DirecTV Customers Lose Stewart and Colbert

Those of us who subscribe to DirecTV have lost Comedy Central and 16 other Viacom channels.

Those of us who subscribe to DirecTV have lost Comedy Central and 16 other Viacom channels.

USA Today (“20M DirecTV subscribers lose 17 Viacom channels in dispute“):

DirecTV’s 20 million satellite TV subscribers have lost 17 channels produced by Viacom in a dispute about the fees paid to broadcast the media company’s programs.

Late Tuesday night, the satellite service removed BET, Comedy Central, MTV, Nickelodeon, Spike and VH1 because contract talks with Viacom had reached an impasse.

Viacom sent DirecTV a letter on Tuesday ordering the pay-TV provider to “remove the channels by midnight or face legal action,” said Derek Chang, DirecTV’s executive vice president of content, strategy and development in a statement sent out late Tuesday.

The satellite provider hoped to continue transmitting the channels as the two sides continued their negotiations, he said. DirecTV said Viacom is seeking a 30% increase in fees, which would amount to an additional $1 billion. Chang noted that “ratings for many of (Viacom’s) main networks have plummeted, and much of Viacom’s programming can be seen for free online.”

Viacom countered, saying that DirecTV has been paying “the same bargain rate” for its programming for seven years. Viacom is the top programmer on the service and Nickelodeon is the most watched individual channel on DirecTV, Viacom says, with 20% of viewers watching a Viacom channel at any given time.

The media company wants an increase that amounts to “a couple pennies per day, per subscriber,” wrote Mark Jafar, Viacom’s vice president for corporate communications on the company’s official blog (blog.viacom.com).

These disputes are rather common and quite annoying. It took years for most cable customers to get access to the NFL Network, for example. At the end of the day, the programmers almost always win: It’s the programming that people are paying for, not the mode of delivery.

FILED UNDER: Economics and Business, Quick Takes
James Joyner
About James Joyner
James Joyner is a Security Studies professor at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. al-Ameda says:

    Late Tuesday night, the satellite service removed BET, Comedy Central, MTV, Nickelodeon, Spike and VH1 because contract talks with Viacom had reached an impasse.

    Viacom sent DirecTV a letter on Tuesday ordering the pay-TV provider to “remove the channels by midnight or face legal action,” said Derek Chang, DirecTV’s executive vice president of content, strategy and development in a statement sent out late Tuesday.

    The media company wants an increase that amounts to “a couple pennies per day, per subscriber,” wrote Mark Jafar, Viacom’s vice president for corporate communications on the company’s official blog (blog.viacom.com).

    That gives you an idea of how much money must be involved – a lot, a huge amount.

    Modern media ownership is a license to print money.

  2. Just Me says:

    This generally means those pennies per subscriber per day will get passed on down to the subscriber as soon as contract allows.

    We don’t use Direct TV, but I figure Viacom will probably hold my cable company’s feet to the fire the next time the contract comes up for re-negotiation.

    Large media companies though are why we will likely not see cable offer a la cart programming anytime soon. Cable might be willing, but companies like Viacom aren’t going to be.

  3. G.A. says:

    One wonders how many people here will now have to switch to cable to get their news?

  4. Ron Beasley says:

    Frontier bought the Fios network from Verizon here and the first thing they did was drop the cable TV part because they couldn’t make any money.

  5. Penguin says:

    James – I will gladly trade you all of those Viacom stations, which I still get through Dish Network, in exchange for AMC, which was removed on July 1 over a similar dispute. I’m still kind of pissed that I can’t watch the Breaking Bad premiere on Sunday.

  6. al-Ameda says:

    @Ron Beasley:

    Frontier bought the Fios network from Verizon here and the first thing they did was drop the cable TV part because they couldn’t make any money.

    They must be the only company ever to not make money on their cable franchise. Did they have to greatly over-leverage themselves to buy in?

