Viacom, DirecTV talks fail; 26 channels go dark

Viacom, DirecTV talks fail; 26 channels go dark

Summary: Negotiations between Viacom and DirecTV have failed, forcing 26 channels off DirecTV's airwaves and leaving its customers to pay a 30 percent price hike if they want reconnected service.

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Overnight, Viacom pulled the plug on 26 DirecTV television channels --- including MTV, Comedy Central, and Nickelodeon --- leaving millions of customers without content they had originally signed up for.

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DirecTV claimed Viacom was looking for a 30 percent bump in royalties for DirecTV to renew its subscriptions --- around $1 billion in total --- but DirecTV claimed this was too high. Viacom cut off much of DirecTV's service just before midnight on Wednesday.

Viacom and DirecTV were playing with fire and blamed one another for the failure to renew the contract, but ultimately only the customers got burned.

In the past few weeks, DirecTV took to the Web to promote its "DirecTV Promise" calling the rate increase "unreasonable" and "exorbitant," and pinned the blame entirely on how Viacom "decided to take away channels from [DirecTV's] customers" to force the customer to pay "substantially more."

Viacom hit back with its "When DirecTV Drops" campaign along with several blog posts explaining how DirecTV "dropped Viacom’s channels before our midnight deadline." 

Meanwhile, programme makers and channel owners have hit back mostly at DirecTV for the loss of service. 

Viacom said it had "proposed a fair deal that amounted to an increase of only a couple pennies per day, per subscriber," and that "DirecTV refused to engage in meaningful conversation."

DirecTV reiterated its 30 percent increase stance and noted how "Viacom took these channels away from DIRECTV viewers." The company added that Viacom had "knowingly put our customers in the unreasonable position of either accepting their extravagant financial demands."

"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," said Derek Chang, DirecTV executive vice president of content. 

DirecTV, which has around 20 million U.S. subscribers, said it will continue to work "diligently" on a new agreement."

Image credit: Twitter.

Topics: Censorship, Consumerization

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47 comments
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  • Blame DirecTV

    I as a consumer will have to put the blame on DirecTV. As I recall, I make a payment for TV to DirecTV, not viacom! DirecTv work it out or be ready to refund me for not getting channels that I'm paying for.
    leonardtech46@...
    • good luck

      you pay direct tv for a service. you dont pay for channels. you dont pay more when they add channels. you dont pay less when the remove channels. nice try though.
      aldaistan
      • Interesting.

        I wonder what would happen if DirecTV removed all of their channels.

        How many inactive consumer lackeys would stand up and attempt to dissuade active consumers from voicing their displeasure? Because, after all, you pay DirecTV for a service...not channels. Just grin and bear it, right?
        angryjeff
        • Pass it on

          Would you be willing to pay extra if Direct TV passes the new costs to the consumers, or do you expect DirectTV to eat the new costs?
          Cable has no problem raising rates. My cable company raised rates twice in 1 year, thus making me a DirectTV subscriber.
          ws6daveg
          • Go DirecTV

            I actually only watch Nickelodeon (Spongebob), MTV (when they renewed B&B), and Comedy Central (except Jon stewart and Stephen Wannabejonstewart - they are terrible). Anyway, FINALLY a business stands up for me, the bill payer, to keep costs low. Viacom is headquarted in France which just passed record taxes on them and their ratings have been nose-diving. They are like the sports team that wants a new stadium for coming in last place. Bye bye Viacom, please let the door hit you several times on the way out. :)
            Pervis Nelson III
          • Sooo....

            So you would rather watch a mind numbingly idiotic show like Spongebob or anything from MTV but not witty and informative shows like The Daily Show or Colbert Report? Says a lot. Must be a conservative their humor is aimed at.
            Michael Rivera
          • Right...

            What about all the people with children who enjoy the show? I'd rather watch Spongebob than some biased comedy central news show.
            Michael Kruck
          • wat

            sooo Viacom is based out of New York, I dont know what you are talking about. also, Viacom has been know to do this kind of thing before and it really is just a scare tactic. what we are seeing here is just another casualty in the slow decline of traditional television entertainment. think of tv channels and tv service like people view the newspaper now a days. its all going digital baby.
            Wayne Wolfe
          • Haha

            "I ONLY WATCH THE CHANNELS THAT ARE GOING AWAY... I'M GLAD THOSE CHANNELS ARE GOING AWAY."

            Anyways, if you really think DirecTV gives a shit about their customers (other than their wallets), then you are dumb. They opposed this because it would cost them money. DirecTV uses third party companies for their customer service and from experience, it's total shit. I use to work for one of those companies and I've seen first hand just how shady DirecTV is. They intentionally write up their contracts in hopes that someone will mess up and end up having to pay out the ass for it.

