Time Warner to stop airing Viacom stations at 12:01 January 1st

[DeToxRox]

Time Warner Cable Loses Viacom: MTV, Nickelodeon, Comedy Central To Go Dark

LOS ANGELES — "SpongeBob SquarePants" may be getting squeezed off of Time Warner Cable.

Media giant Viacom Inc. said its Nickelodeon, MTV, Comedy Central and 16 other channels will go dark on Time Warner Cable Inc. at 12:01 a.m. Thursday if a new carriage fee deal is not agreed upon by then.

The impasse over carriage fee hikes would mean "SpongeBob" and other shows like "The Daily Show" will be cut off to 13 million subscribers, said spokesman Alex Dudley, a vice president at Time Warner Cable, the nation's second-largest cable operator.

Viacom has asked for fee increases of between 22 percent and 36 percent per channel, an amount that could increase customers' cable bills, Dudley said. Viacom spokeswoman Kelly McAndrew said the requested increase was in the very low double-digit percentage range.

"The issue is that they have asked for an exorbitant increase in their carriage fees and their network ratings are sagging," he said. "Basically we're trying to hold the line for our customer."

Viacom said the increases would cost an extra 23 cents a month per subscriber _ which works out to $35.9 million more in total. It said that Americans spend a fifth of their TV time watching Viacom shows but its fees make up less than 2.5 percent of the Time Warner cable bill.

"We make this request because Time Warner Cable has so greatly undervalued our channels for so long," it said.

"Ultimately, however, if Nickelodeon, Comedy Central, MTV and the rest of our programming is discontinued _ over less than a penny per day _ we believe viewers will see this behavior by their cable company as outrageous," it said.
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Tense negotiations are continuing at the highest level, Dudley said.

Viacom accused Time Warner Cable of not negotiating.

"It is our sincere hope that they will come to the table and negotiate a deal," said McAndrew. The network operator also intends to tell viewers about the dispute in TV ads in 11 major markets.

Part of the disagreement is that most of the popular shows are rerun on Web sites where Viacom collects advertising revenue that it does not share with Time Warner, Dudley said.

"We don't think that's fair," he said. "They're trying to have their cake and eat it too online, where anybody can get it for free."

Viacom has staked much of its revenue-growth prospects on its ability to extract higher carriage rates out of its cable and satellite affiliates despite an ad slowdown and weak ratings.

In the third quarter, media network revenue, which accounts for about two-thirds of the total, grew 6 percent to $2.1 billion, despite global ad revenue falling 2 percent, largely because of double-digit percentage growth in affiliate fees and the success of its "Rock Band" video game.

Viacom shares rose 69 cents, or 3.7 percent, to close at $19.26 on Tuesday, while Time Warner Cable shares added $1.56, or 7.7 percent, to $21.76.

The channels that would be affected are: Comedy Central, CMT: Pure Country, Logo, Palladia, MTV, MTV 2, MTV Hits, MTV Jams, MTV Tr3s, Nickelodeon, Noggin, Nick 2, Nicktoons, Spike, The N, TV Land, VH1, VH1 Classic, and VH1 Soul.

[Galaxy]

Time Warner certainly seems to fight with every company.

[JonInMiddleGA]

TW could virtually forget about selling local advertising to anyone buying targets 12-34.

Then again, I'm not sure how much adv. any of the operators are expecting to sell in Q1 '09 anyway, so they could roll the dice on it I guess. Doesn't really hurt them from that standpoint except in the younger demos, and for safe A25-54 buys on TVL (one of the best bangs for the buck I've found in local spot cable over the past year or so).

[kcchief19]

I would have thought as the second largest cable company in the U.S. that TWC would have more than 13 million subscribers.

Originally Posted by JonInMiddleGA

Then again, I'm not sure how much adv. any of the operators are expecting to sell in Q1 '09 anyway, so they could roll the dice on it I guess. Doesn't really hurt them from that standpoint except in the younger demos, and for safe A25-54 buys on TVL (one of the best bangs for the buck I've found in local spot cable over the past year or so).

Wouldn't be surprised if that was a consideration -- if you're going to go to war at any point, now would be a good time when it wouldn't cost that much. Of course, on the other side of the coin, revenues will be so piss poor in the first quarter that every dollar may count. But from a revenue standpoint it's going to hurt Viacom a lot more than it hurts TWC.

Nine times out of 10 these are games of chicken that get settled at the last minute. I wouldn't worry until Thursday morning.

[DanGarion]

First I've heard of this, I'll post more when I hear about this internally.

