Viacom and DirecTV Negotiating Failure Leaves 26 Channels Dark

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The latest dispute between a programmer and pay TV operator went right up to the midnight wire — and then straight over the cliff as 26 Viacom channels went dark on DirecTV.

And, as usual, no matter what the claims are by either side, the subscribers are in the middle while the companies negotiate how much of an increase Viacom will get.

The dueling messages Viacom and DirecTV were sending as the deadline loomed had little to do with actually informing customers. At one point, the messages even showed up on the same screen:

DirecTV’s overall attitude is a tad reminiscent of Kevin Bacon yelling “All is well. Remain calm” in Animal House while he’s being trampled. The difference is DirecTV is not a victim. Neither is Viacom, even though the “couple of pennies a day” increase it wants adds up to $7.30 in additional fees per subscriber over the course of a year — about $144 million a year based on DirecTV’s nearly 20 million subscribers.

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If the new contract runs as long as the one that just ended after seven years, the bill would be a little over the $1 billion DirecTV claims Viacom wants; Viacom says DirecTV’s claim that it’s looking for a 30 percent increase is too high but insists its been underpaid for the networks as they increased in value to DirecTV.

The satellite operator wants to keep customers from getting agitated enough to switch to competitors; the more temporary it sounds, the less likely they are to move. The programmer wants them to have a sense of what they’re missing: Comedy Central, MTV, Nickelodeon, Nck Jr., and more.

DirecTV set up alternate channels for every Viacom network, starting a kind of corporate infomercial on a loop with CEO Mike White as the barker before the Viacom networks went offline. Viacom said in a blog post that DirecTV cut the signal at 11:50 pm without warning. (BTIG analyst Rich Greenfield reported that too on Twitter, then withdrew it.)

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Around midnight EDT, when the extension on the contract expired, the regular channels on our DirecTV showed technical difficulty announcements, White was looping through with his message and, no longer able to reach DirecTV’s nearly 20 million subscribers, Viacom was hitting the social media angles with a website and Facebook page.

It also played all the character angles, including a parody of DirecTV’s own current TV ads — but without the ability to embed it. The Facebook page, though, includes lots of downloadable art.

and, of course,

Update: In a corporate blog post, Viacom said Wednesday morning that DirecTV dropped its networks at 11:46 p.m. Tuesday night, replacing most of them with the CEO loop mentioned above. The exception was Nickelodeon, replaced with “a mosaic image of non-Viacom kids’ programming.”

Republished with permission from paidContent, which writes about the transformation of the media-and-entertainment industries in the digital era, with a focus on emerging-business models and technologies.
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