Finally! Are favorite channels are back! Cable programming giant Viacom and satellite broadcaster DirecTV reached a deal early this morning, ending a 9-day battle that left about 20 million homes without more than a dozen popular channels including MTV, Nickelodeon, Comedy Central and VH1.
The drama was over fees that Viacom was seeking for its programming, which DirecTV viewed as a steep hike.
DirecTV had previously said that Viacom was asking for a 30% increase in fees, while Viacom said it was just asking for a fair deal. DirecTV was able to negotiate a lower increase than what Viacom had sought, according to a person familiar with the situation. The deal has a seven-year term.
The short fight seemed to hurt Viacom more than DirecTV. Ratings for many of its cable networks saw declines of more than 20% during the blackout. Nickelodeon in particular took a beating as Disney Channel and other rival networks gobbled up viewers.
Terms of the deal were not disclosed, but both companies said it covers all of Viacom’s networks. Not part of the deal is Epix, a pay movie channel that DirecTV claimed Viacom was trying to force it to carry.
26 Viacom properties including Comedy Central, MTV, Nickelodeon, CMT, Logo, and BET, have gone dark for DirecTV’s 20 million subscribers after both sides failed to reach an agreement over carriage fees.
According to a statement released by DirecTV shortly after midnight, Viacom is looking to increase fees by up to 30% — over $1 billion. “We have absolutely no problem compensating Viacom fairly, but they have now knowingly put our customers in the unreasonable position of either accepting their extravagant financial demands or losing some of their favorite TV shows,” said DirecTV exec VP Derek Chang.
Viacom released a separate statement claiming DirecTV — America’s second largest pay-TV operator — has been enjoying “way below market rates” for the past seven years, and the fee increase amounts to only “a couple pennies per day, per subscriber.”
Analysts say a dispute over programming fees was inevitable due to the significant ratings drop experienced by Viacom in recent years. “We anticipated such an event, although we said we didn’t know if it would happen in weeks, months or years,” said Todd Juenger of Bernstein Research.
Still, Viacom’s importance to DirecTV means the content provider will likely get what it wants. “Viacom claims its programming represents 20% of the viewing on DirecTV,” said Alan Gould of Evercore Partners, “so we would assume DirecTV would lose some subscribers, particularly families that want Nickelodeon.”
A similar dispute between Dish Network and AMC led the latter to pull its channels from the satellite provider. But analysts expect the matter to be settled in time for the return of AMC’s popular TV show Walking Dead.
Viacom on Wednesday shut off access to full-length episodes on its own websites such as MTV.com and ComedyCentral.com to all visitors, even those who have no stake in the dispute.
Viacom’s sites are now taken over by a video ad that informs visitors about the dispute and prompts people to call DirecTV to complain.
Some areas of the websites that once offered full episodes now say “Full episodes are currently unavailable. We apologize for the inconvenience.”
Certain episodes of Viacom programming, such as two-week-old episodes of “The Daily Show” and “The Colbert Report” were available online at Hulu. Others, like “Jersey Shore,” were blocked.
SCOOP: VIACOM / DIRECTV/BlackMediaScoop.com