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DirecTV/Viacom Dispute?

433K views 3K replies 511 participants last post by  NewForceFiveFan 
#1 ·
So, I was just flipping through channels and when I stopped on Nick, I happened to see a crawl at the bottom of the screen.

It states:

Attention DirecTV Customers - Call 1-800-531-5000 Now!
Tomorrow Night, DirecTV will drop this and 25 other channels.
You will lose Nickelodeon, MTV, Comedy Central, BET, VH1, Spike, TV Land and many more. You can stop them! Call now and demand that DirecTV keep these channels on the air. You must be at least 18 years old to call.

This is the first I've heard about any DirecTV/Viacom dispute and haven't seen the crawl on any other Viacom channels. Also, I would assume that the crawl would have started running prior to the night before.

Any one have any information on this?

Dan
 
#2,203 ·
To anyone saying a la carte would be too complicated for D* to implement, that's ridiculous! C-band had a la carte for years and Canada has had a limited form of a la carte for years where you have a cheap base package and then add themed groups of 5-7 channels for around $6 each after that. I don't even care about any Viacom channels but I'm 100% for a la carte! The first provider with the guts to offer this will do very well, they will at least get my business.
 
#2,204 ·
tulanejosh said:
Everyone assumes that it would be cheaper. I dont believe that'll really significantly be the case. Scale lets bundle of viacom channels cost $3.00. But if you reduce scale, cost goes up.

I know other people have different perspectives on the long term economics of a la carte. Personally - i just dont think the value is there. Look at what apple and amazon charge for an episdoe - $1.99. A entire channel isn't going to cost you less than a single episode.

And you are left with 15 channels that are $5 - $10 a piece, that's about what i pay now only now i get a lot more content. Personally - if I'm going to play close to the same amount, i'd rather get access to the most channels i possible can - even if i don't watch them - because its a better deal that paying $10 less for 90% less channels.

I just don't think there's any reality in which you get to pay significantly less and consume the same amount. It didn't happen in newspaper or print, it didn't happen with music. I dont think video will be any different.
I think you are correct. If we take the current dispute at face value, Viacom wants $0.03 more per day ($10.96 per year) per customer x 20,000,000 customers. DirecTV claims that only 20% of their cutomers even watch Viacom. To get the same revenu from DirecTV in an a la carte package, the increase would be $54.79 per year - and this is just the increase.

If the increase is, as DirecTV claims, 30% over the old rate, then the current rate per customer is on the order of $36.53 per year, and the new price Viacom wants is on the order of $47.49 per customer per year. If only 20% of the DirecTV customers actually want Viacom, then to get the same revenue from DirecTV, Viacom would have to charge $237.41 per customer per year or $19.78 per month.

$19.78 per month is just the portion that goes directly to Viacom for their 17 channels. I have no idea of what the overhead at DirecTV will add to the fee to get the programing to you, but it is not insignificant. When you take into consideration what all of the other providers will expect for their programing, then the total is not going to be any cheaper than it is now.
 
#2,205 ·
"Alan Gordon" said:
I find that most people I know would be concerned by the lack of TV Land and the Nick channels. A couple of folks would be disappointed by CC, but the rest of the channels probably would go mostly unnoticed.

As I stated, I only have interest in TV Land, MTV, Comedy Central, and Palladia.

I HATE the fact that I actually like two programs on MTV... I was able to go YEARS without watching a single thing on that channel. :(

~Alan
I've really been thinking about something. I have no data to back this up but I believe if MTV/VH-1 did what they used to do and show music videos most of the time, they might have more of a shot of getting back on and having not gone dark in the first place. People like music. May not like current pop stuff but they like music. Most young adults that are the crux of those spending $$$ advertisers love grew up with MTV showing videos of the stuff they heard on the radio. We did not grow up with trailer park trash reality tv. Those shows have a stigma attached to them of playing to the lowest common denominator of our society. I don't know what kind of advertisers and ad rates they get, but one would have to imagine it isn't the same level as The Mentalist reruns on TNT. You cannot expect a large chunk of the paying customer base to feel sympathy for them being gone when this is the type of thing these channels (by and large the face of the group along with Nickelodeon) air.
 
#2,206 ·
Yeah, al a carte would be more on a per channel basis, that's pretty much a given.

Viacom doesn't want it that way and the numbers bandied about give you the reason.

While they might 'need' or 'want' $19.78/month, I think no one believes that anyone would actually be willing to pay that or anything even close.

