Viacom Blocks Online Access to Full Episodes of Shows
In an effort to ramp up pressure on DirecTV over a carriage dispute that caused cable networks including MTV, Nickelodeon, and Comedy Central to go dark on the satellite service, Viacom is cutting back on the free online access to some of its top shows.
Visitors to Viacom digital properties like the The Daily Show's website first see a commercial that slams DirecTV for the "bad situation" of 26 channels gone from DirecTV's service. The websites then advise that "full episodes are currently unavailable."
Full episodes are no longer available for SpongeBob SquarePants, Jersey Shore and The Colbert Report, among others, too.
The dispute between Viacom and DirecTV comes as pay-TV distributors attempt to keep costs down, and in this particular situation, some analysts had been warning that that Viacom was in danger of facing a contentious fight with a satellite or cable provider over carriage fees due to a drop in ratings.
Nevertheless, since Viacom channels went dark on DirecTV as the result of a failure to reach an agreement, some analysts have rallied to support Viacom's cause.
"We believe DirecTV is making a critical mistake," says Richard Greenfield at BTIG Research. "While we appreciate DirecTV’s goal of maintaining robust free cash flow and an aggressive share repurchase program, we believe losing a wide array of programming valued by their subscribers could seriously harm the company."
Both companies are now taking to the Internet to showcase their willingness to negotiate.
DirecTV says it is "very willing to get a deal done" but won't pay a 30% rate increase demanded by Viacom.
Viacom put up its own statement on its blog that DirecTV last made a proposal that "was lower than anyone else pays in the industry." Viacom added that it hadn't spoken with DirecTV since 11:00 a.m. on Tuesday morning and that it was "ready to talk at any time.”
There might be another opportunity for the companies to meet face-to-face soon.
The CEOs of both Viacom and DirecTV are expected to run into each other at this week's annual Allen & Co. retreat for media and technology moguls in Sun Valley, Idaho.
"In the last seven years since we did the last DirecTV deal, we have successfully and peacefully concluded affiliate agreements with every major distributor in the U.S.," Viacom CEO Philippe Dauman told reporters there on Wednesday, according to Reuters. "We are prepared to move forward. It's unfortunate consumers for the first time are not able to enjoy our channels."
Dauman declined to say more, simply adding: "I don't want to negotiate in public."
DirecTV CEO Mike White is also expected in Sun Valley this week.
A DirecTV spokesman said he was not aware of any scheduled meetings between the two companies' CEOs. He adds that talks between the two companies continue. For DirecTV, executive vp of content strategy and development Derek Chang is leading the negotiations with Viacom.
Viacom won't say yet who is leading their team, but the company is attempting to get creative, putting out this VH1 style pop-up video...