UPDATE, 5:59 AM: DirecTV says that it doesn’t want to drop the Viacom channels but the company “sent a letter to us late last night, forcing us to take these channels down by midnight tonight if we don’t come to an agreement….They are using this tactic to try and leverage over a 30% increase (that’s an additional one billion dollars) from our customers for the exact same Viacom channels they receive today.” As for Viacom’s claim that 26 channels are at stake — that’s only correct if you count the SD and HD feeds of a channel separately. The deal involves 17 unique services.
PREVIOUS, 4:17 AM: This would be a huge disruption for both companies. But Viacom says in a blog post that DirecTV’s 20M subscribers could lose its 26 channels — including Nickelodeon, MTV, and Comedy Central — at midnight tonight unless there’s more progress in their talks for a new carriage deal. DirecTV says that Viacom wants a 30% boost in the payments it receives, and the satellite company is “working to keep your bill low.” But the programmer says that “our negotiations have reached an impasse” after DirecTV made a counter-proposal to Viacom “that included a lower rate than Viacom receives from any other distributor in the industry.” It adds: “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.” Viacom says that it’s the most watched programmer on DirecTV, accounting for 20% of all its viewing, but only receives 5% of its programming payments. Last month Bernstein Research’s Todd Juenger dropped his price target for the media giant saying that with the steep ratings declines at Nickelodeon and MTV, “it is no longer inconceivable that a distributor would drop Viacom, or at least engage in a public battle with them over price increases.”
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