Update #3 – AT&T and Viacom announce they have signed a new deal. See here for details.
Q. I am a DIRECTV subscriber and I am worried about all these warnings that I will lose a bunch of channels tonight like MTV and Comedy Central. Do you think we will lose them tonight? — Melanie, Chincoteague, Virginia.
Update: As of 5:50 am ET on Saturday, the companies have not made an announcement regarding the talks. However, the channels are still on DIRECTV.
Update #2: Still nothing new at 7:15 pm ET on Saturday. Parties presumably still talking; channels still on.
Update #3 – As of Sunday at 10:15 am ET, still nothing new. But the channels are still on DIRECTV, albeit with warnings they could be removed at some point.
Melanie, DIRECTV, which is owned by AT&T, stands to lose 23 Viacom-owned channels tonight at midnight unless AT&T signs a new carriage agreement with the aforementioned Viacom. The list of channels that could be blacked out on both DIRECTV and AT&T’s U-verse include MTV, Comedy Central, Nickelodeon, VH1, BET and TV Land, among many others.
As these disputes normally go, Viacom is fighting over how much DIRECTV and U-verse should pay to carry the channels. But this particular carriage argument perhaps is more complicated and intense because all parties involved are battling for their very survival.
Viacom, which has seen its stock fall in recent days due to the dispute, is concerned the value of its channels is shrinking because pay TV providers are increasingly less likely to pay what they demand in carriage fees. And DIRECTV and U-verse are in the anxiety zone because both are rapidly losing subscribers to cord-cutting and less-expensive live streaming services. The providers want to cut their program acquisition fees to offset the subscriber defections, but at the same time, they are worried that the loss of the Viacom channels could lead to even more sub losses.
Consequently, how this plays out could become a blueprint for how DIRECTV, U-verse and Viacom operate in the coming months, and perhaps years.
Because the dispute has so much at stake, I suspect AT&T, which negotiates carriage deals for DIRECTV and U-verse, and Viacom will agree late tonight to a temporary extension in their existing pact. Never underestimate corporate America’s inclination to kick problems down the road rather than face them head-on.
Of course, this wouldn’t solve the problem permanently. So in the coming weeks, I think you’ll eventually see a blackout of the Viacom channels when the companies realize they simply can’t reach a deal. How long will it last? I can’t say, but AT&T appears ready to play hard ball so it could be awhile, if not forever.
Yes, forever. It would not surprise me if AT&T decided that both TV services can survive without Viacom. I’m not saying that’s a wise decision, but it could happen.
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— Phillip Swann