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Viacom on Tuesday began warning Dish Network customers that its channels — including Comedy Central, MTV, Nickelodeon and TV Land — could disappear in a day or so if the conglomerate and the provider of satellite TV services can’t agree to new terms for carriage.
The threat of Viacom losing Dish’s roughly 13.9 million subscribers sent its stock into a tailspin Tuesday, down 8 percent in midday trading. Shares of Dish, on the other hand, were climbing 2 percent, suggesting that Wall Street anticipates the feud will be settled in favor of Dish.
Tuesday’s warning to Dish consumers came by way of a crawl visible at the bottom of the screen when watching Viacom’s channels.
Dish has a history of hardball tactics that include dropping channels — AMC and Fox News, among others — rather than paying rates they deem overly inflated, and Viacom has seized on that reputation in the statement it issued to the press on Tuesday.
“We are extremely disappointed that Dish has not engaged in a serious way to reach an agreement for Viacom’s No. 1 family of cable networks,” Viacom said.
“This is par for the course for Dish, which has deliberately derailed 10 renewal negotiations since last year by engaging in unproductive discussions and contentious public battles.”
Dish and other providers face challenges from digital streaming services like Amazon and Hulu, as do the cable channels, necessitating that both sides squeeze as much from every deal as possible to keep their businesses growing.
“In addition to depriving our fans of our networks and programming, Dish is further undermining their fundamentally disadvantaged business by driving their subscribers to switch to another provider,” Viacom said Tuesday.
Dish’s agreement with Viacom had been set to expire two months ago, though the parties agreed to an extension, which expires Wednesday night.
Dish, which reports quarterly earnings on Wednesday, also issued a statement to the press.
“We regret that Viacom has chosen to involve customers in a business negotiation when time remains to reach an agreement,” the company said. “Viacom unilaterally elected to terminate an indefinite contract extension tomorrow night despite meaningful progress on a new agreement that confronts a rapidly evolving pay-TV environment.
“Viacom is asking for hundreds of millions of dollars in increases, despite the challenging landscape that includes drastically reduced viewership of Viacom channels and wide availability of their content across multiple platforms, frustrating consumers who don’t want to pay twice for the same content.”
The Viacom-Dish squabble has been ongoing. In August, for example, Bernstein Research analyst Todd Juenger wrote: “If Dish renews, Viacom stock will go up. If Dish does not renew, Viacom stock will go down (a lot).”
Juenger’s price target on Viacom stock at that time was $51 a share with a Dish renewal or $28 without one. On Tuesday, Viacom shares were just shy of $36.
Juenger estimates that if Dish pays Viacom $3 a month for access to its channels and if less than 10 percent of Dish’s customers drop their service due to the feud, it’s a win for Dish.
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