
In Rio, the Olympic torch will light up Brazil’s Maracana stadium Friday night, kicking off the 2016 Summer Olympics. But in Boston, DirecTV subscribers tuning in will see a blank screen unless the television provider and the region’s NBC station come to a last-minute compromise.
As one of the biggest ratings draws of the year, the Olympics could increase pressure on both companies to finally settle on a new broadcasting contract, analysts said, as both stand to lose from an extended blackout.
Sunbeam Television Corp., the parent company of WHDH-TV Channel 7, the NBC station that would carry major Olympic coverage, would forfeit the premiums DirecTV pays per customer. And a large number of DirecTV customers could be vexed enough to switch to cable.
“There are problems for everybody,’’ said Jeff Kagan, a telecommunications analyst. “Viewers lose the ability to watch the TV channel. The problem for the carrier is that they lose the ability to keep the customer happy. And the problem to the channel is that they have fewer customers, so they aren’t able to charge as much.’’
DirecTV customers can still tune in to WHDH — as well as WLVI-TV Channel 56, another blacked-out Sunbeam channel — by switching from their satellite feed and viewing the stations over the airwaves, probably with the help of an antenna. They can also access some Olympics coverage on NBC’s secondary channels, as well as online or through apps.
Boston DirecTV viewers haven’t been able to watch WHDH via satellite since mid-July, when Sunbeam was unable to reach a contract with the satellite broadcaster.
Sunbeam has been “demanding a significant increase in their current fees just to allow the same families to keep watching shows that remain available for free over-the-air,’’ said Kate MacKinnon, a spokesperson for DirecTV parent, AT&T Inc, in a statement.
Paul Magnes, general manager of WHDH, said in a statement that the channel is “merely seeking fair and reasonable market value for the transmission of our signals’’ and is “working to settle this matter.’’
The dispute with DirecTV follows the decision by NBC owner Comcast Corp. to switch its local affiliate from WHDH to another channel in the Boston area. Without top NBC shows like “America’s Got Talent’’ and “NBC Nightly News,’’ WHDH will be worth far less come Jan. 1, according to Daniel Lyons, a professor at Boston College Law School who studies telecommunications.
So it’s to Sunbeam owner Ed Ansin’s advantage to negotiate a long-term deal now while WHDH still carries NBC shows and is worth more, Lyons said.
“If I’m DirecTV, I want to wait until Jan. 1 to lock in, and if I’m Ed Ansin, I want to lock that deal in now,’’ he said.
The audience decline from the DirecTV blackout is not likely to be large enough to reduce WHDH’s ad revenues, Bruce Mittman, chief executive of Mittcom, a Needham-based ad agency. The vast majority of WHDH’s viewers come via other providers, such as Comcast. DirecTV has just 3.8 percent of the Boston TV market, or 92,424 households, according to Mittcom.
For the time being, WHDH is losing fees it receives from DirecTV. But Mittman believes the Olympics gives Ansin leverage to negotiate a better deal because the two-week sporting event is simply too important for DirectTV to not have it available to customers.
“That’s what WHDH is betting on,’’ Mittman said. “They’re saying, ‘I’m going to have a windfall anyway with the Olympics. This is probably a better time to negotiate hard with DirecTV because they have more to lose than I do.’’’
Added Lyons: “When a DirecTV customer goes to turn on the TV, and the Olympics aren’t there, he’s going to blame DirecTV. He’s not going to blame WHDH.’’
Jason Blake, a DirecTV subscriber in Wakefield, said the biggest drawback of an Olympic blackout would be losing the ability to DVR events. Buying an antenna, Blake added, is “more of an annoyance than anything.’’
“If you really care about your customers, and you want to get it done, figure out a way to get the channel live again for a couple weeks,’’ Blake said.
Sunbeam previously had a dispute over carriage fees with DirecTV in 2012, which caused a two-week blackout that was only resolved shortly before the Super Bowl.
Kagan said channel blackouts tend to be a last resort to speed up negotiations, especially with the Olympics looming.
“If it’s not going to happen before the Olympics, then it could drag on,’’ Kagan said. “But it never drags on. None of the companies want a customer to get picked off. None of the networks want to lose out on money. This is just a way of accelerating the process.’’
Michael Bodley can be reached at michael.bodley@globe.com. Follow him on Twitter @michael_bodley.