In renewing its deal to distribute the cable channels from MTV Networks, No. 1 MSO Comcast also agreed to carry the digital multicast signals of sibling Viacom divisions CBS and UPN.
The wide-ranging deal ensures that whatever multicast and high-definition programming CBS and UPN owned-and-operated stations launch will be carried to Comcast subscribers in their respective markets. Comcast will pick up CBS's HD feed immediately, but the CBS stations' multicast package, plus digital signals of HD-free UPN, will be picked up some time later.
That's a significant development for broadcast digital multicasting, which has been gaining traction in the last months of the year. The carriage of digital broadcast signals is a red-hot issue in Washington, as cable and broadcasters lobby regulators over whether operators will carry all of a broadcaster's programming. Many broadcasters are lobbying to force cable carriage of all their digital product, not just HD programming but any other channels they conjure up. Cable operators, in turn, are resisting full digital must-carry, in part out of fear that many independent stations will stuff digital channels with infomercials and paid TV preachers.
In the new deal, Viacom will also allow Comcast same-day access to the CBS Evening News, The Early Show
and newsmagazine 48 Hours
plus stations' local newscasts for Comcast video-on-demand services.
Viacom declined Comcast's push for VOD repeats of CBS's 60 Minutes
and 60 Minutes II. And the VOD news product will be available only in Comcast markets where CBS has an O&O station, such as New York, Chicago, San Francisco, Philadelphia, Boston, Detroit and Miami.
"Unlike other networks," said one Viacom executive, "we respect our affiliates' exclusivity."
Other elements of the deal include a steady, though not fat, increase in MTV Networks' license fees; Comcast's launch of digital networks Nicktoons and MTV Hits; and increased carriage of MTV2, Nickelodeon GAS, VH1 Classic and VH1 Country.
Since Comcast tripled in size by acquiring AT&T Broadband last year, one of its top priorities has been to squeeze programmers, first by cutting license fees and then by holding their rate of growth lower than the 15%-20% some channels are seeking annually. At the same time, Comcast wants better content for HD tiers and VOD, seeing such services as a great weapon against capacity-pinched DBS rivals.
Neither Viacom nor Comcast would detail the fees or the rate of increase, but analysts estimate that they will grow around 8% annually.
Comcast's MTV deals don't expire for a couple of years, so there was no particular time pressure to sign a deal. But MTV Networks President Mark Rosenthal said he's gratified to secure a long-term deal and boost distribution for some of his networks. While both sides are known as tough negotiators, the discussions were far less hostile that those between, say, Fox Sports and Cox Communications or ESPN and just about any distributor.
"We've had a fantastic partnership with Comcast for a long time," Rosenthal said. "This is really the extension of that partnership."