DirecTV to Drop 26 Viacom Channels at Midnight on Tuesday, July 10Also, from Reuters via Yahoo! News:
DirecTV to drop Nickelodeon – Spot #1 from Viacom on Vimeo.
Viacom's distribution agreement with DirecTV is set to expire at midnight on Tuesday, July 10. We’ve been negotiating for months and even offered DirecTV an extension past the agreement’s original June 30th expiration date. As recently as today, we made significant economic movement in direct conversations with DirecTV.
However, despite our best efforts, DirecTV has rejected all of our proposals to renew our agreement. This evening, DirecTV provided Viacom with a counter proposal that included a lower rate than Viacom receives from any other distributor in the industry. With this offer, our negotiations have reached an impasse.
This means that, as of tomorrow night, nearly 20 million DirecTV subscribers will be without entertainment from the programmer they watch most. A total of 26 Viacom channels, including Nickelodeon, MTV, Comedy Central, BET, VH1, CMT, Spike TV, TV Land and more won't be available.
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.
If negotiations remain stalled, DirecTV will drop Viacom's channels tomorrow tonight. No Dora, no SpongeBob, no Teen Wolf, no 106 & Park, no Daily Show, no Colbert, and no Snooki – a regrettable and avoidable turn of events if there ever was one, and an outcome that our team has worked tirelessly to avoid.
Here's the official statement from Viacom:As of midnight on Tuesday, July 10, DirecTV will drop 26 Viacom channels, including Nickelodeon, MTV, Comedy Central, BET, VH1, CMT, Spike TV, TV Land and more. Viacom is the most watched programmer on DirecTV. Nickelodeon is the most watched cable network on DirecTV. We regret that DirecTV refuses to consider a fair deal that recognizes the value of Viacom programming. We urge DirecTV customers to call 800-531-5000 or visit www.whendirectvdrops.com and demand that DirecTV put its customers first, and keep Nickelodeon, MTV, Comedy Central, BET and all of Viacom’s channels.Here are some indisputable facts about Viacom and the strength of its networks on DirecTV:
* Viacom accounts for 20% of all viewing on DirecTV – more than any other programmer and above the national average for all distributors.[1] Yet Viacom currently accounts for less than 5% of DirecTV’s programming expenses. [2]
* Nickelodeon is the #1 most-watched cable network on DirecTV. [1]
* Kids in DirecTV homes spend 50% of their viewing time watching Nickelodeon networks. [1]
* Over the past three years, Viacom has completed nearly a dozen significant distribution renewal agreements privately and without disruption to consumers.
And here are some indisputable facts about DirecTV:
* Over the past three years, DirecTV has fought publicly over carriage agreements with seven different programmers – Fox, Tribune, Diversified Communications, Northwest Broadcasting, Sunbeam, Belo, G4, Versus, and YES Networks – and dropped five of them.
* DirecTV is on track to deliver $5 billion in profit in 2012.[3]
* Over the seven year life of our expiring deal, DirecTV doubled its worldwide revenue, tripled its profits and increased its subscriber base by more than 32%. [3]
* Needless to say, Viacom will continue to work to convince DirecTV to keep our channels, and strike a fair and equitable agreement. Check this space for updates on the situation.
For more information, you can visit the website Viacom has set up to notify consumers of DirecTV’s decision to drop its channels at www.whendirectvdrops.com or on Facebook at www.facebook.com/WhenDirecTVDrops.
Also, you can check below for some of the addtional spots we’re airing to notify viewers across our networks.
Sources:
1 Nielsen Custom Ratings DirecTV Analysis, Ad-Supported Cable Networks plus Disney and Nick Jr., 12/27/10-12/25/2011 and Kantar Media 01/1/2011-12/31/2011, based on Nielsen Ad supported cable networks plus Disney and Nick Jr. All networks measured 24 hours except for Nick, NAN, Cartoon and Adult Swim, these networks were cutback to 6a-9p for Nick and Cartoon and 9p-6a for Nan and Adult Swim.
