South Florida DirecTV customers lose MTV, Nickelodeon and more
Jul 12, 2012 (Sun Sentinel - McClatchy-Tribune Information Services via COMTEX) --
DirecTV subscribers in South Florida won't be watching Nickelodeon, MTV, Comedy Central and 14 other channels anymore now that Viacom Inc. has demanded that its networks be dropped from the satellite TV provider's lineup in a dispute over fees.
DirecTV, the largest U.S. satellite TV provider with almost 20 million subscribers, said its executives had approached Viacom with a new proposal and a request to continue broadcasting the channels as talks proceeded, but received no response.
DirecTV's contract with Viacom, which had been in place for the past seven years, expired at midnight Tuesday. That affects more than 270,000 households in Broward and Miami-Dade counties alone.
"My 11-year-old son was so distraught over losing channels like Nickelodeon and MTV, he called DirecTV himself last night," said Kevin Toliver-Lyons from Hallandale Beach. "They told him to call back on Monday to see if anything changes."
Toliver-Lyons said he'll stick with DirecTV for now, because he says he has no better option.
"The only other provider in our area is Comcast, which is worse than DirecTV," he said. "I'd rather have less channels with DirecTV than make that switch."
DirecTV did not offer him a discount for the drop in the channels, although other South Florida residents received discounts for similar interruptions earlier this year.
Speaking to reporters at Allen & Co.'s media and technology conference in Sun Valley, Idaho, on Wednesday morning, Viacom CEO Philippe Dauman said, "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. We are prepared to move forward. It's unfortunate consumers for the first time are not able to enjoy our channels."
Dauman added, "I don't want to negotiate in public."
The standoff is the latest between media companies and cable and satellite TV providers over the cost of content. These providers pay a fee to media companies that allows them to carry channels such as MTV.
In January, many of DirecTV's South Florida viewers couldn't see Fox programming for days, including during two NFL playoff games, because of disputes with retransmission-consent disputes with WSVN-Ch. 7.
In April, the satellite provider filed a complaint with federal broadcast regulators, in part of an ongoing contractual dispute with Tribune Co., which owns WSFL-Ch. 39 and the Sun Sentinel. An agreement was reached after a four-day blackout that cut off programming to millions of subscribers.
Dennis Lai of Tamarac canceled his DirecTV services more than six months ago because he said he was tired of paying for the services and the constant interruptions.
"Any time there was bad weather, the service would go out," Lai said. He originally opted for DirecTV because it was the only provider where he could get access to ethnic shows he and his wife enjoyed watching from China.
Now the couple stream television shows and movies on their TV through online platforms like Netflix and Hulu Plus.
"It's so much cheaper, comes in high definition and we have little to no commercials," Lai said. "Plus there's no more hassle from these companies about bundling packages."
The purchase of television programs is the single biggest cost for distributors, who have fought back in recent years against what they consider unreasonable "carriage fee" increases by content producers like Viacom.
Companies such as Viacom tend to bundle their networks together, forcing distributors to carry lower-rated networks, such as Nick Jr., along with more popular channels such as MTV.
This practice has triggered a debate in the industry about unbundling networks, which would allow customers to choose only the channels that they want to watch.
"We have been very willing to get a deal done, but Viacom is pushing DirecTV customers to pay more than a 30 percent increase, which equates to an extra $1 billion, despite the fact that the ratings for many of their main networks have plummeted," DirecTV Executive Vice President Derek Change said in a statement. "Viacom sent us a letter last night that outlined our obligations to remove the channels by midnight or face legal action just as they were falsely telling viewers DirecTV was responsible. Let's be clear, Viacom took these channels away from DirecTV viewers."
In response to the dropped agreement, Viacom launched a site, "WhenDirecTVDrops.com," which shows a live Twitter feed following what people were saying about the lost channels.
The possibility of DirecTV dropping Viacom's networks was raised in a mid-June note by Bernstein Research analyst Todd Juenger.
Citing falling ratings at Nickelodeon and other Viacom networks, Juenger wrote, "We believe it is no longer inconceivable that a distributor would drop Viacom, or at least engage in a public battle with them over price increases."
In a blog post on Viacom's website, spokesman Mark Jafar wrote that despite Viacom's "best efforts," DirecTV rejected proposals to renew their contract.
In a similar dispute two years ago, Cablevision customers lost Walt Disney Co's ABC channel for several hours, before a deal was reached and transmission restored during a live broadcast of the Academy Awards.
This is not the first time a distributor has blacked out Viacom's channels due to a contract dispute. In 2004, Dish dropped some Viacom networks after the two sides failed to reach agreement on a new distribution deal. That blackout lasted less than 48 hours.
Staff reporter Justine Griffin contributed to this report.
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