As Viacom and DirecTV remain unable to reach a programming fee agreement, viewers remain unable to watch 26 Viacom channels including Nickelodeon, Comedy Central, and MTV. Viacom wanted a 30% rise in their rates, claiming that it would amount to an increase of only $7.30 per subscriber per year and accounts for less than 5% of DirecTV’s expenses, their programs make up 20% of DirecTV’s audience but they are only paid for 5%, and DirecTV had been paying far less than market rates for Viacom’s programming for a long time- a rate below any of their other distributors. DirecTV argues that Viacom’s network’s ratings are down, their stock has been downgraded, and their subscribers shouldn’t have to pay $1 billion extra for less popular Viacom programming that they may never watch.
As a result of failed negotiations, DirecTV stopped airing all 26 Viacom channels at 11:46 Tuesday night. An additional channel was added with a corporate infomercial featuring CEO Mike White and technical difficulty announcements, and on the channels dropped viewers are directed to stations with similar programming such as Disney in place of Nickelodeon. Without any other way of reaching their viewers, Viacom used social media to reach consumers with parodies of programming on a website and facebook page. When DirecTV directed subscribers to websites where they could still watch Viacom programming, Viacom responded by making recent content unavailable online. When Fox and Cablevision had a disagreement back in 2010, Fox was able to block any Cablevision subscribers from streaming full episodes on the web- but since DirecTV doesn’t provide broadband, Viacom can’t distinguish between DirecTV subscribers- so they simply made streaming unavailable to everyone.
This brings to mind the standoff between Dish Network and AMC last month when Dish claimed that AMC was overcharging for shows with low viewership, which resulted in 14 million Dish customers still being unable to watch AMC. Marketsmith Director of Media Services Chris Conderino remarks, “In the short term, this will have a greater impact on short form decisions as the achievable audience and CPM efficiencies will be affected. If the black-out extends, it will affect their subscriber base.” The risk of DirecTV subscribers switching cable providers increases the longer this conflict is left unresolved, and Viacom is doing all they can to increase negative sentiment among them. However the two networks are reportedly once again in talks, so this hiatus could be short-lived.