Viacom and AT&T stay in carriage negotiations however have failed to succeed in an settlement earlier than the expiration of their present carriage deal at midnight on the East Coast. The indicators of 23 Viacom networks haven’t gone darkish but throughout DirecTV and U-Verse, an outsized chunk of the pay-TV universe at 24.5 million households, however they’ll except a brand new deal might be put in place.
The high-stakes dispute follows the consequential step final week by AT&T to eradicate some Viacom channels in addition to choices from Discovery, A+E Networks and AMC Networks, from its “skinny-bundle” service, DirecTV Now. Cutting these networks from the newly configured fundamental tier of DirecTV Now was extensively interpreted as a judgment of Viacom’s viability within the quickly evolving TV ecosystem. Although the corporate as soon as managed a few of the most respected properties within the media enterprise, the disruption of digital content material and streaming has eroded scores on many networks throughout the dial. Programmers like Viacom, whose lineups lack must-see stay fare like sports activities or information, discover themselves with much less clout in carriage talks.
Battling these headwinds, Viacom CEO Bob Bakish has labored diligently since getting the highest job in December 2016 to restore distribution relationships that had deteriorated underneath his predecessor, Philippe Dauman. He efficiently labored out renewals with Charter, Altice and different main operators, and Viacom has not suffered a blackout since 2014. The worth of AT&T carriage when it comes to charges and promoting has been estimated at $2 billion by Wall Street analysts.
Across the aisle at AT&T, the mission is to chop prices as the corporate seems to be to pay down debt related to its $81 billion acquisition of Time Warner. DirecTV stays the No. 1 satellite tv for pc operator within the U.S., however it’s persevering with to lose subscribers, in line with industrywide cord-cutting tendencies. Its internet-delivered offshoot, DirecTV Now, got here out of the gate robust after launching in 2016, however has additionally not too long ago shed subscribers. Its reset with two streamlined packages, at $50 and $60 a month, places it in a better bracket than some rivals. Management has warned that subscriber losses for DirecTV Now may proceed within the subsequent quarter or two. But many Wall Street analysts see the upside of shaving programming prices.
“We’ve got to get the content cost growth in line with what the customer is willing to pay,” AT&T CEO Randall Stephenson stated throughout AT&T’s fourth-quarter earnings name in January. “And the customer is willing to pay virtually no additional money right now. So the content costs have to reflect that. We will be very assertive as we go through the course of this year to control the spend on content costs.”
Given the urgency of every firm’s agenda, it was hardly shocking that the dueling statements issued by every social gathering had been notably pointed. The AT&T-Time Warner deal gave Viacom one other card to play. As Dish Network not too long ago has in its still-unresolved deadlock with HBO, Bakish’s troops have invoked the merger as an unfair, anti-competitive aspect.
“Unfortunately, AT&T is abusing its new market position by favoring its own content – which significantly underperforms Viacom’s – to stifle competition,” Viacom alleged in an announcement earlier this week. AT&T shot again by calling Viacom a “serial bad actor.” Its assertion bluntly alleged that “several of Viacom’s channels are no longer popular. Viacom’s channels in total have lost about 40% of their audience in the past six years.”
