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Negotiators spend just “10 minutes a day talking” about substantive matters says Denise Denson, Viacom Media Networks’ EVP for Content Distribution and Marketing. “I don’t see it ending any time soon.” Viacom’s 17 channels went dark for DirecTV’s 20M customers early last week. Afterward Viacom CEO Philippe Dauman offered a compromise proposal to DirecTV CEO Michael White while they were both at the Allen & Co confab in Sun Valley. “Philippe hasn’t heard personally back from Mike since,” Denson says. In her view DirecTV is dragging things out because “in the short term the programmer does feel the pressure from the loss of subscribers.” The satellite company was “bullied into this by their investors” and wants to send a signal to other programmers not to ask for big price increases. But she says that DirecTV is being disingenuous with its subscribers by urging them to hang on in the hope that a resolution could come soon. “It’s completely misleading,” she says. “It is unfair to the consumer that they don’t have the facts.” If they did, and switched to a rival pay TV provider, then “it would be very difficult for DirecTV in the long run.”
Meanwhile the facts about the negotiations remain in dispute. DirecTV says that last night it “accepted all material terms” Viacom wanted for its 17 channels. But the programmer also “insists that we carry the EPIX channel at an additional cost of more than half a billion dollars. We know our customers don’t want to pay such an extreme price for an extra channel, they simply want the ones they had returned to them.” But Viacom says that’s inaccurate. “We’ve offered packages without EPIX, packages with EPIX, and packages with significant incentives to take EPIX.”
Denson says that Viacom is making “compromises and proposals trying to get our channels back for our customers” but “I don’t think they’re engaged.” Viacom has put “probably the most aggressive (TV Everywhere) digital rights we’ve offered to anybody on the table.” The programmer also has compromised on the length of the deal: DirecTV wanted seven to 10 years and Viacom wanted far less. “We’re willing to do a deal at seven at this point,” she says.
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The problem is for those of that recently became DirecTV customers and are now under a contract. On the phone DirecTV told me it would cost $420 to quit my contract and go to another provider. I don’t understand how this is legal, but apparently it is.
What’s hard to understand? Contractual periods and penalties tied to promotional deals and pricing have been around in the industry for decades, both with sat and cable cos. And the exact same model exists with mobile phones. In your own words you entered into a “contract.” You didn’t have to — you could have called them up and taken no freebies and had no contractual commitment. I have DTV now and can leave any time because I declined their offers that came with a contract.
J, you truly speak for the .0000000001 % with your idea of what rights consumers should have.
To get a reasonable cable rate, I had to sign a contract. I thought part of that contract was getting Viacom channels. Apparently I was wrong.
Why do you get to unilaterally define what is a “reasonable cable rate”? That would be a great system for consumers – I go into a Best Buy and say I want to pay $100 for a 50” TV and you have to give it to me. Unfortunately it wouldn’t last long. And what is your basis for your self-defined “reasonable” – do you have all the facts about what the costs of their operations are, what the costs are of their content deals, what it costs them for the hardware they probably gave you for free? Without these facts, how could you possibly define what is reasonable for them and their shareholders as a for-profit company? Cable TV is not a constitutional or in any way a right. No one owes you the service, at any price, and you are free to subscribe or not subscribe at whatever deal terms you are offered.
BTW, you had choices. Pretty much everyone has at least 2 satellite companies, 1 cable company and in some cases 1-2 telco’s offering TV service in their market. The non-broadcast TV distribution market has never had so many choices. There used to be one per market. So if DTV’s non contracted deal was not reasonable, why didn’t you go to the competition? Did you get free hardware from DirecTV with your deal? Did you get free sports or premium channels for a while? All these freebies cost the company. Why do you think you should get something free but have no obligation to the contracted term that made those giveaways economically justified for the company?
But if you really feel screwed, why don’t you escalate your complaint. Offer to pay for the hardware you received, or at least the lost value if you return it used, and to pay for all the free content you got, and make your case that without the Viacom channels you aren’t getting the deal you thought you were. I bet if you go up the chain they will give in. Then feel free to go to the next competitor which will probably have similar prices or contracts.