[DanGarion]

Originally Posted by Galaxy

Time Warner certainly seems to fight with every company.

Or maybe they just see that broadcasters shouldn't be bullying the companies that send out their content to viewers...

[Galaxy]

Originally Posted by DanGarion

Or maybe they just see that broadcasters shouldn't be bullying the companies that send out their content to viewers...

No arguments here.

[Alan T]

My 2 year old is getting very annoyed at the scrolling bar across Noggin demanding time warner and BrightHouse customers to call and demand they keep that channel. She keeps saying "daddy broken... broken" and pointing to the screen.

I am neither a Time Warner nor Bright House customer, but I still get the advertisement, so assume everyone is getting it today

[Raiders Army]

Viacom said the increases would cost an extra 23 cents a month per subscriber _ which works out to $35.9 million more in total. It said that Americans spend a fifth of their TV time watching Viacom shows but its fees make up less than 2.5 percent of the Time Warner cable bill.

I think the math works out to be 156,086,956.32 subscribers.

[MizzouRah]

Originally Posted by Alan T

My 2 year old is getting very annoyed at the scrolling bar across Noggin demanding time warner and BrightHouse customers to call and demand they keep that channel. She keeps saying "daddy broken... broken" and pointing to the screen.

I am neither a Time Warner nor Bright House customer, but I still get the advertisement, so assume everyone is getting it today

Yep.. watching Spongebob and seeing that scrolling bar too.

[Draft Dodger]

there are no good guys and bad guys in this - just folks trying to make a buck

[Draft Dodger]

(not that there's anything wrong with that)

[Raiders Army]

Originally Posted by Draft Dodger

there are no good guys and bad guys in this - just folks trying to make a buck

Time Warner will forever be the bad guy in my mind. When they have a monopoly on your cable and give you crap customer service, I will not give them benefit of the doubt. I know they're trying to make a buck, but when they have you over the barrel there's a difference between fairness to your paying customers and trying to maximize your profit.

Our experience with their internet/cable/phone was horrible and we had to get rid of the phone because our infrastructure in our neighborhood was so old. Of course, it's the city's fault not theirs...although they advertise we can receive their services without the *.

I'm glad we have DirecTV and no longer have to deal with Time Warner.

[sterlingice]

Originally Posted by Draft Dodger

there are no good guys and bad guys in this - just folks trying to make a buck

No, but there are more and less defensible positions. Big Ten Network- grossly overplaid their hand. ESPN does that to an extent- they charge way more as a percent than they get viewers but that's because people are rabid about their programming. No one really bitches if a Walker, Texas Ranger rerun is canceled but if we can't see the 2000 Flushes Toilet Bowl in HD, then it's the end of the world.

Usually, I'm with the cable companies on this one but Viacom has a decent case here and if they settle halfways in the middle, it would be fair. CC and Nick pull pretty good ratings, especially for cable. But, as kcchief and JIMGA pointed out earlier, if you want a quarter to go to war and minimize revenue loss- this might be the one because there's going to be little revenue to be had. This is going to make the advertising slowdown from the early 00's look like a boom economy for that industry.

SI

[DanGarion]

Originally Posted by Raiders Army

monopoly...

I'm glad we have DirecTV and no longer have to deal with Time Warner.

Where is the monopoly when you have been able to make a choice of what provider you want?

This is like saying the water company has a monopoly so you've chosen to get water delivered from Sparkletts instead. There are different mediums that you can get the services through, the cable company has theirs, which is the wires that they installed. I'm sure I'm a bit biased, but I don't see a monopoly when there are choices.

[Celeval]

Originally Posted by DanGarion

Where is the monopoly when you have been able to make a choice of what provider you want?

satellite != cable

[DanGarion]

Not sure if an entire list of the channels was posted but here it is.

BET
Logo
MTV Jams
Palledia HD
Comedy Central
MTV2
MTV Hits
KBEH
Nick Toons
VH1 Soul
MTV
Noggin
MTV3
VH1 Classics
Nickelodeon
Spike
TV Land
VH1

Includes On Demand (network related) programming

From the news I'm hearing this morning it's being announced that it's very unlikely that the channels will go off the air, most likely there will be an extension!.

[DanGarion]

Originally Posted by Celeval

satellite != cable

Is that the cable companies fault?

[sterlingice]

Originally Posted by DanGarion

MTV Jams
MTV2
MTV Hits
MTV
MTV3

With that many MTV's, one of them has to play music videos and not stupid ass reality crap, right?

SI

[Mizzou B-ball fan]

Hoo, boy. If Noggin goes off the air, my 2 year old daughter would peddle her tricycle to the Time Warner offices and beat someone to death with a stuffed animal.

