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Dispute Between Viacom, DirecTV Leaves Customers In The Dark

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(Source: DirecTV)

(Source: DirecTV)

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I-Team

MIAMI (CBSMiami) – “I want my MTV!”

Too bad, says Viacom and DirecTV.

It is one of many recent disputes over how much service providers (like DirecTV) should pay content providers (like Viacom) for carrying their channels.

According to a Sun-Sentinel report, the two companies failed to agree on a new contract to replace their seven-year contract, which expired at midnight Tuesday.

The result: DirecTV’s 20 million customers are without Nickelodeon, MTV, VH1, Comedy Central and 13 other channels.

DirecTV said its executives approached Viacom with a new proposal and a request to continue broadcasting the channels as talks proceeded.

Viacom did not respond to DirecTV’s requests before the Tuesday midnight deadline.

In a blog post on Viacom’s website, spokesman Mark Jafar wrote that despite Viacom’s “best efforts,” DirecTV rejected proposals to renew their contract.

Viacom CEO Philippe Dauman defended his company’s actions at an Idaho media and technology conference Wednesday morning.

“Since we did the last DirecTV deal, we have successfully and peacefully concluded affiliate agreements with every major distributor in the U.S.,” said Dauman.

DirecTV said Viacom’s low ratings do not justify the higher cost.

“Viacom is pushing DirecTV customers to pay more than a 30 percent increase, which equates to an extra $1 billion, despite the fact that the ratings for many of their main networks have plummeted,” DirecTV Executive Vice President Derek Change said in a statement.

As of Wednesday morning, no timetable has been set for negotiations to resume. So, is there any way to know when DirecTV customers will get back their channels?

If history is any indication, you should not be waiting long: In 2004, Dish Network dropped some Viacom networks after the two sides failed to agree on a new deal. The blackout lasted less than 48 hours. A similar dispute in 2010 between Cablevision and ABC dragged on for several hours, forcing customers to miss The Oscars.

You are familiar with buying channel “bundles”, a strategy used by companies like DirecTV. Bundles give you more channels for paying more money. This forces distributors to carry lower-rated networks such as Nick Jr along with more popular channels such as MTV.

Bundles might soon be a thing of the past, thanks to “unbundling”.

This new option would allow customers to choose only the channels they want to watch. Because the purchasing of television programs is the single greatest cost for distributors like DirecTV, it might soon be an option.

Full disclosure: Viacom and CBS (which owns CBS4) share a corporate relationship.

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