Univision’s Demands for Astronomical Rate Increases Drove Blackout for Verizon’s Fios TV Customers 

 

Washington, D.C. – The American Television Alliance (ATVA), a voice for the TV viewer, today blamed Univision’s demands for astronomical new rate increases as the real cause behind the blackout of Verizon Fios TV customers. Based on news reports, Univision’s conduct follows a familiar pattern intended to extract more money from American consumers. When Univision demanded exorbitant new fees for its same programming, which threatens to raise video costs for all Verizon customers, Verizon said no. Univision’s demands for huge rate hikes are particularly outrageous because their viewership is declining significantly – even among their traditional customer base. According to one published report, Univision has lost more than 45% of its prime time audience since 2013.1

Unwilling to compromise on price and give consumers a fair deal, Univision is now running to the FCC and the media to blame Verizon. These actions are just more examples of Univision’s well-worn and aggressive tactics to gain leverage in content negotiations. Earlier this year, Univision followed a similar playbook with Charter Communications, leaving millions of consumers without access to their programming. Univision also went dark with ATT U-Verse customers in 2016.

“Univision’s hardball negotiating tactics are a naked ploy to extract higher fees from consumers,” said Trent Duffy, ATVA spokesman. According to recent media reports, Univision seeks an increase of more than double what they charge for access to their channels today. Univision is following a well-established pattern of trying to pressure pay-TV providers, like Verizon, into offensive rate increases that could result in dramatically higher costs for all Verizon customers, whether they watch Univision or not. “By demanding unrealistic rate increases, Univision has placed profits over people,” said Duffy.

“Contrary to what Univision would like the public to believe, cable, satellite and telco providers cannot simply ‘drop’ a local station,” Duffy added. “Instead, once a contract expires and no extension is agreed upon, video providers like Verizon don’t have the legal right under copyright laws to continue transmitting a content provider’s signal.” Duffy noted that “As a pay-TV provider in a competitive market where consumers are cutting the cord every day, Verizon has two choices: negotiate a fair and reasonable rate for content or risk losing customers who might reject the corresponding new price increases in their cable bills.” 2

Retransmission consent fees – what pay-TV operators pay broadcasters for the right to retransmit their free, over-the-air signal – are the fastest rising part of consumers’ bills. Since 2010, retrans fees have grown an astonishing 6,483% [no, that’s not a typo], and are expected to continue to soar to $12.8 billion by 2023, according to research firm SNL Kagan. In these disputes, people often lose sight of the fact that ultimately, it’s the consumer that bears the costs of the excessive fee increases (in the form of higher cable bills) when many content providers like Univision make unreasonable rate demands.

Univision’s demands for huge fee increases come at a time of tectonic changes in consumer behavior that are making its programming less valuable. Time spent watching traditional TV is in decline, as consumers spend more of their time watching online video and engaging with mobile devices. According to Nielsen, in the United States, Latinos spend more time on mobile devices than any other demographic group. Univision’s ratings declines are greatest among younger adults.

Univision is trying to shift its money problems onto distributors like Verizon and their customers. Univision is reportedly $9B in debt, run by private equity funds ruthless about turning a profit and struggling to raise an IPO.

“What makes Univision’s demands even more outrageous is that they come at a time when middle class American families are already struggling to manage their stretched household budgets and questioning the affordability of cable service. And here we have Univision demanding outlandish rate increases that will lead to less money in consumers’ pockets,” said Duffy. “The bottom line is Verizon’s video customers shouldn’t have to endure new price hikes just because Univision wants to increase its profits.”

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The American Television Alliance (ATVA) brings together an unprecedented coalition of consumer groups, cable, satellite, telephone companies, and independent programmers to raise awareness about the risk TV viewers face as broadcasters increasingly threaten service disruptions that would deny viewers access to the programs they and their families enjoy. 

For more information about ATVA, visit our website. Follow us on Twitter @ATVAlliance.