[sterlingice]

Originally Posted by Mizzou B-ball fan

Hoo, boy. If Noggin goes off the air, my 2 year old daughter would peddle her tricycle to the Time Warner offices and beat someone to death with a stuffed animal.

Gold

SI

[JonInMiddleGA]

Originally Posted by sterlingice

ESPN does that to an extent- they charge way more as a percent than they get viewers but that's because people are rabid about their programming.

So are the advertisers. ESPN is consistently one of the highest priced networks for local cable advertising. As you pointed out, that isn't all ratings driven because outside of specific live event sports the audience really doesn't come close to justifying the rates charged to run a commercial on ESPN in Charlotte or Topeka or wherever.

Supply & demand drives that on the local level and between affinity buys (biz owner/decisions maker likes PTI and wants to have his spot in it) and vanity buys (biz owner's friends watch PTI & he wants them to see his spot in it), the raw demand is about the strongest of any network on cable at the local level, pushing ad costs to levels that are downright staggering relative to the audience they generate. Easy example would be that I can buy a national :30 on probably half the networks on cable for less than a :30 costs on MNF in most of the top 30 single markets. It's f'n ridiculous.

This is going to make the advertising slowdown from the early 00's look like a boom economy for that industry.

It already has as far as I can see. It's already been worse for us, a lot worse & I'm afraid we're not close to bottom yet.

[JonInMiddleGA]

Originally Posted by sterlingice

Gold

QOTD quality indeed.

[sterlingice]

Originally Posted by JonInMiddleGA

It already has as far as I can see. It's already been worse for us, a lot worse & I'm afraid we're not close to bottom yet.

Advertising: making my wife glad she never went into it, since 2002. She has an advertising degree from the journalism school at Mizzou but graduated during the last big downturn and couldn't find a job. She never ended up in the field and probably never will.

SI

[Mizzou B-ball fan]

Originally Posted by sterlingice

Gold

SI

You have no idea. Commercial-free kids programming is a beautiful thing. If we're watching a show with commercials on another network that's not pre-recorded on the DVR, she starts saying 'fas for' over and over again, wondering why we aren't fast forwarding through the commercials. She's been 'Nogginized'.

[Mizzou B-ball fan]

Originally Posted by sterlingice

Advertising: making my wife glad she never went into it, since 2002. She has an advertising degree from the journalism school at Mizzou but graduated during the last big downturn and couldn't find a job. She never ended up in the field and probably never will.

SI

Wait, you're a split household? Yikes. I'm guessing those marriage vows had a couple of extra lines about not killing your spouse during Border War games.

[sterlingice]

Originally Posted by Mizzou B-ball fan

Wait, you're a split household? Yikes. I'm guessing those marriage vows had a couple of extra lines about not killing your spouse during Border War games.

She doesn't really care that much about sports (except a little baseball). The only way she typically knows that KU and Mizzou are playing is because I've been watching it or I told her about it.

SI

[QuikSand]

Originally Posted by DanGarion

Is that the cable companies fault?

Seriously, do you get paid for this work? Your tireless efforts to defend the cable industry here are obvious and noted... but your vigor for doing so seems to exceed just what one might expect from the "I happen to know something about this subject" variety of same.

Is part of your job to actively shill for cable companies in semi-public settings?

[Mizzou B-ball fan]

Originally Posted by QuikSand

Seriously, do you get paid for this work? Your tireless efforts to defend the cable industry here are obvious and noted... but your vigor for doing so seems to exceed just what one might expect from the "I happen to know something about this subject" variety of same.

Is part of your job to actively shill for cable companies in semi-public settings?

Dan just bought a house. He needs the money. Cut him some slack.

[QuikSand]

Actually, I'd be sort of relieved if it turned out clearing the name of cable companies one net forum at a time was a money-driven endeavor for him, rather than just a consuming passion.

[Kodos]

I'd just like to say that Comcast sucks.

[sterlingice]

Originally Posted by Mizzou B-ball fan

Dan just bought a house. He needs the money. Cut him some slack.

I'm not sure you're the best one to be poking fun at the alleged company shill

SI

[DanGarion]

Originally Posted by QuikSand

Seriously, do you get paid for this work? Your tireless efforts to defend the cable industry here are obvious and noted... but your vigor for doing so seems to exceed just what one might expect from the "I happen to know something about this subject" variety of same.

Is part of your job to actively shill for cable companies in semi-public settings?

Nope. But when when you've worked in an industry and for the same company for 11 years you tend to have a little bit of loyalty.