Geez, J, who hurt you? Why such anger? Don’t you have a film critic to harass for disliking Batman?
Incidentally. I live in metropolitan LA and have exactly 2 choices for TV service, DirecTV and Time Warner Cable. I don’t have a proper site line for Dish and the teleco’s offering is actually DirecTV. I even feel lucky to have that choice, as if my building didn’t allow Satellite’s on the roof, I would be stuck with Time Warner.
@No One Of Consequence, I’m not even slightly miffed let alone angry. I’m completely content with my TV distribution situation. I’m not the one whining about how I was “forced” to sign a contract to get a bunch of free hardware and programming and now want out of it without paying for what I consumed.
No one forced you to sign a contract with them. There are lots of people who have cut the cord and aren’t paying a dime to these companies or being locked into long term contracts. You have only yourself to blame for your stupidity.
J – I think what is at issue here is they DirecTV Subscriber committed to the contract based on the ability to watch certain channels, and now, those channels are not available. Basically, DirecTV is not living up to their end of the contract, to provide said channels.
You gave the Mobile Phone contact as an example, but if I have a 2 year agreement with Verizon for 400 minutes and 2GB of data per month for $80, Verizon can’t show up one day and say my 400 minutes no longer apply to 26 area codes and my 2GB of data no longer apply to 17 websites. That would seemingly be them breaking our contract.
Hmmm, I wonder if Verizon couldn’t do somethIng like that. Those contracts have a lot of fine print.
The contracts don’t guarantee any specific channel line-up. I assume people read them before signing up to a multi-year commitment. I did before declining it.
True, but their marketing, then, is fraudulent if they include the logos for Viacom channels in their marketing materials.
I’m certain a crafty attorney, somewhere, is preparing a class action lawsuit against DrekTV for breach of contract. Granted, the contract may not guarantee specific channels/programming, but the service can and should be expected to deliver exactly what its company promises in their marketing collateral.
When I joined Directv I bought my equipment and didn’t get any sweet deal for signing up. You wanted the deal and your equipment for free thus the 2 yr contract. Do you also complain to AT&T that your smartphone you got for $200 (instead of $600) locked you into a 2yr contract.
Is there any reason why they chose $420 as the penalty fee? Is it because they’re smoking weed at DrekTV?
Lol.
So what now? Dish can smell blood and want Direct TV’s business. But wait!! They can also smell an impending law suit from all the networks. Because Dish now gives their viewers the option to HOP all of the adds. 20 million can now watch their favorite shows with out a single tampax add. Does this mean, ABC, FOX, CBS etc will remove their shows from Dish because they can’t force the viewers to watch the adds. How will they get around this. Pull some bullshit like, it’s copyright infringement
So now what? According to Neilson, the archaic and flawed monitoring system, they just reported an across the board 18 percent decline in broadcast TV. Which is why Viacom want Direct TV to pay up for the ad revenue they aren’t getting anymore. And they see the future better than all of us. And they ain’t in it! We are. Anyway, their shows are shit and no ones watching and those that are can skip the adds.
OK. Let’s take a look a European revenues. Or maybe not. Europe’s going down the toilet faster than Led Zeppelin, (I prefer the stones), no one has any money so the networks there are really feeling the squeeze. Many networks have stopped buying US scripted drama, and are now taking writers like Hank Steinberg to pen crap shows like interpol. Why? Because it’s fucking cheaper.
So where does that leave Viacom and it’s sister company CBS, not to mention every other network. It leaves them bruised, battered and with little energy to even get to the 10th round. Once upon a time they were great. They owned the keys to the control room but then Google came along. If Content is King. Google are King Kong and you can spin it anyway you want. WME? You can spend all the money you want on research that will tell you TV is still number 1 but it ain’t TV no more. It’s content. And we the viewers want Content when we want and with out any interruptions.
So Viacom. Don’t look to GPOP to pay for your shit content, we can get it for FREE through Google and they’re ain’t a damn thing you can do about it.
