The staring contest between Viacom and DirecTV will end, one way or another, at midnight tonight: the network conglomerate posted on its blog this afternoon that it was ready for DirecTV to drop its channels from the lineup at the end of Tuesday, July 10.
Negotiations between the two companies have broken down in the final hours; the seven-year-old contract took long enough to rework that both parties agreed to an extension beyond the original June 30 deadline, but are now at an impasse.
As always in carriage negotiations (notably in the Dish/AMC faceoff recently), there's plenty of finger-pointing. Viacom accused DirecTV of demanding an absurdly low rate for its channels after coasting on an unusually long agreement for many years, while DirecTV declared that it has no intention of letting the network company "leverage over a 30 percent increase (that’s an additional one billion dollars) from our customers."
There's more at stake, as well—Viacom says it doesn't get enough of DirecTV's programming spend (about 5 percent), even though it draws in about 20 percent of DirecTV's viewership. DirecTV insists that it's not dropping the channels, it's having them taken away; Viacom doesn't want to allow the negotiations to go on any longer.
In any case, with both companies making direct appeals to the public, neither can afford to see negotiations enter another round, so they certainly will end, either in a stalemate or an agreement, this evening. DirecTV has one thing right: whatever the eventual solution (and rest assured that if DirecTV does drop Viacom tonight, it won't be for long), the increased cost will be cheerfully passed on to the consumer.
Viacom is not in the greatest bargaining position at the moment. Extended ratings woes at Nickeolodeon are going to kneecap any negotiations the company enters into for a while to come. But it's also worth noting that reasoned argument ceases to be a factor when two companies enter a PR war and one of those companies can pressgang Dora the Explorer into demanding that a concerned public call its opponent to complain.