Viacom Could Pull MTV Off Time Warner Cable

I was actually watching television while blogging and saw this news scroll across the bottom of the screen. Viacom is always in some type of dispute, and trying to wring every penny possible from the consumer.picture-491

LOS ANGELES – Media giant Viacom Inc. is threatening to pull MTV, Comedy Central and Nickelodeon and 16 other channels from Time Warner Cable Inc. if a new carriage fee deal is not agreed upon by midnight Wednesday.

If realized, the move could shut off popular shows like “The Colbert Report” and “SpongeBob SquarePants” to 13 million subscribers, said spokesman Alex Dudley, a vice president at Time Warner Cable, the nation’s second-largest cable operator.

“The issue is that they have asked for an exorbitant increase in their carriage fees and their network ratings are sagging,” he said. “Basically we’re trying to hold the line for our customer.”

Viacom has asked for fee increases of between 22 and 36 percent per channel, adding up to tens of millions of dollars per year, an amount that could increase customers’ cable bills, Dudley said.

Viacom replied in a statement that the increases would cost less than 25 cents a month per subscriber. It said that Americans spend a fifth of their TV time watching Viacom shows but its fees make up less than 2.5 percent of the Time Warner cable bill.

“We make this request because Time Warner Cable has so greatly undervalued our channels for so long,” it said.

“Ultimately, however, if Nickelodeon, Comedy Central, MTV and the rest of our programming is discontinued � over less than a penny per day � we believe viewers will see this behavior by their cable company as outrageous,” it said.

Tense negotiations are continuing at the highest level, Dudley said.

Part of the disagreement is that most of the popular shows are rerun on Web sites where Viacom collects advertising revenue that it does not share with Time Warner, Dudley said.

“We don’t think that’s fair,” he said. “They’re trying to have their cake and eat it too online, where anybody can get it for free.”

Viacom has staked much of its revenue-growth prospects on its ability to squeeze higher carriage rates out of its cable and satellite affiliates despite an ad slowdown and weak ratings.

In the third quarter, media network revenue, which accounts for about two-thirds of the total, grew 6 percent to $2.1 billion, despite global ad revenue falling 2 percent, largely because of double-digit percentage growth in affiliate fees and the success of its “Rock Band” video game.

Viacom shares rose 69 cents, or 3.7 percent, to close at $19.26 on Tuesday, while Time Warner Cable shares added $1.56, or 7.7 percent, to $21.76.

2 thoughts on “Viacom Could Pull MTV Off Time Warner Cable

  1. I wrote this to Viacom suggest you do something similar: You misrepresented yourself. I will now go to any and all blogs I can to tell the true story. I called and wrote Time Warner Cable to demand the return of shows I watch all the time. The truth is you are making great money from the cable companies, while they lose money and your trying to gouge additional money out of them. Well, I guess I can lose my shows at YOUR foolishness. Like my grandmother would have said, “Shame on you!”

  2. I noticed on my cable bill that Time Warner is raising their rates for Classic Cable by almost $4.00 a month as well as DVR service by $1.99 and standard coverters by $1.04. This can be quite an imcrease in their overall bill. Now they are stopping service of these programs over $0.23 a month increase?! Why don’t they stop their own increase of fees and allow us to have our programs? They make it sound as though Viacom are the bad, greedy guys while quietly increasing their own profit margin! I just wish we had a choice of which cable company provider we wanted, but in our town-no way!

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