            One such example: If you don't have a phone line hooked to your box (which most people do not), then any PPV that you get will be stored on the box itself instead of transmitting to DTV to be processed for payment. This means you will not even KNOW if PPV has been purchased until after you turn your box back in. I've seen people have over $2000 racked up in PPV charges after they turn their box in and some of them didn't even purchase them themselves. I once had an old lady CRYING on the phone with me because of this. She lived alone, her grandson would come to visit on the weekends and she had a massive bill of nothing but Adult PPV's.

            TLDR; the above poster is an idiot and DirecTV is a scumbag company.
            somethingstuff
          • none

            I don't know what company you claim you worked for but Direct tv don't even let you order ppv from the box without a phone line connected. You have to call them to receive the ppv shows. So make sure you know what your talking about before you speak
            Jamie Shermeyer
          • Correction

            While I can agree that I don't like of the policies that they have, you are hugely exaggerating, or at least using outdated information. I work technical support now, and the receivers all have 2 fail safes to prevent what you're describing. 1) They have limits built into them for the total amount the card can store before it reports in via telephone line or internet connection, which I've seen ranged from 99 to 200 dollars, tops. 2) Without a telephone line or internet connection, the receivers will go for 60 days and allow you to make PPV purchases, after that, it will prevent any purchases until it had the opportunity to make that connection to their system.
            blackgalai
          • The problem is...

            that anyone with a brain can compare and see that DirecTV is a greedy bunch. DISH Network has comparable plans for less money and doesn't nickel and dime you to death in the way DirecTV does - as I say this I am a Verizon customer, only due to FiOS, because you can't fight 35/35 Mb speeds! And for that Verizon leaves all satellite providers in the dust.
            chrome_slinky@...
      • Here's a better try

        I'm very familiar with Directv business model as we are a Directv dealer. What you're not understanding "good luck" is that Directv and Dish both offer 1 and 2 year price guarantees when you sign their contract. The price guarantees are attached to whatever package you choose and packages consist of channels. Therefore, Directv takes a gamble every time they offer a price guarantee to someone across a 2 year stretch. Reasoning being is that when these negotiations come up, if Directv has to accept the price agreement blindly from Viacom, they would lose quit a bit of money. Like right now to the tune of $1 billion.

        The bottom line is that Directv and Dish both shouldn't offer price guarantees because when channel providers try to renegotiate, things like this happen--blackouts.

        I'm sure in the fine print Directv puts that they don't have to give a credit when they don't give you your channels but bottom line-- they project the idea that you're guaranteed to have the channels for the duration of your contract and that's all that really matters.

        Comcast and other cable companies don't have contracts in the same way so they just accept content negotiation more readily. On the flip side, that's their main problem and that's why Dish and Directv both knock the cable companies for increasing rate constantly.
        Ian Franklin
        • This does not make sense

          So, you are saying that if say, Viacom said they wanted to charge per year 500% of DirecTV's entire annual revenue then DirecTV would just have to "accept it blindly?" Umm, please clarify because I am sure DirecTV is not writing up that agreement.
          Pervis Nelson III
          • Are you listening?????

            Yes, that's exactly what he said. Don't be so brick headed.
            Narg
        • Incorrect

          Cable companies have the exact same types of contracts with content producers. To say they don't is to outright lie. All cable/satellite companies go through contract negotiations, they just rarely result in blackouts.

          That said, blackouts aren't unprecedented:
          http://money.cnn.com/2009/12/24/news/companies/fox_time_warner_cable/

          The difference is that, in general, cable companies eat the price hikes and have no problem passing them onto the consumer since potential for rate changes are right in the consumer contract. Satellite companies who compete on price over service can't afford to do the same... so they hit the news more often.
          beau parisi
          • No, they don't.

            Cable companies are more forgiving because they don't offer long term price gaurantees. Didn't you read his post?!?!?
            Narg
        • good luck

          "I'm sure in the fine print Directv puts that they don't have to give a credit when they don't give you your channels but bottom line"

          thats what im saying.

          if they do give credit it will be the cost of the package divided the amount of channels and then give you that amount X each day youve paid for it but dont get it= not much to actually give a sh*t about. it's not enough of a service loss to allow you out of contract.

          yes, you can rally around others with your internet voice. of course. it is very effective. i do it all the time.

          im just saying. the content providers on this level have a lot of power. this whole thing could just be two top level dicks not agreeing. what people should be doing is looking for alternatives to these guys. its hard. it might be illegal. you might not have the choice. etc

          to me this is just another FWP. "I paid for a whole month but now i cant watch 16 and pregnant"
          aldaistan
      • nice try.....really!!!!!!!!!!

        Nice try my ass. look you dummy when we pay for directv i am sure most people are paying to have certain channels. And to be honest those channels that are taken away are channels that all customers watch so if they dont get them back then hell yeah they should do some type of refund or credit to our accounts. I watch damn near all of those channels everyday so they need to fix it!!!!
        Mrmacmaine Mckenzie
        • Please

          Get off your ass and quit sitting around watching all those channels!
          twhitt