Monday, October 16, 2017

Viacom And Charter Agree To Short-Term Extension Of Carriage Negotiations

Viacom Inc. and Charter Communications have agreed to a “short-term” extension of their carriage negotiations while the two sides continue to negotiate terms of renewal to a deal that will enable some 16.6 million customers to keep watching Viacom’s cable networks, including Nickelodeon, Nick Jr., Nicktoons, MTV, and Comedy Central.


The existing long-term deal was due to expire Sunday, October 15, and had spurred a dispute between Viacom and Charter.

As early as last Wednesday (October 11), Viacom had warned that it was unable to reach a deal with Charter. The media company began running ads on Nickelodeon, MTV, Comedy Central and BET, featuring talent for each network warning viewers of the possible disruption in service and urging them to call Spectrum, and crawls at the bottom of the screen on some networks, urging viewers to pressure Charter to keep Viacom. It also launched a website, called keepviacom.com, and enlisted celebrities like Trevor Noah, host of The Daily Show on its Comedy Central, to tweet about the situation.

Meanwhile, Charter launched a microsite, suggesting that Viacom is overpaid. The site reportedly said that Viacom’s “business is suffering and they are trying to boost their bottom line at the expense of you, our customer,” and that the company “has been overpaid for their channels over the recent year.” A Charter spokesperson could not be reached for immediate comment.


Following reports that the two sides continued talks Sunday night beyond the 7 pm deadline, a spokesman from Viacom issued a short statement explaining “Viacom has agreed to a short term extension of our renewal deadline with Charter while we work to reach a mutually beneficial deal.” The extension has succeeded in avoiding an immediate blackout of Viacom networks for Charter subscribers.

Without a deal, both sides stand to lose. Charter’s 16.6 million subscribers would lose access to Viacom’s networks, including Nickelodeon, Comedy Central, and MTV. Meanwhile, Viacom could lose $760 million or 16% of its annual affiliate revenue, reports Reuters.

The impasse follows a recent dispute between Disney and Altice, which acquired Cablevision and now operates the Optimum cable service. Those parties had clashed primarily over sports rights, whereas the issue with Charter and Viacom is the decision last spring by Charter to remove bedrock Viacom channels like MTV, Nickelodeon and Comedy Central from basic service on Spectrum and put them on a higher-priced tier. Along with that move, it rolled out a skinny bundle that features no sports -and no Viacom. Bob Bakish, who became Viacom CEO in 2016, has publicly admonished Charter for the moves, which comes as he sets a new overall strategic course for the company.

Charter acquired Time Warner Cable in 2016 to become the No. 2 U.S. cable operator.

Both sides are under pressure from cord-cutting, or dropping of pay television, as audiences flock to cheaper streaming services that have emerged in the past decade.

The stalemate in negotiations stem from Charter's decision last spring to remove bedrock Viacom channels like Nickelodeon, MTV and Comedy Central from basic service on Spectrum and put them on a higher-priced tier. Along with that move, it rolled out a skinny bundle that features no sports -and no Viacom. Bob Bakish, who became Viacom CEO in 2016, has publicly admonished Charter for the moves, which comes as he sets a new overall strategic course for the company.

Sources: Variety, Fortune, Deadline, Reuters, Multichannel, C21Media.
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