Come on! Viacom has children's shows and trash TV for the adults. Yeah, some enjoy trash TV and I have no problem with that, but it certainly isn't worth much in the way of money out of my pocket.
 
#2,207 ·
Solving this problem of packaging or not packaging channels boils down to the fact that there are too many channels providing much of the same poor or low quality programming. Why is it that the marketplace cannot determine the success or failure of a channel? Because there is too much money to be made using the monopolistic system in place today. For solving the problem has nothing to do with technology. There would be half as many channels in existence today if it were not for the way we are forced to purchase programming.

Many argue that they do not want ESPN or other sports channels because of cost. If the cost of delivering sporting events is high then those willing to pay the price will either step and pay or the channel will go dark. Here is an example of why I would be willing to pay if given the chance. My son and I do not have season tickets to our local NFL team because they are not available for purchase. I am on the waiting list and hopefully one of my children or grandchildren will have the option some day. Getting even two decent tickets to a home game runs anywhere from $300 - $600 and that does not include any other costs involved with seeing the game live. The total cost for us to go to just a couple of home games each year is between $1200 and $1500 all in. So for me personally it is no problem to pay $100 per month just to get all of my teams games along with other sporting events. I do think others would step up and pay as well keeping broadcast sporting events available to anyone that wants the programming enough to write the check.

On the flip side I do not care for 90% of the other channels on my dial. I do not have any interest in watching pregnant teens coping with their bad decisions. I do not care to watch old reruns of My Three Sons, The Brady Bunch or the Love Boat. I also do not need to watch endless reruns of Shwartzenegger and Stalone movies extended to 1.5 hours beyond their normal run times due to the barrage of advertising. Even recording these and fast forwarding constantly gets old.

My guess is if the cost to subscribe to this endless list of channels that offer old, stale, stagnant or programming that caters to a specific demographic of society cost $30, $40 or $50 per month then we just might see some quick thinning of the herd. This would free up bandwidth for programming that the consumers want and will vote with their wallets to obtain.
 
#2,210 ·
zimm7778 said:
I've really been thinking about something. I have no data to back this up but I believe if MTV/VH-1 did what they used to do and show music videos most of the time, they might have more of a shot of getting back on and having not gone dark in the first place. People like music. May not like current pop stuff but they like music. Most young adults that are the crux of those spending $$$ advertisers love grew up with MTV showing videos of the stuff they heard on the radio. We did not grow up with trailer park trash reality tv. Those shows have a stigma attached to them of playing to the lowest common denominator of our society. I don't know what kind of advertisers and ad rates they get, but one would have to imagine it isn't the same level as The Mentalist reruns on TNT. You cannot expect a large chunk of the paying customer base to feel sympathy for them being gone when this is the type of thing these channels (by and large the face of the group along with Nickelodeon) air.
I actually tuned to VH-1 yesterday. Yikes! Who is this Big Jan person? It was a horror film! And not a bit of music at all!
 
#2,212 ·
lokar said:
To anyone saying a la carte would be too complicated for D* to implement, that's ridiculous! C-band had a la carte for years and Canada has had a limited form of a la carte for years where you have a cheap base package and then add themed groups of 5-7 channels for around $6 each after that. I don't even care about any Viacom channels but I'm 100% for a la carte! The first provider with the guts to offer this will do very well, they will at least get my business.
C-band moved toward bundling (smaller bundles but still bundling) away from a la carte because a la carte was NOT working.

And C-band never had anywhere near 20 million turnkey users. Completely different market. C-band always was and always will be more of a hobbyist platform. And the investment that DirecTV and Dish (and even the cable systems) have is not there.
 
#2,214 ·
mitchflorida said:
DTV should stick it to Viacom by replacing TVLand with metv or antennatv or something similar. Who would notice? They are the same shows.
I agree... Me TV would be a great alternative to TVLand... would I miss Hot in Cleveland, yeah, but not too much.
 
#2,215 ·
fleckrj said:
I think you are correct. If we take the current dispute at face value, Viacom wants $0.03 more per day ($10.96 per year) per customer x 20,000,000 customers. DirecTV claims that only 20% of their cutomers even watch Viacom. To get the same revenu from DirecTV in an a la carte package, the increase would be $54.79 per year - and this is just the increase.

If the increase is, as DirecTV claims, 30% over the old rate, then the current rate per customer is on the order of $36.53 per year, and the new price Viacom wants is on the order of $47.49 per customer per year. If only 20% of the DirecTV customers actually want Viacom, then to get the same revenue from DirecTV, Viacom would have to charge $237.41 per customer per year or $19.78 per month.

