DirecTV, Viacom End Bitter Programming Squabble, Reach Long Term Agreement

Paul Lilly

Satellite TV provider DirecTV and Viacom have finally reached a long term agreement to restore 17 channels to DirecTV customers, ending a bitter dispute that neither side could afford to let drag on. Be that as it may, the disagreement over financial terms of a contract renewal went on longer than it should have, resulting in a blackout of popular channels like Comedy Central, MTV, BET, Spike, CMT, and TV Land, along with ten others, while customers were used as pawns in contract negotiations.

Things turned ugly when the previous programming agreement between Viacom and DirecTV expired. DirecTV claimed Viacom was trying to force feed additional channels into a renewed agreement and charge a 30 percent premium for doing so, which the satellite TV provider said amounted to $1 billion over five years. Viacom countered that it was only seeking fair compensation in a new deal, one that would amount to DirecTV absorbing a couple of pennies per day per subscriber.

Contract negotiations happen all the time, only usually they're handled behind the scenes and customers never know about them. In this case, the failure of the two sides to hammer out a new deal in a timely fashion resulted in Viacom pulling 17 channels from DirecTV's programming. Even worse is the way both sides used satellite TV subscribers as pawns in their dispute. DirecTV encouraged subscribers to view Viacom content online where the programming is free, and Viacom responded by yanking online content and telling subscribers to ditch DirecTV and find another provider.

With the new agreement in place, all that bickering is in the past, but bitter feelings remain.

"It’s unfortunate that Viacom took the channels away from customers to try to gain leverage, but in the end, it’s clear our customers recognized that tactic for what it was," said Derek Chang , executive vice president of Content Strategy and Development for DirecTV. "The attention surrounding this unnecessary and ill-advised blackout by Viacom has accomplished one key thing: it serves notice to all media companies that bullying TV providers and their customers with blackouts won’t get them a better deal. It’s high time programmers ended these anti-consumer blackouts once and for all and prove our industry is about enabling people to connect to their favorite programs rather than denying them access."

Viacom's short announcement was without vitriol, stating simply that it's "extremely pleased to bring its programming to DirecTV subscribers, and thanks everyone affected by the disruption for their patience and understanding during this challenging period."

In addition to restoring Viacom channels, DirecTV subscribers now have the ability to view Viacom programming on tablets, laptops, handhelds, and other personal devices via the DirecTV Everywhere platform, DirectTV said. Financial terms of the new deal were not disclosed.

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