DirecTV and Viacom played chicken, and the customer lost: Viacom just pulled the plug on as many as 26 DirecTV channels, including MTV, Comedy Central, Spike, VH1, and Nickelodeon. As usual, the loss of service is the direct result of a contract renewal dispute. DirecTV claimed that Viacom was seeking an additional 30 percent increase in royalties from DirecTV to renew its subscriptions, estimated at an additional $1 billion outlay in total, and apparently DirecTV wasn't willing to pay up nor Viacom willing to budge in time to avoid a blackout.
As usual, both parties have public relation campaigns in place to ensure that customers blame the other company for the loss of service. DirecTV has a web campaign, "DirectTV Promise," which calls the rate increase exorbitant, and claims that it asked Viacom to keep the service going while it attempted to bargain. Viacom has a site called "When DirecTV Drops" and several blog posts, including one that claims that DirecTV, not Viacom, was technically the one to drop the Viacom channels. A blog post titled "Unravelling the Spin" claims that DirecTV subscribers would be paying the equivalent of a couple of additional pennies per day for the rate increase, and that DirecTV is headed for record profits.
Meanwhile, the Viacom-owned BET has taken to Twitter to express its "disappointment that @DIRECTV refused to negotiate with us," and Spike program Impact Wrestling has initiated a campaign of its own, with Hulk Hogan telling fans to complain to DirecTV in this YouTube video:
Both DirecTV and Viacom clearly state that they're willing to negotiate. "We have absolutely no problem compensating Viacom fairly," and "We have been very willing to get a deal done," writes DirecTV VP Derek Chang. "We are hopeful that DirecTV will work with us towards a resolution," writes Viacom.
Here are full statements from both parties now that the blackout has commenced:
"We are deeply disappointed that DirecTV dropped Viacom’s channels before our midnight deadline this evening, severing our connection with its nearly 20 million subscribers nationwide. 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. However, DirecTV refused to engage in meaningful conversation. We are hopeful that DirecTV will work with us toward a resolution, and stop denying its subscribers access to the networks they watch most."
"We have been very willing to get a deal done, but Viacom is pushing DIRECTV customers to pay more than a 30 percent increase, which equates to an extra $1 billion, despite the fact that the ratings for many of their main networks have plummeted and much of Viacom’s programming can be seen for free online. Viacom sent us a letter last night that outlined our obligations to remove the channels by midnight or face legal action just as they were falsely telling viewers DIRECTV was responsible.
Let's be clear, Viacom took these channels away from DIRECTV viewers. We have absolutely no problem compensating Viacom fairly, but they have now knowingly put our customers in the unreasonable position of either accepting their extravagant financial demands or losing some of their favorite TV shows. We feel our customers should not have to pay more for these networks than the customers of any other TV provider. We reiterated this to Viacom today and have not heard back from them.
We understand that Viacom’s actions are inconveniencing our customers so we are doing everything we can to help them find alternative programming until this gets resolved. Customers will now see a variety of replacement channels available to them on one screen, in a Mix Channel format, when they tune to a Viacom channel. For instance, those going to the Nickelodeon channel slot will see alternative choices for children’s programming such as The Disney Channel, ABC Family, Cartoon Network, PBS Sprout, The Hub and Boomerang. Customers can also see full-length Viacom episodes for free by going to www.directvpromise.com and clicking on the ‘Other Ways to Watch’ tab.
You'll have to make up your own mind about which company to blame, if not both of them.