海角大神

海角大神 / Text

DirecTV loses MTV, Nickelodeon, and Viacom's free online shows

DirecTV says goodbye to Dora the Explorer, Snookie, and Jon Stewart. Negotiations with Viacom broke down as DirecTV was unable to reach a new fee arrangement. 

By Joe Flint , Los Angeles Times
LOS ANGELES

As Mike Sorrentino, of MTV鈥檚 鈥淛ersey Shore,鈥 would put it,聽DirecTV聽and Viacom have a situation here.

DirecTV聽dropped more than a dozen cable networks owned by Viacom including MTV, Nickelodeon, BET and Comedy Central on Tuesday night after the satellite distributor was unable to reach a new fee arrangement with the media giant to continue carrying its channels. Although the two sides are continuing to negotiate, analysts said the dispute could drag on for weeks.

鈥淚 think it鈥檚 going to take a while,鈥 said Nomura analyst Michael Nathanson. 鈥淚t shouldn鈥檛 have gotten to this level, and it did.鈥

That means almost 20 million聽DirecTV聽subscribers around the country may have to get used to life without 鈥淒ora the Explorer,鈥 鈥淪nookie and Jwoww,鈥 鈥淭he Daily Show鈥 and other popular programs from Viacom鈥檚 networks.

At issue are price increases Viacom wants to extract from聽DirecTV聽to keep carrying its cable channels.

鈥淰iacom is pushing聽DirecTV聽customers to pay more than a 30 percent increase, which equates to an extra $1 billion,鈥 Derek Chang,聽DirecTV鈥檚聽executive vice president of content, strategy and development, said in a statement. Chang argued that the increases are out of line, given declining ratings for many of Viacom鈥檚 channels over the last year, including childrens network Nickelodeon.

Chang said the company was willing to keep the popular channels on its systems while talks continued but couldn鈥檛 get permission from Viacom.

鈥淟et鈥檚 be clear: Viacom took these channels from聽DirecTV聽viewers,鈥 Chang said.

Viacom countered that the increase it seeks is 鈥渁 fair deal that amounted to an increase of only a couple pennies per day per subscriber.鈥

Neither side would specify the costs of carrying each channel. But according to industry consulting firm SNL Kagan, the price tag for Viacom鈥檚 channels ranges from about 50 cents per subscriber per month for Nickelodeon to 16 cents per month per subscriber for Comedy Central. The most expensive cable channels are ESPN, which costs more than $5 per subscriber per month, and TNT, which runs about $1 per subscriber per month.

Nomura鈥檚 Nathanson said he believes聽DirecTV鈥檚聽previous deal was 鈥渧ery favorable鈥 and Viacom is trying to get rates closer to what other big distributors are paying.

Price is not the only issue for聽DirecTV. The satellite broadcaster is also unhappy with how much content Viacom puts online for free. Pay TV distributors such as聽DirecTV聽are pressuring programmers to avoid putting a lot of content online for free out of fear that consumers could eventually decide to cut the cord to their pay TV service.

鈥淭his will be a big source of push-back from the distributors,鈥 said Sanford C. Bernstein analyst Todd Juenger, who added that he finds it 鈥渂affling鈥 how much content Viacom gives away free online.

On Wednesday, Viacom stopped free online offerings of some of its shows, including Comedy Central鈥檚 鈥淭he Daily Show鈥 and 鈥淭he Colbert Report.鈥

Carole Robinson, a Viacom spokeswoman, said the company had 鈥渢emporarily slimmed down our offerings asDirecTV聽markets them as an alternative to having our networks.鈥

Although feuds between programmers and distributors are common, it is rare for channels to get pulled. Once that happens, there is a tendency for both sides to dig in their heels.

Viacom and聽DirecTV聽each have potential headaches the longer the dispute goes on. Viacom could see its ratings take a hit from the loss of聽DirecTV, while the satellite company has to worry about its subscribers looking for other options to get their favorite channels.