My understanding is that DirecTV pays $0.18 per subscriber for Versus now. It is also my understanding that Versus wants them to pay $0.30. Versus can call it what they want, but in my book, it is a price increase. Market price is only what the market will bear, and it appears that the satellite market (or at least half of it) will not bear this. Bottom line is what was the IRL thinking signing up with a channel owned by one of the service providers. They should have seen this coming a mile away.
Here are some samples of prices paid for other channels by DirecTV.
From an AVS forum thread:
A&E $ 0.25
Golf $ 0.26
AMC $ 0.24
TLC $ 0.23
E! $ 0.23
History Channel $0.21
National Geographic $ 0.20
SyFy $ 0.20
Speed $ 0.19
CNBC $ 0.18
Bravo $ 0.17
ESPN Classic $ 0.17
ESPN News $ 0.16
BET $ 0.15
MSNBC $ 0.15
Soap $ 0.14
Style $ 0.14
VH1 $ 0.14
Comedy Central $0.12
Fox Business Network $0.12
Hallmark Channel $ 0.12
WGN $ 0.12
BBC America $ 0.11
Game Show Network $ 0. 11
Weather Channel $ 0.11
Biography $ 0.10
TV Land $0.10
Oxygen $ 0.09
Lifetime Movie Net $ 0.09
truTV $ 0.09
CMT $ 0.08
Fuse $ 0.08
G4 $ 0.08
Animal Planet $ 0.07
Food Network $0.07
Military $ 0.07
VH1 Classic $ 0.06
Great American Country $ 0.02
Main Source: SNL Kagan Research
Bob from Illinois
09/01/09 Versus President Jamie Davis angrily dismissed DirecTV claims that talks between the two ended over pricing. "They've been out publicly talking about price increases," Davis said. "The fact is that those market increases aren't true. We're simply asking them to pay what the other providers are paying."
DirecTV said Versus was seeking a "more than 20% hike." Davis: "DirecTV wanted to take Versus away from 6 million subscribers who were receiving it for no additional cost. That was simply not acceptable for us." Versus reached 14 million DirecTV homes, but the provider wanted to drop it to a lower tier.
Davis was even more angry at DirecTV's characterization of Versus as "a paid programming and infomercial channel with occasional sporting events." Given the IRL's TV ratings, that's a pretty fair analogy.
The move drops Versus' household distribution by about 14 million homes, putting it at about 61.5 million homes. By comparison, ESPN and ESPN2 are in about 99 million homes, Golf Channel is in 81 million and Speed is in 74 million. Essentially, DirecTV is complaining that Versus wants too much money for a network, making a point to highlight the network's paid programming and hunting-and-fishing blocks, which DirecTV said sometimes makes up 10 hours of the channel's 24-hour schedule
09/01/09 This rumor is upgraded to 'fact' with today's announcement.
08/30/09 A reader writes, Dear AR1.com, Here's another one for you regarding the IRL's awful package with Versus. I have WideOpenWest as a cable provider (their "Chicagoland" market) which is bundled with my land line and internet, but WOW doesn't even carry Versus. I've only been able to watch races when they've been on ABC this year. It's also not carried in WOW's "Chicago City" market.
By the way, I had two free tickets to last night's race at Chicagoland, and I didn't even want to go because it started at 9:00 PM. I only live 30 minutes from the track. However, I thought that with cautions, an outside chance of a rain delay, and getting out of the parking lot, I wouldn't get home until maybe 1:00 AM or later. Besides, I wanted to get up early and watch the Belgian F1 GP. (OK, maybe getting out of the parking lot wouldn't have been a big deal because they certainly weren't going to fill the place, anyway.) Who was responsible for selecting that late starting time? It was even worse for you folks in the Eastern time zone. How many people want to watch a race starting at 10:00 PM EDT?
Yes, things can't get much worse. Paul J., Chicago
08/30/09 This rumor is upgraded to 'strong' today. Messages during Saturday night's IndyCar event:
Versus scrolling message: "You are about to lose Versus on DirecTV. To keep Versus, call 1-800-642-1923 or go to www.versus.com to switch to another video provider, all of which carry Versus."
Versus Advertisement, ten minutes later: "To Keep Versus on DirecTV, call 1-800-642-1923."
