May 24, 2010 / 2:20 PM / 9 years ago

UPDATE 2-Dish Network, Weather Channel end contract dispute

* Dish Network to continiue to carry Weather Channel

* Weather Channel to provide localized programming

* Dish shares up 0.4 percent at $21.11

(Added analyst comment, context, share price)

By Jennifer Saba

NEW YORK, May 24 (Reuters) - Dish Network Corp (DISH.O) will continue to carry the Weather Channel, ending disagreements over carriage fees and programming that threatened to bump the network from the satellite TV carrier’s roster of channels.

Weather Channel sought higher monthly carrier fees, while Dish Network threatened to drop the Weather Channel because it would not provide local weather broadcasts.

Under a new agreement, Dish Network will carry two networks of the Weather Channel, including a customized local weather channel that the satellite service wanted.

Additional terms of the agreement, including Weather Channel carrier fees, were not disclosed.

The impasse between the Dish Network and Weather Channel is the latest disagreement to occur between a content provider and a distributor.

“It’s telling what is going on in the industry right now,” said Hudson Square Research analyst Todd Rethemeier about the flurry of disputes.

In several instances earlier this year contract negotiations between cable companies and content providers broke down. Carrier Cablevision Systems CVC.N tangled with programmers Scripps Networks Interactive SNI.N and Walt Disney Co’s (DIS.N) ABC over payment for each subscriber. Time Warner Cable TWC.N and News Corp <NWSA.O had a similar disagreement over subscriber fees.

Rethemeier cites the rising cost of producing content and the inability of distributors to pass along price increase to consumers. “They are finding it is not that easy anymore,” he said.

Last week, Dish Network said it planned to drop the Weather Channel after the two parties could not reach an agreement on a new contract.

Dish Network said it wanted more localized weather content as the Weather Channel sought higher fees per customer. While the Dish Network never pulled the Weather Channel, it did introduce a 24-hour weather channel, The Weather Cast.

The Weather Channel’s new localized service for Dish will replace Weather Cast.

The partnership also includes personalized weather reports from the Weather Channel through the Android mobile platform to be launched this summer.

The Weather Channel gets about one-sixth of its U.S. viewers through the Dish Network. On average the Weather Channel is paid 11 cents a month per subscriber, according to SNL Kagan data.

The Weather Channel is jointly owned by NBC Universal and private equity firms Blackstone Group (BX.N) LP and Bain Capital.

Shares of Dish Network are trading up 0.38 percent at $21.11. (Reporting by Jennifer Saba; Editing by Derek Caney and Steve Orlofsky)

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