From Entertainment Weekly.
As the dispute between Viacom and DirecTV continued Wednesday, the
conglomerate yanked access to some of its more popular programming that
was available free on company websites. Fans can no longer watch full
episodes of shows like SpongeBob Squarepants and iCarly or Jersey Shore and The Daily Show,
which is sure to further anger the 20 million DirecTV subscribers who
continue to find a dark screen when they change the channel to
Viacom-owned nets like Nick, MTV, Comedy Central and VH1.
"Viacom is now not only holding DirecTV customers hostage, but all
online viewers as well," according to a statement from DirecTV. "Is this
just another underhanded negotiating tactic, or does this mean that
Viacom will no longer offer its content free online?"
The latter is certainly possible. Ratings for Viacom's once shining star, Nickelodeon, have dropped double-digits in the last year while some of
its popular shows were available online for free – one likely reason
why DirecTV is refusing to pay the 30% more Viacom wants for all of
its channels. The carriage agreement between the two expired last
weekend; by midnight on Tuesday, all 17 Viacom channels went black on
the satellite provider. "That's over $1 billion on top of what you were
already paying 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," according to a
statement on DirecTV's website.
A spokesman for Viacom says it is still offering lots of free
episodes online of its programming; it just removed some of them because
they were only meant as a marketing tool.
Meanwhile, Cox Communications took the unusual step to back DirecTV, which is a competitor, in its fight against Viacom.
"This is a reflection of an unbalanced multichannel video business
model that has two major effects: continued significant increases in the
cost of programming that are the main driver of rising cable and
satellite TV service bills, and wide disparities between what large and
small distributors pay for programming, resulting in similar disparities
in what respective customers pay for service," said Bob Wilson, Cox's
senior VP of the cable operator. Cox has almost 5 million subscribers.
Analysts, on the other hand, chided DirecTV for allowing the Viacom
nets to go dark. "While we appreciate DirecTV's goal of maintaining
robust free cash flow and an aggressive share repurchase program, we
believe losing a wide array of programming valued by their subscribers
could seriously harm the company," according to Richard Greenfield of
BTIG Research. "Nickelodeon, despite its ratings declines in the past
year, remains the No. 1 cable network in the US and Nick actually
outperforms in DirecTV households. Hard to imagine DirecTV maintaining
its current subscriber base and/or attracting new subscribers without
its most viewed cable network."
And how; fans took to Twitter on Wednesday to voice their displeasure
with the carriage dispute. By Wednesday night, Viacom was a trending
topic with outspoken show runners like Sons of Anarchy's Kurt Sutter even weighing in with pejoratives that we, unfortunately, can't print here.
Nickelodeon
