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Wednesday, July 11, 2012

Biggest TV Fail Ever: DirecTV suspends all Viacom channels!

While no winner has been determined in a contract dispute between two highly profitable TV giants, the loser has become crystal clear: the customer.

DirecTV and Viacom swapped verbal jabs Tuesday, attempting to explain why the other was at fault for the lack of a new deal. Since midnight Wednesday, Nickelodeon, BET, Comedy Central, MTV and other channels have been blacked out for about 20 million people.

Viacom got its message to the masses in multiple blogs and online statements. DirecTV has its own five-point scrolling online release.

How many channels were cut off exactly? Depends who you ask.

According to Viacom, the satellite TV provider did "the unthinkable" and dropped 26 channels. DirecTV responded it was really only 17, unless you count standard-def and HD versions of the same networks.

The discrepancies continued right down to the dollar amount causing the rift. DirecTV announced the largest cable-TV operator wanted a 30 percent increase – more than $1 billion – over its previous deal.

Viacom stated it "proposed a fair deal that amounted to an increase of only a couple pennies per day, per subscriber." Using the number of 20 million subscribers Viacom mentioned, a 2-cent increase would result in an annual jump of $146 million.

That difference may be attributed to DirecTV using the total amount for a multi-year contract term – the largest number they could truthfully throw out there. Viacom chose to break it down to "pennies per day" – the smallest amount they could use.

The cable channel operator described its previous seven-year agreement with DirecTV as "ancient" and stated its new offer was as good as, if not better than, the deals it has with other providers.

DirecTV pointed out Viacom channels had been losing viewers of late, thanks to many of their most popular shows being available in free online formats, or through pay sites, like Netflix.

In its statement, DirecTV provided a menu of several helpful links to find Viacom shows viewers are missing during the blackout.

Among its other arguments, Viacom countered DirecTV's "defend our customers" message, by pointing out the satellite TV provider could absorb the increase and not pass it along to customers. It stated DirecTV had increased rates 4 percent in January, and was on its way to $5 billion in profits for the year.

According to MarketWatch, DirecTV had $1.31 billion in operating profit in the first quarter of its fiscal year.

But by that measure, Viacom "does not need to pass an increase of a couple pennies a day" to its customers either. The company had an operating profit spike in its most recent quarter, with $893 million from its TV networks business alone, according to The Hollywood Reporter.

Both companies expressed their commitment to getting a deal worked out in the near future.

DirecTV and Viacom can both be followed on Twitter for updates, and customers can contact DirecTV by calling 1-800-531-5000 or the Viacom website


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1 comment:

  1. This is.ridiculous. I am a victimized customer.of this foolishness. I don't even watch much tv or many channels, but they took the ones i do watch AND they took Nickelodeon from the kids. it's a crying shame!!! I bet we won't get a decrease in our bill either for the loss of channels!!!


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