And I haven't always defended the industry, I point out the flaws that I see. I just think people have strange views when they say something is a monopoly but there are various choices. A monopoly is where there is only one way to get something and it's only through one company. Getting TV, Internet, and Phone service is not a monopoly.

Terrestrial, Cable, Dish, DirectTV, Verizon, ATT, etc. There are options for everything, if a consumer can't see this they aren't looking hard enough.

[DanGarion]

Originally Posted by Mizzou B-ball fan

Dan just bought a house. He needs the money. Cut him some slack.

I wish this made me more money.

[DanGarion]

Originally Posted by QuikSand

Actually, I'd be sort of relieved if it turned out clearing the name of cable companies one net forum at a time was a money-driven endeavor for him, rather than just a consuming passion.

If it makes you happy I'll stay out of the one sided cable company posts and let you guys say whatever you want about the industry I work in.

[DanGarion]

And just for your consideration here is Time Warner Cable's press release.

Statement from Glenn Britt, President & CEO, Time Warner Cable Regarding
Viacom's Threats to Pull MTV Networks from Time Warner Cable Customers
Business Wire News Release
TWC
Time Warner Cable Inc
2008-12-31T12:20:00-05:00
NEW YORK--(BUSINESS WIRE)-- Christmas is over, but Viacom is still playing Scrooge, threatening to
pull its MTV Networks off of Time Warner Cable at midnight tonight unless we ask our customers to pay
exorbitant price increases.
Viacom claims their demands equate to "pennies," but that is misleading and insulting to our customers,
from whom Viacom is trying to extort another $39 million annually - on top of the hundreds of millions of
dollars our customers already pay to Viacom each year. That doesn't sound like pennies to us.
Demanding that our customers pay so much more for these few networks would be unreasonable in any
economy, but it is particularly outrageous given the current economic conditions.
We sympathize with the fact that Viacom's advertising business is suffering and that their networks'
ratings have largely been declining. However, we can't abide their attempt to make up their lost revenue
on the backs of Time Warner Cable customers. We've negotiated in good faith and made several
concessions to help reach a fair and reasonable deal. We've asked for an extension of the current
contract while we continue to negotiate. But Viacom doesn't appear to be interested in what's fair
and reasonable for American consumers - they're only interested in propping up their sagging bottom
line, and they are poised to pull their networks from Time Warner Cable customers tonight.
Huge price increases like what Viacom is demanding threaten the ultimate value of cable TV. Time
Warner Cable is a retail distributor of products we purchase wholesale. Wholesale programming costs
are rising dramatically every year, and, like all multichannel distributors, we have to pass on at least a
portion of the increases to our customers. Viacom's MTV Networks are just a few of the hundreds of
channels we carry. If every channel demanded huge, double-digit increases like what Viacom is trying
to force our customers to pay, it would be impossible to keep the price of cable reasonable for our
customers.
Time Warner Cable has reached hundreds of distribution agreements with other networks. In fact, we
currently have deals with every other cable programmer. The negotiations aren't always easy, but we
work hard to reach agreements that are fair to our customers and to both businesses.
We hope Viacom won't pull the MTV Networks from Time Warner Cable customers, and we'll negotiate
up to the last possible minute and beyond. But ultimately, it is Viacom's decision. We implore them to join
with us to reach a fair resolution or grant an extension, and we hope they won't carry through with their
threat to take their networks away from our customers tonight.
Source: Time Warner Cable

[JonInMiddleGA]

Sorry Dan, but as long as the exclusive franchise agreements exist, it's a monopoly. The greed of local governments isn't necessarily the fault of the cable companies but it exists nonetheless.

[QuikSand]

Originally Posted by DanGarion

If it makes you happy I'll stay out of the one sided cable company posts and let you guys say whatever you want about the industry I work in.

It's not my place to ask you to change your behavior, though I understand that's what it sounds like I'm asking. And I would argue that I am very, very rarely among those doing the talking about the industry.

[DanGarion]

Originally Posted by QuikSand

It's not my place to ask you to change your behavior, though I understand that's what it sounds like I'm asking. And I would argue that I am very, very rarely among those doing the talking about the industry.

I'm just sharing my point of view from the inside. Now could I be slightly biased, yes, but I really do see all sides of things. Just ask my wife, we she has a view on something I'll always take the other side so I can test her on why she is taking the side she's on...

[Raiders Army]

Originally Posted by DanGarion

Nope. But when when you've worked in an industry and for the same company for 11 years you tend to have a little bit of loyalty.

