Viacom and DirecTV have split over carriage fee negotiations, with 17 million DirecTV customers now without Nickelodeon, Comedy Central and VH1. The faceoff got very public yesterday, and today is looking to hit in a much more extreme way, with both companies poised to roll out advertisements across multiple platforms taking their respective cases to the public.
"We proposed a fair deal that amounted to an increase of only a couple pennies per day per subscriber, and we remained willing to negotiate that deal right up to this evening’s deadline," said Viacom in an unbylined statement on the company blog earlier today. If that sounds suspiciously like "you can feed a starving mega corporation for only pennies a day," it probably should. Per subscriber, most cable companies pay an average of $1.21 per month for a high-rated cable network like TNT; if "a couple" literally means "two," that means Viacom is asking for about a 60-cent bump—basically half a TNT—from DirecTV.
DirecTV called it a 30 percent rate hike, estimating its total cost to the company (and eventually the subscribers) at $1 billion. Its ad to consumers, however, scolds Viacom for taking "an all-or-nothing" approach to carriage, requiring the MSO to keep all the Viacom networks rather than just the popular ones. That's not exactly dirty pool, by carriage negotiation standards; no network conglomerate would ever see growth if it were.
On the other hand, the agreement is more than seven years old, and DirecTV pulled the Viacom networks off the service at 11:50 last night—10 minutes of negotiating time shy of the midnight deadline.
Sticking points in the negotiations likely include flagging ratings at Nickelodeon, for years one of Viacom's flagship channels. There's also Netflix to consider—Viacom has taken the leap into over-the-top content in a way that many contend has hurt its linear cable standing.
One thing is for sure: The PR fight is a harder battle for DirecTV than the carriage negotiation fight. Viacom has a slew of ready-to-air (and -print) ads starring its various network spokespeople, and DirecTV has CEO Mike White. DirecTV assures consumers that it will eventually bring the network back, so expect the slugfest to be ugly and short.