DirecTV Says CNN Streaming Service Risks Violating Deal
CNN’s plan to offer a streaming version of its popular lineup has hit some resistance less than a week after its debut.
DirecTV, one of the country’s biggest satellite TV providers, has warned CNN’s parent company that the programming on the new streaming channel risks violating the contract between their businesses, according to two people briefed on the exchange.
The message was conveyed in a letter DirecTV sent to executives at Warner Bros. Discovery in the past week, the people said. CNN’s new streaming channel, CNN Max, is available through Max, Warner Bros. Discovery’s most popular streaming service.
CNN Max includes many of the shows that air on CNN’s traditional cable channel, which DirecTV flagged as the concern.
A spokesman for Warner Bros. Discovery declined to comment on the letter, but said in a statement that the company “maintains strong and meaningful relationships with our affiliate partners. Our partners are aware of and understand our rationale with Max, which is to reach new audiences.”
A spokesman for DirecTV had no comment on the specifics of the letter.
It’s unclear whether DirecTV’s letter — the legal equivalent of a brushback pitch in Major League Baseball — will escalate beyond a war of words. But it is the most visible sign yet that cable and satellite providers, who pay many millions of dollars to distribute CNN, will push back when similar programming runs on a streaming service.
Like most traditional TV companies, Warner Bros. Discovery faces a dilemma of its own making. The pay-TV business — which generates lots of cash — requires Warner Bros. Discovery to grant certain valuable programs exclusively to cable providers. But the future clearly lies in streaming, a nascent business that is not yet wildly profitable.
Many media giants, such as The Walt Disney Company, have tried to get around this problem by creating new content exclusively for streaming services such as Disney+. AT&T, CNN’s previous owner, took this tack, creating a streaming service with original content called CNN+, which lost millions of dollars but did not risk running afoul of producers.
But with CNN Max, Warner Bros. Discovery has taken a different approach. The streaming channel includes marquee programs offered to traditional programmers, such as “CNN This Morning” and “Anderson Cooper 360.” The company said CNN Max was also experimenting with product features, content offerings and original storytelling.
DirecTV’s letter is an indicator that some distributors may take a more bellicose approach to Warner Bros. Discovery’s lineup. But executives at Warner Bros. Discovery believe they were well within their rights to offer CNN Max to their streaming customers.
The dust-up with DirecTV comes days before the arrival of Mark Thompson, who starts as CNN’s chief executive this month.
Rich Greenfield, an analyst at LightShed Partners, said that TV programmers will probably resolve skirmishes over distribution by offering streaming services together in the same bundle as traditional programming.
“They’re all retreating to the simplicity and cost-effectiveness of the big bundle,” he said.
