DirecTV to pull the plug on Viacom

by Jason Genet | source: ingrainedmedia

DirecTV® and Viacom have been in negotiations and those negotiations came to a halt. DirecTV® claims they have made their final offer to Viacom and are removing Viacom’s 22 channels (MTV, Spike TV, VH1, Comedy Central and Nickelodeon to name a few).

At the heart of negotiations is Viacom’s request for a 30% rate increase that would amount to over $1 billion dollars. Because of Viacom’s size, they can bundle all of their channels into the negotiations. DirecTV® said, “You should be able to decide which Viacom channels you want and which you don’t.”

Viacom claims that DirecTV® subscribers have made Viacom the most watched programmer and accounted for 20% of all of its viewing. They also claim that they are only paid for 5% of the viewing and the increase is justified.

Wall Street has been talking about Viacom’s value being in decline. Cable and Satellite providers are under attack from streaming videos and Netflix. The ratings decline for networks like MTV and Nickelodeon it is creating a perfect storm for distributors to drop Viacom from its line up. A few years ago this would be unthinkable just based on Nickelodeon. UBS analyst John Janedis recently downgraded his rating on Viacom’s due to concerns related to ongoing ratings weakness. He wrote in his report: “We continue to think the concerns related to Netflix/Amazon viewing are overblown in the near-term, but from a content perspective, our sense is that returning series at MTV are under-performing, which will translate to further make-goods and a drag on ad growth in fiscal year 2013."

Why is this important to MMA fans? The loss of DirecTV® hurts the expansion plans of Bellator, who is in partnership with Viacom. Partnership really mis-states the relationship. Viacom owns a large chunk of Bellator. Bellator can’t jump ship the way the UFC left Spike, they’re stuck until sold off. Bellator goes where Viacom goes.

Many thought the Viacom deal would allow Bellator to become the second largest American Mixed Martial Arts promotion. Suddenly Viacom itself is in danger of The Judgement by the market. With One FC’s ten year deal with ESPN STAR for Asian distribution and the DirecTV® Viacom deal hanging by a thread we may see One FC take the number two spot in the sport. Thinking that an Asian distribution deal doesn’t threaten Bellator’s North American position would be a mistake. The missing facts are: Victor Cui, CEO and owner of One FC, was at one time a senior director for ESPN STAR, and ESPN STAR is a 50-50 joint project between ESPN and Rupert Murdoch’s News Corp – the single largest media presence in North America, which includes, yes, FOX.

Update - As of this morning Nickelodeon, MTV, VH1, Comedy Central and other cable channels owned by Viacom were taken off of DirecTV’s lineup early Wednesday morning, beginning a channel blackout that has angered viewers across the United States.  In total 20 million homes lost access to Viacom's channels.

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Recent Comments »

AK-BJJ site profile image  

7/11/12 5:42 PM by AK-BJJ

Good... keep that shit off and lower my bill. Thanks

Rogans secret stash site profile image  

7/11/12 5:14 PM by Rogans secret stash

I was reading up on this shit last night. What Viacom isn't telling you is that ratings on nick are down and so are mtvs. I forget the numbers, but it was upwards of 25%. If remember later, I'll see if I can find what the actual numbers were.

Kostakio site profile image  

7/11/12 5:12 PM by Kostakio


Debaser site profile image  

7/11/12 4:46 PM by Debaser

HULU+NETFLIX+Torrents= Win

TARRat site profile image  

7/11/12 3:11 PM by TARRat

Eh, not always. I haven't had MSG on Dish in years, and I haven't had SNY on Dish in at least a year. I don't believe I'll be seeing either network anytime soon.

Media Monster site profile image  

7/11/12 3:01 PM by Media Monster

Here are the facts provided by Viacom: Viacom accounts for 20% of all viewing on DIRECTV – more than any other programmer, and above the national average for all distributors. Nickelodeon is the #1 most-watched cable network on DIRECTV -- kids in DIRECTV homes spend 50% of their viewing time watching Nickelodeon networks. Yet, Viacom currently account for less than 5% of DIRECTV's programming expenses – the lowest share of any programmer in the industry. Viacom proposed a fair deal that is consistent with what every other distributor recieves from DTV. There's a reason why DirectTV is so cheap, and now it's biting them in the ass. 

DoomFarmer site profile image  

7/11/12 2:50 PM by DoomFarmer

Believe me I have as have many others.Dish's response was to cut $10 off my bill and tell me to buy the episodes on Amazon or iTunes...

clattymine site profile image  

7/11/12 2:20 PM by clattymine

 This. THIs. THIS. If I only had 50 or so channels of my choosing, TV would be PERFECT.

Rogans secret stash site profile image  

7/11/12 2:02 PM by Rogans secret stash

Fuck all those greedy bitches. I have the top tier dtv package. All the movie channels. I'm not paying any more than I do. I'll start stealing as much tv/movies as possible if they want to jack up my rates. I'm not getting a discount for the 20 whatever channels that are blacked out as of now. Not to mention the 20 each UFC ppv me, my brother and a buddy kick in to watch. Honestly, if I could just buy the channels I actually watch, I'd pay for probably 10. Not the hundreds that I could give a fuck less about. Only reason I have all those is they force me to have them for the few channels I actually want.

zedlepln site profile image  

7/11/12 1:49 PM by zedlepln

We're in the midst of a shift in the paradigm in how (financially) content is delivered. Content providers, which include the major networks, the cable networks, and even the local TV stations are passing increasing costs to the distributors of content, which are the cable companies, satelite providers and (for over-the-air signals) local TV stations. This trend will continue into the future. It was just a few years ago that networks compensated local TV stations for broadcasting their programing. Now, the relationship has reversed, and local affiliates have to pay larger and larger license fees. Those stations, in turn, had to pass charges on to cable operators and satellite providers in the form of retransmission fees as their agreements renewed. As other agreements between providers and distributors of content renew, we will continue to see the impact of negotiations fail to come to agreement. The result will probably make for higher prices paid by the consumer.