Shutting Down DirecTV: Who’s Really to Blame?
Did U.S. sanctions cause the closing of Venezuela’s biggest pay-TV service? Or was it the hegemony’s fault? Perhaps it wasn’t a political decision, but a business one...
The unexpected decision of DirecTV, the largest pay-TV service in Venezuela, to immediately shutdown operations on May 19th, 2020, has brought shockwaves on our already weak communicational landscape, and the biggest impact has been on its large number of users across the country (45% of the domestic market, according to CONATEL’s numbers).
Beyond the huge role that DirecTV had in Venezuela, both technically and in terms of content, everyone, from barrios in major cities to small towns in the heartland, and even in farther corners like the paramos or the Amazonas, had the telltale DirecTV’s dishes at plain sight. It was the people’s window to news, to sports, to music, so when they say that losing DirecTV is like losing a relative, you best believe it.
Almost 13 years after the equally devastating loss of RCTV, the shutdown of DirecTV joins the large list of conquests that Hugo Chávez and Nicolás Maduro have obtained in their effort to take full control of the Venezuelan media—therefore of our public sphere and in the end, our lives. This long-game strategy is better known as the “communication hegemony,” and it was explicitly described as a goal of the revolution by El Comandante himself, back in the day.
Circumstances make the case of DirecTV different from those of RCTV, multiple radio stations and newspapers closed by direct actions of the hegemony: there are American legal sanctions against Venezuelan individuals and state companies involved with the TV channels at the center of the controversy, Globovisión (owned by Raúl Gorrín, who faces criminal charges in federal court) and PDVSA TV. Keep in mind, neither are part of the state media system.
It was the people’s window to news, to sports, to music, so when they say that losing DirecTV is like losing a relative, you best believe it.
When push came to shove, CONATEL chose to stand its ground. The hegemony’s stubbornness to keep those channels at the high cost of sacrificing the means of entertainment for many Venezuelans (including lots of its supporters) is less a matter of sovereignty (as they argue) and more about keeping control and pushing its narrative regarding sanctions.
Because right from the start, the hegemony imposed serious ways to control cable and satellite TV services in Venezuela. From the broad limitations imposed through regulations to the heavy costs that the economic crisis puts on the businesses and infrastructure. Things further escalated when channels like NTN24 and CNN en Español, were forced off the air by CONATEL’s orders. And don’t forget the blackouts.
And although DirecTV Venezuela resisted all those pressures and remained apparently strong, context is needed to understand why its parent company, AT&T, made such a harsh decision, “without any involvement or prior knowledge of the DirecTV Venezuela team.”
Five years ago, the acquisition of DirecTV by the world’s largest telecom company was finally approved. It was supposed to be a game-changer in the satellite-TV business but, as this report by Los Angeles Times from January indicates, their high expectations weren’t quite fulfilled thanks to another, very serious, game-changer: streaming media services.
AT&T joined that trend and made a massive gamble through the hefty purchase of Time Warner (now known as WarnerMedia). On May 27th, they’re releasing the result of their bet: HBOMax, a brand new streaming platform that will compete with Netflix, Amazon Prime, Apple TV+,Disney+ and many others. The conglomerate still keeps DirecTV under its arm, even if the number of subscribers has been on the decline.
In parallel, the company consolidated all its LatAm DirecTV operations under a new subsidiary (renamed as Vrio in 2018). But plans for an initial public offering were unexpectedly cancelled.
Early this year, CC reported about the pressure that the U.S. government was putting on AT&T, leaving it in a very difficult position. In the end, the company’s leadership prefered to cut off DirecTV Venezuela for good, particularly since their pole position on our market couldn’t outweigh the losses.
As the hegemony gave AT&T an easy way out, its reaction was first of mockery, followed by a show of force: the Supreme Tribunal of Justice ordered seizing DirecTV’s assets, so the state could “restart” transmissions. Of course, this action creates a whole new series of technical and legal woes.
Yet the tragic loss of DirecTV is mostly the hegemony’s responsibility, even if the U.S. sanctions played a part in its final outcome indeed. Instead of a slow agony like RCTV’s in 2007, the end came swiftly.
Only time will tell if this shock is harder to forgive.
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We’ve been able to hang on for 19 years in one of the craziest media landscapes in the world. Now, the difficulty level was raised abruptly with the global pandemic. We’ve seen different media outlets in Venezuela (and abroad) cutting personnel to avoid closing shop. This is something we’re looking to avoid at all costs, and it seems we will. But your collaboration goes a long way in helping us weather the storm.Donate