I guess this is another reason Viacom is looking to punish Direct TV viewers by asking for a Billion dollars etc. Maybe Sumner like Moonves neads a new more up to date cinema attached to his home.
We’re begging for ‘a la carte’; this sort of nonsense will bring it much sooner.
Actually, no it won’t It will make it harder to get Ala Carte. If the networks demand that providers carry the crap channels like Nick Kids, Nick Baby, Nick Womb, Nick Gleam in your fathers eye, then they will have to recoup that money somehow and if no one wants those channels in Ala Carte then you will either pay what you do now(for less channels) or maybe more to help subsidize those crap channels.
Unforrtunately, you signed a contract that said you would remain a dtv subscriber for two years or pay an early termination fee, in exchange for subsidized hardware (sat boxes/dvrs) that are lease equipment and cost around 600 to 800 a piece to buy.
You had the option (though its never mentioned and they may have changed it) to outright buy the equipment up front, but its very expensive.
Same model is used for subsidized cellphones, though they are owned equipment and not leased like DTV hardware.
Notice to Viacom, there is a reason most of us use DirctTV. It is the best provider in our area. Our cable company is out leaving our TV screens blank way too often. Dish does not supply our local channels nor do they provide enough HD. We do miss Spongebob and especially Max and Ruby. It’s too bad all the greed involved. Epix, what is that? We’ve been with DirectTV for years now and have the top package offered. I don’t recall an Epix being part of it. Why would I have to pay even more for it. I have plenty of movie channels. Is Viacom’s Epix really the reason we live without Max and Ruby, SpongeBob and Patrick? My toddlers do miss them. Thank goodness for DVD. Dish just went through a similar dispute but not with Viacom. I’m sure when their contract expires Viacom will do the same to Dish …shameful….
I have a 5 year old and a 2 year old at home and we haven’t lost a thing with the Viacom blackout. We pay $7.95 a month for Netflix and have all the SpongeBob and Max and Rudy they could ever watch.
Totally saved a nightmare in the making with this blackout.
totally agree Netflix will satisfy any of the Nick shows we are missing. Now if this had happened during Legend of Korra I would probably just bit torrent the show and not worry. really 16 channels are black on Directv and I can’t say I miss any of them.
The days of ‘I want my MTV’ are long gone and there has never been (or will be) a clamoring for wanting TV Land, Nick, or VH1. And Epix? Really??? Stay strong DirecTV! Viacom will eventually come to their senses.
Seems like Viacom overplayed their hand.
Viacom is delusional if they believe what they are saying. Very few customers are going to switch providers over this, even if it doesn’t drag out. They are drastically over-estimating the appeal of their channels and customer loyalty to them. Especially when you can view their most popular programs through other methods. The longer this drags out, the more it will hurt Viacom’s channel ratings and eventually advertising dollars. Hold out DirecTV, we’re with you…
J is obviously not a troll for DirecTV.
How do you figure?
J…….
Hahahahaha
It is so incredibly obvious you are a shill/employee of DirecTV.
Don’t be so obvious.
DirecTV is screwing their customers by not giving them a discount. Viacom is even worse.
New wrinkle in this debate with the EPIX angle. I would LOVE to get EPIX as an option on my DirecTV. Can anyone else who has it on they system tell me if it is like HBO, where it is one of the pay channels you get by specifically ordering it, or if it is more like the Encore channels, where it is a part of a high tiered packages? Also, is it a channel package, or just the one?
If it is like HBO, I don’t see why DirecTV couldn’t carry it as an option for those customers willing to pay more to get it. If it is a channel that would be linked to a package/tier and hence drive up the cost on pre-existing packages, I completely get why DirecTV might choose to turn it away.
On Dish, it is part of a movie package along with HDNet Movies, Sony Movie Channel, Retroplex, etc.
Seems like a good time for another content provider(s) to ramp up and fill the holes that Viacom has self inflicted upon itself. So that when Viacom comes back, maybe, they will find themselves even more marginalized. Yeah, let’s pay big bucks to watch re-runs of 60s and 70s sit coms and dramas. I didn’t like many of them the first run through and time has not improved them, not one bit.
