Any agreement reached between Viacom and DirecTV following a blackout...
Any agreement reached between Viacom and DirecTV following a blackout of 26 channels that started last week will likely be closer to the programmer’s ask than the distributor’s bid, said Bernstein Research analyst Craig Moffett. Generally, “programmers hold the cards,”…
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he said in a research note. “Substitutes for programming, on the other hand, are imperfect at best.” However, available viewing substitutes, the addition of the Disney Junior channel to DirecTV’s lineup and other factors, “combined with ratings weakness at most of the Viacom networks, have seemingly strengthened DirecTV’s resolve,” he said. “Viacom’s online withdrawal has alienated many of their own would-be online viewers.” Worse, Viacom “self-evidently bolstered DirecTV’s argument that the very availability of that programming undermines Viacom’s traditional pay-TV value proposition (or else why would they have had to pull it?),” he said. If the pay-TV programmer grants a meaningful bundle of digital rights to DirecTV “then Viacom will likely be able to achieve a high enough revenue growth rate to save face,” he said. DirecTV subscribers lost channels like Nickelodeon, MTV and Comedy Central after the companies couldn’t reach a new deal (CD July 12 p10) . Viacom also blocked access to streaming content from these networks (CD July 13 p12). In a blog post Monday, DirecTV said it’s getting closer to a long-term agreement with Viacom to resume carrying the dropped channels. “Rest assured, this situation is temporary and the channels will return,” the post said. The DBS company directed customers to Hulu.com to view episodes of the lost programming. Viacom’s action is a “temporary and regrettable tactic” to force customers to pay substantially more for its networks, DirecTV CEO Mike White said in a video address to customers on www.directvpromise.com. Viacom didn’t respond to a request for comment.