2 SNL Kagan
3 DirecTV Q1 2012 earnings results
SpongeBob blackout looms for DirecTV subscribersAlso, Tweeted (posted) by Nick Jr. Channel USA on their official Twitter profile page (@NickJr):
(Reuters) - DirecTV customers may not see SpongeBob, Snooki or Jon Stewart after midnight on Tuesday because of a heated impasse taking place between the largest U.S. satellite TV provider and Viacom Inc, the company behind the popular cartoon, reality series and political talk show.
In a blog post on Viacom's website, spokesman Mark Jafar wrote that despite Viacom's "best efforts" DirecTV rejected proposals to renew their contract. Nearly 20 million DirecTV customers will not have access to 26 Viacom channels including MTV and Nickelodeon [and Nick Jr. and TeenNick] if a new deal isn't struck by midnight Tuesday.
The stand off is the latest saga taking place between media companies and cable and satellite TV providers over the cost of content. These providers pay a fee to media companies that allows them to carry channels such as MTV. Programming is the single biggest cost for distributors and in recent years they have taken a hard line against what they view as unreasonable "carriage fee" increases by content companies like Viacom.
On July 1, AMC Networks, the company behind "Breaking Bad," "The Walking Dead," and "Mad Men" was removed from the Dish Network after the two companies could not reach a new contract.
The possibility of DirecTV dropping Viacom's networks was foreshadowed in a mid-June note by Bernstein Research analyst Todd Juenger.
Citing falling ratings at Nickelodeon and other Viacom networks, Juenger wrote, "We believe it is no longer inconceivable that a distributor would drop Viacom, or at least engage in a public battle with them over price increases."
Viacom is in the process of negotiating a new deal with DirecTV to replace its current seven year contract after it expires. Viacom, controlled by billionaire Sumner Redstone, described the contract as "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."
DirecTV said that Viacom "now insists" to be paid 30 percent more -- or about a billion extra dollars -- for the same programming.
"If Viacom wants so much more, then we believe your family needs to be able to choose which Viacom networks you want to pay to keep and which ones you don't," DirecTV said on a question and answer section on its website.
DirecTV is alluding to a debate currently raging among content owners and buyers about the ability to cherry pick channels. As it stands now, content providers typically package all of their channels together -- known in the industry as "bundling" -- rather than let customers choose the ones they want to watch.
"To be clear, we have offered Viacom increased fees for their networks going forward; we just can't afford the extreme increases they are asking for," DirecTV said.
This is not the first time a distributor has threatened to black out Viacom's channels due to a contract dispute. In 2004, Dish actually dropped Viacom cable networks after the two sides failed to reach agreement on a new distribution deal. But, citing the popularity of Viacom's channels, BTIG analyst Richard Greenfield noted the black out only lasted "for about 46 hours before Dish caved to Viacom's demands."
"It will be interesting to see whether DirecTV's [CEO] Mike White wants to go to war with Viacom and make the same mistake Charlie Ergen made 8 years ago. Hard to imagine DirecTV without Nick and Nick Jr.," Greenfield wrote in a blog post early Tuesday.
Tonight @DIRECTV is dropping Nick Jr.! Call them now at 1-800-531-5000 to demand they #keepNickJr. #WhenDirectTVdrops http://www.facebook.com/WhenDirecTVDropsAnd:
VIDEO:@DIRECTV will be taking away Nick Jr. & your child’s favorite shows!Keep it on the air! Call now! 1-800-531-5000 http://bit.ly/LMBTwmAlso, Tweeted (posted) by Nickelodeon USA on their official Twitter stream (@NickelodeonTV):
Tonight @DIRECTV is dropping @NickelodeonTV! Call them now 800-531-5000 to demand they #KeepNick! http://at.nick.com/NZyCs6 #WhenDirecTVDrops