Someone else already posted this but I’ll chime in. No sane person who’s tried DISH or cable is going to switch from the best provider to one of the so-so ones over Nick and TVland or MTV. Working with DTV customer service and getting it installed can be a nightmare, but once installed what they offer is rock solid stable and much more of it, too.
Viacom is delusional if they actually believe the words that are coming out of their mouths. I am more inclined to believe that Denise Denson and Phillipe Dauman are out and out liars trying to deceive the public and their investors.
Apparently you must be another “troll” for DirecTV Beej, but join the club…
My 20 year old son has been urging me to give up Directv. Why pay $90 for basic cable? You can watch it all online and on Netflix for $8 a month. All this mess is tipping the scale in his favor.
I’ve been very happy with my switch from Dish to Directv. Epix1 and Epix2 aren’t bad channels to add. The majority of the Viacom offerings is rather weak. I only occasionally watch MTV and Vh1. I don’t watch Nickelodeon, Comedy Central, BET or any of their non HD offerings.
Epix is a movie channel that as many hit titles. Also Epix is a streaming service as well. The streaming service would be the best part because it had great movies on its service including Capatian America, Iron Man 2, and getting more top movies every week!! I personally on care about the streaming which to me is worth $25 (DirectTV would have to charge each customer about $25 more)
Directv is right in this dispute. You wouldn’t ask your boss for a raise if your productivity suddenly dropped like Viacoms ratings, you would just be happy to still have your job. That being said, Directv has very deceptive business practices and they give you a heart ranking to determine your value to them. Also on the hardware issue. Directv SELLS you leased hardware then makes you pay a lease fee, pretty fricking tricky. Think about this, their hardware is required to run THEIR IR SERVICE. Most cable companies at least have the decency to install their equipment for free. I hope that both Directv and Viacom lose as neither one of them have any sense letting this occur.
I for one and loving this dispute. More channels that are taken off, the more I get in refunds, free channels and perks.
Sounds like most of you are not milking this for all that you can. Just a simple call last week to complain and threaten the idea of walking got me NFL Sunday ticket, free months of pay channels, rebates, no charge on leasing the receivers etc.
Use this to your advantage.
Whoever does what, if there are “new” channels to replace ViaCON’s line-up, if there is an HD feed, we better damn well get it! Looking at you EPIX. Oh yeah, why not get the HD feed of fuse for us in the mean time. Least DirecTV could do. I think.
I’m on cable and refuse to get EPIX on principle as it was only created as a temper tantrum move by Viacom after both the CBS breakup where Showtime refused to pay more than they had to for Paramount’s films. EPIX thought they could beat Showtime and make it cower, but it’s done nothing while Showtime continues to roll on with more worthy films from other suppliers. Also, it took them forever to even launch an HD feed on my system; having a movie channel in 480i is laughable in this age, and I’m not paying $10 for substandard films and MMA that would be better off for free on This TV.
DirecTV should hold their line as long as they can. Nobody asked for EPIX except for Sumner Redstone and his cronies, and the world hasn’t collapsed because people are missing “World’s Worst Tenants” and a country music channel which is as country as IKEA’s Swedish stores.
Loving the blackout. Cuttiing my daughter’s access to Dora is a blessing. Thanks Directv. Hold the line. Their content isn’t worth a fee hike. In fact I’d be happy without their channels In exchange for a discounted monthly bill.
What is it with Viacom? Not content with pouring legal fees into a big hole marked “Pointless Litigation against YouTube”, now they’ve found another contractual battle to fight and lose. Mike Fricklas has been General Counsel there for a good long while… Time for a change?
Viacom your programming is crap. The only channel we had on was Nick Jr because we have a grandson who like a few shows. It’s not worth the extra money. I’ll take him to the park and he will enjoy the outdoors more. I”m all for Capitolisim but what Viacom is asking for is excessive in particularly in this economic climate. I’d rather do without TV and put food on the table.
Viacom you suck toilet water!
I honestly don’t miss the Viacom channels. I’m enjoying the Free Encore channels that Directv is giving me more. I don’t think Viacom is worth more money. They can keep their channels.