  7. Herb says:

    They say content is king, but we’ve yet to really see anyone besides Glenn Beck ditch the whole cable/satellite provider route entirely. Right now, even HBO –whose content is perhaps most coveted above all others– couldn’t survive on their own.

    I suspect it may be at least a decade, if not two or three, before that changes, if it changes at all.

  8. Ron Beasley says:

    @al-Ameda: Yes, highly over leveraged and I really don’t expect them to make it. Comcast will end up buying the fiber lines for cents on the dollar.

  9. C. Clavin says:

    I bet they’re back on DTV inside a week and a half.
    As far as Stewart goes a lot of sites just run his good stuff anyway.
    I mean…it’s not like we’re talking SPEED Channel.
    Subscribers made damn sure DTV didn’t drop that one.

  10. That’s fine by me. There’s always online (with AdBlock. No, Viacom, you’re not making a dime off of me). And if it’s something we really need? They’re just driving people towards piracy.

    There are no winners.

  11. Lib Cap says:

    O woe !!! Gnashing of teeth, and rending of garment !!!

    … meh.

    All of this is available vis bittorrent.

    Cable? Sat? So 1990’s.

    The world has changed, and they haven’t paid attention.

  12. James Joyner says:

    @Lib Cap: I don’t think the existence of a criminal underground is an effective substitute for the current legal model. Hulu and various streaming products are a more viable model but they’re simply not there yet in terms of convenience, speed, and affordability.

  13. Lib Cap says:

    @James Joyner:

    James,

    It is what it is.

    The music industry imploded,and the model had to change.

    Now, many musicians give away music, in a way to expand audiences in live performances. Did you price a big name concert ticket lately?

    Movie/ Film followed suit, and the distribution model has changed, affecting both ticket price, and methodology:

    1) Hype, 2) release, 3) pay-per-view 4) dvd-bluray 5) electronic (itunes, etc)

    The fee structure is now so attractive, the hope is that pirating will not occur.

    Once again, the movie industry is focusing on the experience of seeing a movie, not how may theaters they can cram into a local mall. 3-D, better theatres, etc all make for the experience.

    Finally: Has Cable or Sat learned anything from this?

    No. Apparently not, when the top tier of DirecTV is about $120 / month, before taxes.

    They too will have to find out the hard way when revenues dry up.

    I’ve got my phone / internet / DirectTV down to a combined price of less than $70.

    In my opinion, still too high a cost.

    In my opinion, Hulu, Pandora, PlayOn are doing great… but it comes with a required level of technical knowledge on the users part.

    Pandora seems to be the only no-brainer, and Netflix has succeeded by making itself available everywhere.

    OOMA rocks (free telephony).

    All this signals disruption, and disruptions brings change and growth.

    However, for those who are technically knowledgeable enough to do a Hulu or a PlayOn… well it is just a short leap to looking for a copy of “Futurama S07E05 HDTV”

    If one wishes to discuss if it is “morally correct” to do so, well… consider any mix tape that you have made. Cast not the first stone, eh?

    (“tape”… There is only one global provider of magnetic tape today… and that is used for credit card strips).

    Distribution models change.

    Your mileage may vary.

  14. E Smith says:

    How we have all forgotton when TV use to be free, you only got 4 channels but it was free.
    It’s a shame when a company like Viacom who profit margin is good wants more money.
    I got rid of Comast because of high prices, now it looks like I’ll drop Direct TV bcuase of lack of channels,
    That being said when the american people learn to stand up and say enough is enough then big companies will back off.
    It’s really quite simple, if half the people dropped comcast,direct tv, verizon fios, dish, cox etc, you might see a change in attiude.

  15. PJ says:

    @Penguin:

    I’m still kind of pissed that I can’t watch the Breaking Bad premiere on Sunday.

    Watch online:

    Dish dropped AMC, so we’re offering a special live stream of the premiere for Dish customers, right here. You can start registering on Friday afternoon to watch on Sunday