Satellite TV operator DirecTV today dropped 26 Viacom channels from its service following negotiation impasse over the network's carriage fees. Those include music channels MTV, BET, VH1, CMT as well as Nickelodeon and Comedy Central.
DirecTV offers cable TV service to nearly 20 million subscribers.
In recent days reports of Viacom's flagging ratings have compelled some analysts to cut the company's stock rating. The ratings issue came up in the current hard-nosed negotiations between the two companies.
In a statement on DirecTV's website Derek Chang, DirecTV's executive vice president of Content, Strategy and Development said, "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 and much of Viacom's programming can be seen for free online."
Meanwhile in an official statement on Viacom's blog, the company "proposed a fair deal that amounted to an increase of only a couple pennies per day, per subscriber, and we remained willing to negotiate that deal right up to this evening's deadline. However, DirecTV refused to engage in meaningful conversation. We are hopeful that DirecTV will work with us toward a resolution, and stop denying its subscribers access to the networks they watch most."
Viacom also said their "agreement with DirecTV is seven years old -- ancient by the standards of the ever-evolving media industry -- which means that DirecTV has enjoyed way-below-market rates for Viacom's networks for a very long time." The network claims it is the most-watched network operator on DirecTV, attracting about 20 percent of all its viewing, while claiming it only receives 5 percent of DirecTV's programming spend.
DirecTV says it will begin substitute programming including airing content from the Disney Channel, ABC Family, Cartoon Network, PBS Sprout, The Hub and Boomerang.