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Viacom and DirecTV: how a royalty dispute resulted in 26 channels going off-air

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On July 11th Viacom pulled all 26 of its channels from DirecTV's satellite network. The companies have since settled their differences and all the channels are now back on-air — but how did a simple royalty dispute result in millions of subscribers losing access to popular channels like MTV, Comedy Central, and Nickelodeon?

  • Andrew Webster

    Jul 20, 2012

    Andrew Webster

    Viacom will receive over $600 million annually as part of new DirecTV deal, says Bloomberg

    DirecTV Viacom Colbert Report
    DirecTV Viacom Colbert Report

    Earlier today Viacom and DirecTV announced a new long-term agreement that would bring all 26 Viacom channels back to the satellite network, but at the time terms of the agreement weren't made clear. Now Bloomberg is reporting that Viacom will receive more than $600 million annually as part of the arrangement, which is said to be a seven-year-long deal. Citing "a person with direct knowledge of the matter," Bloomberg says that the $600 million number is an increase of at least 20 percent from the previous agreement between the two companies. DirecTV had previously claimed that Viacom was attempting to increase its fees by 30 percent.

    Viacom originally pulled channels including MTV, Comedy Central, and Nickelodeon over a week ago, due to an ongoing contract renewal dispute, but with the new agreement all 26 channels will be restored. "Viacom is extremely pleased to bring its programming back to DirecTV subscribers," the company said this morning in a press release, "and thanks everyone affected by the disrupting for their patience and understanding during this challenging period."

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  • Aaron Souppouris

    Jul 20, 2012

    Aaron Souppouris

    MTV, Comedy Central and 24 other channels return as DirecTV and Viacom settle dispute

    Daily Show Jon Stewart on DirecTV and Viacom
    Daily Show Jon Stewart on DirecTV and Viacom

    Viacom and DirecTV have reached a long-term agreement to bring all 26 Viacom Networks channels back to the satellite network. DirecTV Subscribers have been without Comedy Central, MTV, Nickelodeon, and others for over a week after the two companies disagreed on contract renewal terms. DirecTV claimed that Viacom was attempting to increase its carriage fees by 30 percent, and refused to pay the higher price.

    The exact terms of the agreement aren't clear at present. In a press release, Viacom said:

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  • Dante D'Orazio

    Jul 14, 2012

    Dante D'Orazio

    DirecTV CEO: Viacom should give 'the choice to pay for only those channels you watch'

    DirecTV Viacom Colbert Report
    DirecTV Viacom Colbert Report

    The scuffle between DirecTV and Viacom to negotiate a new contract continued today with a new ad featuring the satellite provider's CEO Mike White addressing customers and (naturally) placing the blame on the media conglomerate for "the regrettable tactic" of deciding to "take their channels away from our customers." None of that is new — not to this dispute and not to these ever more frequent contract renegotiation battles — but White continues in the ad to say that "At the very least, we think Viacom should be willing to give your family the choice to pay for only those channels you watch." At first blush that certainly sounds a lot like DirecTV is interested in offering channels à la carte — a very appealing option for consumers — but that seems unlikely. Instead, White is probably claiming that Viacom is mandating DirecTV include all 26 channels in its TV plans, relying on powerhouses like MTV, Nickelodeon, and Comedy Central to bring in lesser-known stations.

    It's not clear which company — if not both — are to blame for the loss of service, but DirecTV's ad comes close to teasing its customers with features like an à la carte option that the company is unlikely to deliver to keep subscribers on its side. The conflict reportedly began when Viacom demanded a 30 percent increase in royalties (a total of nearly $1 billion more) for the satellite provider to continue carrying its channels.

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  • Bryan Bishop

    Jul 12, 2012

    Bryan Bishop

    Viacom pulls 'Daily Show,' 'Colbert Report,' and other shows offline in wake of DirecTV dispute

    Daily Show blocked online
    Daily Show blocked online

    Viacom pulled 26 of its channels from DirecTV today as a result of failed contract renegotiations between the two companies. As noted by the Washington Post, Viacom has now turned off one of the few fallbacks for DirecTV customers, putting a halt on the streaming of full-length episodes from several of its websites. MTV, Comedy Central, Nickelodeon, and several others have removed episodes from their sites — trying to watch an episode of The Daily Show returns the above notice that they are no longer available — and instead visitors are treated to an ad prompting viewers to call DirecTV and complain about the outage.

    With no easy way to determine just which internet users are DirecTV subscribers or not, Viacom has yanked online streaming for all visitors, so even if you're a happily-paying Time Warner Cable customer with access to MTV on your television, you'll still be left hanging on the streaming front. Some programs on Hulu are also said to have been pulled. The move was no doubt prompted by a new section of DirecTV's website dubbed "Other Ways To Watch," that has been directing subscribers to online sources where they could view programming caught up in the blackout.

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  • Sean Hollister

    Jul 11, 2012

    Sean Hollister

    DirecTV loses 26 Viacom channels after contract dispute

    DirecTV Viacom
    DirecTV Viacom

    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.

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  • Nathan Ingraham

    Jul 10, 2012

    Nathan Ingraham

    DirecTV to lose MTV, Comedy Central, and 24 other Viacom channels tomorrow due to contract disputes

    DirecTV Viacom
    DirecTV Viacom

    Viacom is apparently using a strong tactic in its contract negotiations with DirecTV — the TV provider now says that it will lose access to a total of 26 Viacom channels (including MTV, Comedy Central, Nickelodeon, and more) as of July 10th if a deal isn't reached. For its part, DirecTV says that it has urged Viacom to keep the channels available to customers while they work out negotiations, but the provider claims that Viacom sent a letter yesterday stating its intention to remove these channels unless DirecTV pays an additional 30 percent (or a claimed one billion dollars) over what it currently pays. Viacom, of course, is painting DirecTV as the bad guy — in a video spot, the network conglomerate claims that "DirecTV is getting rid of MTV, Nickelodeon, Comedy Central, BET, and more."

    In the meantime, DirecTV is trying to rally support on Facebook and through a special page explaining the situation (that unsurprisingly paints the provider in a very flattering light). The provider has also listed out a number of online resources for customers to go to and continue to view Viacom's programming — it lets users pick a specific network and show and then presents both free and paid online viewing options. Unfortunately, this sort of tactic during provider / network negotiations is becoming rather commonplace — just a few weeks ago, Dish Network customers lost access to AMC. For the sake of DirecTV customers, we're hoping these media giants can privately work out their business and not let it affect the end user.

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