DirecTV Subscribers Could Lose Viacom Networks at Midnight

UPDATED: Viacom in a blog post says that carriage talks "have reached an impasse" and that it deserves higher fees, while DirecTV said the company is looking for an increase of more than 30 percent.

A carriage-fee showdown between entertainment conglomerate Viacom and satellite TV giant DirecTV could lead to its networks not being available to DirecTV subscribers as of midnight Tuesday.

"Our negotiations have reached an impasse,” Viacom, led by CEO Philippe Dauman, said in a blog post. It argued that DirecTV offered "a lower rate than Viacom receives from any other distributor in the industry.” The blog post said that DirecTV may drop all Viacom channels as of midnight.

DirecTV, led by CEO Mike White, has about 20 million subscribers. It carries 26 Viacom channels, including Nickelodeon, Comedy Central and MTV.

DirecTV in a response posted online highlighted that it wouldn't drop the Viacom channels as that would be the entertainment company's decision: "You won’t lose them unless Viacom chooses to take them away." It added in a tweet: "To be clear DirecTV has every intention of keeping Viacom channels up until we get a deal done."

The war of words between the two industry giants is the latest battle between a distributor and a cable network owner, but it involves two powerful sector players.

DirecTV said that Viacom is pushing for a carriage fee increase of more than 30 percent. "That’s over $1 billion on top of what you already pay for not only MTV and Nickelodeon but also all of their other channels that you might never watch. You should be able to decide which Viacom channels you want and which you don’t."

Viacom also said, “Our agreement with DirecTV is seven years old -- ancient by the standards of the ever-evolving media industry -- which means that DirecTV has enjoyed way-below-market rates for Viacom’s networks for a very long time.”

The company also said that it is the most-watched network operator on DirecTV, attracting about 20 percent of all its viewing, while it argued that it only gets 5 percent of DirecTV's programming spend.

Email: Georg.Szalai@thr.com

Twitter: @georgszalai

