Business and Deals

Viacom Says DirecTV May Drop 26 Channels

Distribution agreement set to expire at midnight 7/10/2012 08:36:48 AM Eastern

"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
.

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