$19.78 per month is just the portion that goes directly to Viacom for their 17 channels. I have no idea of what the overhead at DirecTV will add to the fee to get the programing to you, but it is not insignificant. When you take into consideration what all of the other providers will expect for their programing, then the total is not going to be any cheaper than it is now.
well 30% more likely is the price of epix
 
#2,216 ·
zimm7778 said:
I've really been thinking about something. I have no data to back this up but I believe if MTV/VH-1 did what they used to do and show music videos most of the time, they might have more of a shot of getting back on and having not gone dark in the first place. People like music. May not like current pop stuff but they like music. Most young adults that are the crux of those spending $$$ advertisers love grew up with MTV showing videos of the stuff they heard on the radio. We did not grow up with trailer park trash reality tv. Those shows have a stigma attached to them of playing to the lowest common denominator of our society. I don't know what kind of advertisers and ad rates they get, but one would have to imagine it isn't the same level as The Mentalist reruns on TNT. You cannot expect a large chunk of the paying customer base to feel sympathy for them being gone when this is the type of thing these channels (by and large the face of the group along with Nickelodeon) air.
If people want just music then that is what Palladia, CMT Pure Country, VH1 Soul, VH1 Classic, MTV Jams, and MTV Hits are for. Those channels play music videos/concert photage nearly 24/7. Contrary to what people say MTV has not given up totally on music, they have just spun it off onto different channels based on genre. It's too bad those channels don't get upgraded to HD and have wider distribution, I think it might help MTV beat the stigma that they don't care about music.

As far as ratings go look at the ratings for them compared to MTV and VH1 and then tell me if you still think that what the people really want is music.
 
#2,217 ·
MartyS said:
I agree... Me TV would be a great alternative to TVLand... would I miss Hot in Cleveland, yeah, but not too much.
Given that Me TV and the others like it are built to sell programming to local stations, you would probably have an issue with existing contracts. I don't think any of that genre of channel have cable or satellite distribution beyond local channels.

Maybe DirecTV can make their own. :)
 
#2,218 ·
tonyd79 said:
C-band moved toward bundling (smaller bundles but still bundling) away from a la carte because a la carte was NOT working.

And C-band never had anywhere near 20 million turnkey users. Completely different market. C-band always was and always will be more of a hobbyist platform. And the investment that DirecTV and Dish (and even the cable systems) have is not there.
well why can't we have small bundles / theme packs??

sports can be on it own and let's say you offer that and then you may even get people who take sports only who don't have any TV pack right now.
 
#2,219 ·
JoeTheDragon said:
well why can't we have small bundles / theme packs??

sports can be on it own and let's say you offer that and then you may even get people who take sports only who don't have any TV pack right now.
Not saying you can't have smaller bundles. I was pointing out that a la carte (which means individual channels) has failed in the only venue that gave it full use. And that the problems of scale and expectations by the customer make it less likely in the realm we are talking about today.

In C-Band land, the middle men have little skin the game. They are purely license managers. They do not have large costs like launching a satellite to recoup.

And there will still be basics that everyone will get. I am betting dollars to donuts that that will include ESPN.

Finally, the C-Band market is so small, that is is seen as gravy, not as the meat.
 
#2,220 ·
lokar said:
Canada has had a limited form of a la carte for years where you have a cheap base package and then add themed groups of 5-7 channels for around $6 each after that.
That is a great idea. I have always liked the Canadian model, and have never understood why the American DBS providers do not offer what Bell ExpressVu and Shaw Direct do. Have the core channels, then everything else is in "theme packages" for instance, I care nothing at all about Disney, ABC Family, TeenNick, Nicktoons, Disney Juniour or Sprout and even Nickelodeon now for that matte, because I don't have any small children. Why cant they be in a "Preschool Theme package" for those who do not need them nor want to watch them. Of course, I know the answer, it is the greedy programmers. For instance, take Disney. In order to get Disney and ABC Family, and the other Disney controlled networks, Disney all but forces DirecTV and Dish, Comcast and Charter, and all the others put all or most of the networks that they control in the majority of the packages that they offer. I am not usually an advocate of more government intervention in free market matters, but at the pace that cable/DBS rates are increasing and the greed of the programmers, I think it is time that the FCC became involved and forced more regulation, kind of like the CRTC does in Canada.
 
#2,221 ·
Here's a funny note. Viacom wants more money right? But back in the summer of 2010 refused to sell Showtime to C banders anymore. Many people wanted it still but they refused There was a good chunk of change they lost because they made that stupid move. Now it's coming back to bite them since they are looking for money elsewhere. How stupid are these big companies. Hey Viacom if your listening allow us C banders your Showtime channels again, that way you won't have to resort to what your doing here with Direct.

