Viacom Says DirecTV May Drop 26 Channels

Distribution agreement set to expire at midnight

By Jon Lafayette -- Broadcasting & Cable, 7/10/2012 8:36:48 AM

"As recently as today, we made significant economic movement in direct conversations with DirecTV," Viacom said in a blog post. "However, despite our best efforts, DirecTV has rejected all of our proposals to renew our agreement. This evening, DirecTV provided Viacom with a counter proposal that included a lower rate than Viacom receives from any other distributor in the industry. With this offer, our negotiations have reached an impasse."

Viacom said its agreement with DirecTV was seven years old and that it calls for below market rates for the Viacom networks, which account for 20% of all viewing on DirecTV but receive less than 5% of DirecTV's programming spending.

On its website, DirecTV said it has "absolutely no intention of removing your favorite Viacom networks...but unfortunately Viacom executives 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."

DirecTV said it asked Viacom to allow DirecTV to keep the channels up while negotiations continue and that Viacom is seeing a 30% rate increase that would cost customers $1 billion.

DirecTV urged customers to "ask Viacom to do the right thing and give DirecTV the permission to keep these channels on while we continue to negotiate. We will also ask Viacom to keep making these networks available during any of our private business discussion."

Here's Viacom's statement regarding DirecTV:

As of midnight on Tuesday, July 10, DirecTV will drop 26 Viacom channels, including Nickelodeon, MTV, Comedy Central, BET, VH1, CMT, Spike TV, TV Land and more. Viacom is the most watched programmer on DirecTV. Nickelodeon is the most watched cable network on DirecTV. We regret that DirecTV refuses to consider a fair deal that recognizes the value of Viacom programming. We urge DirecTV customers to call 800-531-5000 or visit www.whendirectvdrops.comand demand that DirecTV put its customers first, and keep Nickelodeon, MTV, Comedy Central, BET and all of Viacom's channels.

Here are some indisputable facts about Viacom and the strength of its networks on DirecTV:

Viacom accounts for 20% of all viewing on DirecTV -- more than any other programmer and above the national average for all distributors.1 Yet Viacom currently accounts for less than 5% of DirecTV's programming expenses. 2

Nickelodeon is the #1 most-watched cable network on DirecTV. 1

Kids in DirecTV homes spend 50% of their viewing time watching Nickelodeon networks. 1

Over the past three years, Viacom has completed nearly a dozen significant distribution renewal agreements privately and without disruption to consumers.

And here are some indisputable facts about DirecTV:

Over the past three years, DirecTV has fought publicly over carriage agreements with seven different programmers - Fox, Tribune, Diversified Communications, Northwest Broadcasting, Sunbeam, Belo, G4, Versus, and YES Networks - and dropped five of them.

DirecTV is on track to deliver $5 billion in profit in 2012.3

Over the seven year life of our expiring deal, DirecTV doubled its worldwide revenue, tripled its profits and increased its subscriber base by more than 32%.3

Needless to say, Viacom will continue to work to convince DirecTV to keep our channels, and strike a fair and equitable agreement. Check this space for updates on the situation.

For more information, you can visit the website Viacom has set up to notify consumers of DirecTV's decision to drop its channels at www.whendirectvdrops.comor on Facebook www.facebook.com/WhenDirecTVDrops.

Also, we'll continue to make the spots we're airing to notify customers of DirecTV's decision available on our Vimeo page.