Viacom, DirecTV blame game escalates

At midnight on July 10th, DirecTV withdrew all of Viacom’s music, kids and comedy channels from its system. DirecTV is refusing to pay increased carriage fees for the likes of MTV, VH-1. Nickelodeon and Comedy Central. DirecTV, in a statement, says Viacom wants 30 per cent more, worth more than $1 billion a year.

Viacom’s version of the contract negotiations discussions says they are asking only for “a couple of pennies” more per subscriber. Both sides yesterday blamed the other, and the argument spiralled with Viacom pulling its channel’s best programme from its web-sites. This action affected highly-popular shows such as Jon Stewart’s The Daily Show.

Negotiations broke down at 11am on Tuesday, although reportedly secret talks did take place on Wednesday.

Industry expert SNL Kagan suggests that Viacom gets about 50 cents per subscriber/month for Nickelodeon, to about 16 cents per month for Comedy Central.

Investment bankers Nomura, in a note to clients, said they expected the black-out to last anything between one and four weeks, although also stated that Viacom would eventually receive more cash from DirecTV. “I think it’s going to take a while,” said Nomura analyst Michael Nathanson. “It shouldn’t have gotten to this level and it did.”

Viacom’s statement said: “We proposed a fair deal that amounted to an increase of only a couple pennies per day, per subscriber, and we remained willing to negotiate that deal right up to this evening’s deadline. However, DirecTV refused to engage in meaningful conversation. We are hopeful that DirecTV will work with us toward a resolution and stop denying its subscribers access to the networks they watch most.”

 

 

 

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