DirecTV Close to Deal with Weather Channel--Update

By Suzanne Vranica and Shalini Ramachandran 

DirecTV is close to an agreement to restore the Weather Channel to its program lineup, say people familiar with the matter, after a months-long dispute between the two companies over program fees.

As part of the deal, DirecTV is expected to agree to a small increase in the fees it pays to Weather Channel, although the increase will be less than the penny a subscriber a month the channel wanted, one of the people said. Weather Channel now receives about 13 cents per subscriber a month, estimates research firm SNL Kagan.

Still, any increase would be a retreat for the satellite operator, the second-biggest pay-TV firm, which serves about 20 million subscribers. DirecTV had wanted to severely reduce the fees it pays Weather Channel, the Journal has previously reported, arguing that consumers were growing more reliant on the Web and mobile devices for weather information.

The dispute highlighted how changing consumer media habits are affecting the value of pay-television channels. The Weather Channel was taken off DirecTV service in mid-January.

As part of the agreement, Weather Channel has agreed to increase the airtime it gives to weather-related news, two of the people said.

Weather Channel is a unit of Atlanta-based Weather Co., which is owned by a consortium that includes Comcast Corp's NBCUniversal as well as private-equity firms Blackstone Group L.P. and Bain Capital LLC.

The TV channel has revamped its programming over the past few years to rely less on weather forecasts, adding reality-TV programs among other changes. It also hired high-profile talent, including Sam Champion, the long-time "Good Morning America" anchor.

DirecTV had been critical of the reduced reliance on weather, noting that 40% of the Weather Channel's content is now reality programming.

Write to Suzanne Vranica at [e-mail] and Shalini Ramachandran at [e-mail]

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