DirecTV scrolling message, ten minutes later: "Comcast is demanding that DirecTV drop Versus after August 31 unless DirecTV agrees to Comcast's unreasonable demands. Go to DirecTV.com/Versus for more information."
Never seen anything like it. Amateurish. If IndyCar loses exposure on DirecTV, they had better have an out from the 10-year deal (death sentence) they signed with Versus. Just when we thought ratings could not go lower…..ESPN reports that the IRL's Terry Angstadt said he is "very" confident that the Versus network, which televises IndyCar races, will resolve a standoff with satellite television provider DirecTV.
08/22/09 A reader writes, Dear AR1.com, I was watching qualifying for Sonoma on Direct TV and they are running a tag at the bottom of the screen that says Versus has not reached an agreement with Direct TV and this channel might not be available after August 31st, 2009. I don’t know how big the Direct TV audience is but I would imagine pretty large. If the IRL blows this one and doesn’t have a contingency for this type of thing, my already low level of respect for the IRL will be even worse. Bruce Guthrie, Charlotte, NC
Dear Bruce, Let's not forget that Versus is owned by Comcast and DirecTV is a competitor of Comcast, so don't think for one minute either side is going to help each other. If Versus loses DirecTV it will cement our position that the Versus deal will ultimately be the IRL's undoing. And to top it off they signed a 10-year deal. That's 10 years of abysmal TV ratings. Even thought they do a good job, Versus will never be a go-to channel for TV viewers because there are now 100s of TV channels available to watch, so the viewer base is fractured more than it ever was. The best thing that could happen to the IRL at this point is for the Hulman George family sell it to NASCAR where it can be rolled into their excellent TV package. Put a NASCAR Sprint Cup driver like Gordon, Stewart or Busch in some races and watch the TV ratings shoot up, which would help the league and the teams land new sponsors. The only thing the family has to make sure of is that the contract ensures that the France family not kill off Indy Car Racing after buying it, and that the Indy 500 always be run with open wheel IndyCars. Mark C.
Another reader writes, Dear AR1.com, Is there any way that the IndyCar Series can break their contract with Versus? I just had my Versus channel shut off from the Dish Network (another competitor of Comcast) because the rates on my Satellite dish for the non-standard package channels was way too expensive, plus this is starting to be a disaster move to Versus, they need to have their races on NBC and CBS. Alistair Fannell
08/21/09 It is possible DirecTV may drop the Versus channel, which will lower the IRL's TV ratings from miniscule to essentially non-existent. Here is what DirecTV has to say about the situation:
You may have seen a message on your TV screen saying that you may no longer receive the Versus channel after August 31, 2009. DIRECTV is in contract negotiations with Versus and we're making every effort to keep the channel on the air without interruption.
For more information, please read our FAQs below.
On-Screen message says I may lose Versus. Why?
We're in contract negotiations with Versus. The contract doesn't expire until August 31, 2009, so you'll continue to receive the channel from DIRECTV until then.
What happens if you can't reach an agreement?
We hope to reach an agreement prior to the expiration of the contract, but if we don't Versus may be removed from DIRECTV.
If Versus is taken down for any period of time, how will DIRECTV make up for the loss?
We're working hard to keep Versus on the air, but if Versus comes down, we will communicate with you and do what we can to ensure your continued satisfaction and loyalty until the matter is resolved. We will continue to negotiate with Versus to resolve this matter. In the meantime, you'll still be able to watch college football on Big Ten Network, The Mtn., ESPN, ESPNU, ESPN GamePlan, local channels and your RSN. NHL games are available on NHL Network, NHL Center Ice, and your RSN. MMA is available on HDNet and Spike TV, IRL on ABC, and Professional Bull Riding on ESPN2.
What's keeping you from reaching an agreement?
Versus is asking for terms which do not reflect the market and which they are not asking of all other distributors. DIRECTV wants to keep your monthly fees low, so it's doing everything it can to avoid paying exorbitant programming fees.
Should I switch to DISH or cable?
No. There's no need to consider switching providers. We're working to continue negotiations and provide uninterrupted service for our customers. DIRECTV has the best variety of exclusive and premium content available anywhere and we have similar programming on other channels (see above).
Is this all just so DIRECTV can save money?
Not at all, this is about DIRECTV getting treated fairly and not wanting to pass on high programming fees to our customers.