Matthew Harrigan. “Charlie [Ergen] is willing to use someone as a sacrifice to show that he’s pretty serious about” recent hikes in programming prices, Harrigan said: “This is the biggest kid he could afford to pick a fight with.”