In the beginning of 2011 HBO pulled the same crap. Watch the next big blowout dispute be with HBO.
 
#2,222 ·
tvropro said:
Here's a funny note. Viacom wants more money right? But back in the summer of 2010 refused to sell Showtime to C banders anymore. Many people wanted it still but they refused There was a good chunk of change they lost because they made that stupid move. Now it's coming back to bite them since they are looking for money elsewhere. How stupid are these big companies. Hey Viacom if your listening allow us C banders your Showtime channels again, that way you won't have to resort to what your doing here with Direct.
Viacom has nothing to do with Showtime anymore. They are owned by CBS Corporation, which is the "old" Viacom. Of course controlling interests of both corporations are owned by National Amusements, which is controlled by Sumner Redstone. However, Viacom has not received any revenue from Showtime since it was split from the "old Viacom" now CBS Corporation in 2006.
 
#2,223 ·
"Beerstalker" said:
If people want just music then that is what Palladia, CMT Pure Country, VH1 Soul, VH1 Classic, MTV Jams, and MTV Hits are for. Those channels play music videos/concert photage nearly 24/7. Contrary to what people say MTV has not given up totally on music, they have just spun it off onto different channels based on genre. It's too bad those channels don't get upgraded to HD and have wider distribution, I think it might help MTV beat the stigma that they don't care about music.

As far as ratings go look at the ratings for them compared to MTV and VH1 and then tell me if you still think that what the people really want is music.
Actually, they're doing a lot more "reality" tv than they ever did before, especially MTV and VH1
 
#2,224 ·
lokar said:
To anyone saying a la carte would be too complicated for D* to implement, that's ridiculous! C-band had a la carte for years and Canada has had a limited form of a la carte for years where you have a cheap base package and then add themed groups of 5-7 channels for around $6 each after that. I don't even care about any Viacom channels but I'm 100% for a la carte! The first provider with the guts to offer this will do very well, they will at least get my business.
It's not ridiculous. You are talking about 20 million subscribers with 20 million different wishes, where C-Band never had anywhere NEAR that much, almost no-one had (or has) a 5-foot dish in their back yard. The only places they were somewhat popular was in rural areas where there was no cable. In cities, an occasional bar had a big dish on the roof, but that was about it. On top of that, there were more than just one provider. Now there is only Skyvision, but there used to be more (NPS comes to mind, ProgrammingCenter I think still does sell programming), each dealing with several tens-of-thousands of customers at most, perhaps a 100k if they were big. The last number I could find anywhere on Google, is that in 2005 there were about 100k C-Band users TOTAL, among whomever sold programming.

The more subscribers you have, the more complicated it becomes. And DirecTV has 20 MILLION subscribers. It really becomes a different ballgame with that kind of amount. A good analogy: It is a lot easier to manage traffic in a town with 10.000 people, then it is in a town like New York with 8 million.

There is so much to consider. Besides the user complication, there are contracts to be upheld, and there will be NO a-la-carte without 100% agreement with the television/media companies that provide the stations. And they must sell advertising..... with a contract in place, their stations in a certain package, they can go back to potential advertisers and say: We have a potential of 20 million DirecTV customers (or: xx million that have Choice Extra, xx million that have Choice ultimate), and those numbers are perhaps updated once a quarter, but they go down and up with the number of subscribers. It becomes a lot harder to sell to advertisers if you have to tell them: "Well... between September and March we get about so many viewers, because we have this award winning series, but between April and August we only get so many, because award winning series season is over, and half the people dropped the channel for the summer".

If it was AMC for instance, I would have dropped it. I only watch Mad Men, and since season 5 is over.... I could save some money by dropping the channel till the new season starts. That is something neither DirecTV or AMC would want.

a-la-carte as you envision it, will remain a dream.
 
#2,225 ·
tvropro said:
Here's a funny note. Viacom wants more money right? But back in the summer of 2010 refused to sell Showtime to C banders anymore. Many people wanted it still but they refused There was a good chunk of change they lost because they made that stupid move. Now it's coming back to bite them since they are looking for money elsewhere. How stupid are these big companies. Hey Viacom if your listening allow us C banders your Showtime channels again, that way you won't have to resort to what your doing here with Direct.

In the beginning of 2011 HBO pulled the same crap. Watch the next big blowout dispute be with HBO.
really?? HBO is not forced and is all a cart
 
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