Discovery says it is paid less now than in 2006 despite spending more on shows for the Sky platform. The broadcaster claims Sky is limiting choice – and plans to tell consumers what’s happening through an on-air promotional campaign beginning 8pm Wednesday.
Sky says the demands of Discovery, which includes the ascendant Eurosport network, was unrealistic.
All 12 channels in the Discovery portfolio including Eurosport, Animal Planet, TLC and Discovery itself could be switched off if no agreement is reached by January 31. The dispute also extends to the low cost Now TV.
Sources familiar with the situation told Broadband TV News that while the UK door is all but shut, there is still room for negotiation in Germany. The Italian market is covered by a separate agreement.
“We are proud to be an independent network of channels that works hard to bring real-world first class channels and programmes to viewers in the UK for nearly 30 years, offering quality and variety to pay television,” said Susanna Dinnage, Managing Director, Discovery Networks UK and Ireland. “We believe Sky is using what we consider to be its dominant market position to further its own commercial interest over those of viewers and independent broadcasters. The vitality of independent broadcasters like Discovery and plurality in TV is under threat.”
Discovery has acquired the exclusive rights to the Olympics from 2018, valued at €1.3 billion, across all platforms, including FTA TV, subscription/pay-TV, internet and mobile phones, in all languages across 50 countries and territories in Europe except Russia. But the coverage will be shared with other broadcasters, such as the BBC, ensuring viewers will not be deprived of Olympic action.
Some 50% of viewing to factual programming on Sky is to a Discovery-branded channel.
But a spokesperson for Sky questioned the viewing trends: “Despite our best efforts to reach a sensible agreement, we, like many other platforms and broadcasters across Europe, have found the price expectations for the Discovery portfolio to be completely unrealistic. Discovery’s portfolio of channels includes many which are linear-only where viewing is falling.
Sky has a strong track record of understanding the value of the content we acquire on behalf of our customers, and as a result we’ve taken the decision not to renew this contract on the terms offered. We have been overpaying Discovery for years and are not going to anymore. We will now move to redeploy the same amount of money into content we know our customers value.”
Discovery claims its stance is on behalf of the consumer, though it will surely be the one who misses the 10 million Sky homes. Distribution from Virgin Media and BT TV remains unaffected.
“Somebody has to stand up for consumers, because consumers believe they are paying for choice and diversity – they deserve better. Discovery is prepared to take that stand. Pay television needs to be about more than just films and football. The consumer can’t be expected to fund all of Sky’s investments and get less and less choice in return. We are also concerned that with the recently announced Fox transaction, Sky’s market strength and incentive to disadvantage independent TV content providers will only increase,” continued Dinnage.
It is not the first time that Discovery has gone public with its negotiations, though this time the amounts under discussion have not been revealed.
Last year the boss of Discovery-owned TV Norge has said the channel was simply seeking the cost of a cup of coffee after its channel was removed from Canal Digital in a dispute over carriage fees.
In a similar argument Harald Strømme claimed that over the last five years Canal Digital had increased its prices by 30%. “Despite the fact that we have grown rapidly in recent years and invested heavily in Norwegian entertainment, our share of this has become less and less.”
The dispute was resolved within a fortnight.