Negotiators spend just “10 minutes a day talking” about substantive matters says Denise Denson, Viacom Media Networks’ EVP for Content Distribution and Marketing. “I don’t see it ending any time soon.” Viacom’s 17 channels went dark for DirecTV’s 20M customers early last week. Afterward Viacom CEO Philippe Dauman offered a compromise proposal to DirecTV CEO Michael White while they were both at the Allen & Co confab in Sun Valley. “Philippe hasn’t heard personally back from Mike since,” Denson says. In her view DirecTV is dragging things out because “in the short term the programmer does feel the pressure from the loss of subscribers.” The satellite company was “bullied into this by their investors” and wants to send a signal to other programmers not to ask for big price increases. But she says that DirecTV is being disingenuous with its subscribers by urging them to hang on in the hope that a resolution could come soon. “It’s completely misleading,” she says. “It is unfair to the consumer that they don’t have the facts.” If they did, and switched to a rival pay TV provider, then “it would be very difficult for DirecTV in the long run.”
Meanwhile the facts about the negotiations remain in dispute. DirecTV says that last night it “accepted all material terms” Viacom wanted for its 17 channels. But the programmer also “insists that we carry the EPIX channel at an additional cost of more than half a billion dollars. We know our customers don’t want to pay such an extreme price for an extra channel, they simply want the ones they had returned to them.” But Viacom says that’s inaccurate. “We’ve offered packages without EPIX, packages with EPIX, and packages with significant incentives to take EPIX.”
Denson says that Viacom is making “compromises and proposals trying to get our channels back for our customers” but “I don’t think they’re engaged.” Viacom has put “probably the most aggressive (TV Everywhere) digital rights we’ve offered to anybody on the table.” The programmer also has compromised on the length of the deal: DirecTV wanted seven to 10 years and Viacom wanted far less. “We’re willing to do a deal at seven at this point,” she says.