And I haven't always defended the industry, I point out the flaws that I see. I just think people have strange views when they say something is a monopoly but there are various choices. A monopoly is where there is only one way to get something and it's only through one company. Getting TV, Internet, and Phone service is not a monopoly.

Terrestrial, Cable, Dish, DirectTV, Verizon, ATT, etc. There are options for everything, if a consumer can't see this they aren't looking hard enough.

Noted. I understand there are various choices to receive television signals (hell, there are free ways of doing this via an off-air antenna)...however, the comment was directed towards Time-Warner having a monopoly on cable. If we were still in El Paso, we didn't have a choice when it came down to cable. They knew it and played it to the hilt.

The ONLY way to get high speed internet where we lived in El Paso was through Time-Warner. Of course, we could've gotten dial-up, but then my oldest son wouldn't be able to download porn at high rates.

[DanGarion]

Originally Posted by Raiders Army

Noted. I understand there are various choices to receive television signals (hell, there are free ways of doing this via an off-air antenna)...however, the comment was directed towards Time-Warner having a monopoly on cable. If we were still in El Paso, we didn't have a choice when it came down to cable. They knew it and played it to the hilt.

The ONLY way to get high speed internet where we lived in El Paso was through Time-Warner. Of course, we could've gotten dial-up, but then my oldest son wouldn't be able to download porn at high rates.

From a cable companies standpoint they own the cable wires that run through your neighborhood.

From a home ownership standpoint I wouldn't really want to see even more cables ran through my backyard on the poles there (aerial).

From a cities standpoint they think they should be in charge of who has access to easements in their municipality.

Of course lots of it comes down to cities, counties, and states that have signed exclusive franchise agreements with utility companies (water, gas, electricity, cable, phone, etc), and everyone is at fault for that.

[Mizzou B-ball fan]

Dan, if you see a 2 year old girl on a tricycle armed with a stuffed teddy bear approaching your home, it's probably best to lock all the doors and barricade yourself in the basement until she falls asleep or leaves the area. You've been warned.

[DanGarion]

Originally Posted by Mizzou B-ball fan

Dan, if you see a 2 year old girl on a tricycle armed with a stuffed teddy bear approaching your home, it's probably best to lock all the doors and barricade yourself in the basement until she falls asleep or leaves the area. You've been warned.

Hehe. I'm hoping things get solved, but from what I'm hearing Viacom is not going an offer an extension and it's looking like the customers and Time Warner Cable customer service reps are the ones that are going to get caught in the crossfire, since it's not like customers are going to call Viacom.

[Noop]

Originally Posted by QuikSand

Seriously, do you get paid for this work? Your tireless efforts to defend the cable industry here are obvious and noted... but your vigor for doing so seems to exceed just what one might expect from the "I happen to know something about this subject" variety of same.

Is part of your job to actively shill for cable companies in semi-public settings?

[Mizzou B-ball fan]

Originally Posted by DanGarion

Hehe. I'm hoping things get solved, but from what I'm hearing Viacom is not going an offer an extension and it's looking like the customers and Time Warner Cable customer service reps are the ones that are going to get caught in the crossfire, since it's not like customers are going to call Viacom.

I'm not surprised. That press release that was posted didn't exactly sound like a peace offering when they started mentioning declining viewership and revenue in Viacom. Looked more like a jab to the face.

[BrianD]

This is the same type of language that was going around when the local Time Warner lost access to the local Fox affiliate. Either Time Warner is being unreasonable by not giving the stations more money, or the stations are asking for too much. As always, the truth is probably somewhere in the middle. Since Fox had this same disagreement with DirecTV the year before and ABC had a recent issue with Dish, this just seems to be the new standard. Like the music industry, everybody is fighting for pieces of a shrinking pie.

[gstelmack]

Originally Posted by JonInMiddleGA

Sorry Dan, but as long as the exclusive franchise agreements exist, it's a monopoly. The greed of local governments isn't necessarily the fault of the cable companies but it exists nonetheless.

Not here anymore. In North Carolina they negotiate with the state, so we have UVerse starting to take orders for competing service in this area. So, we have TWC now, UVerse starting right now, and DirecTV/Dish for those who can see the satellites. I'm starting to enjoy the competition.

On the one hand, I see TWC's point that all these channels are asking for more money, and I for one am glad they held the line on the NFL Network for example. On the other hand, they charge an exhorbitant fee for my DVRs, which just went up $3/month to $11/month, so I'd like to know what they are spending it on, given how craptaciular Navigator has been (and it's only JUST starting to stabilize).

So I'm angry at both sides for being greedy, and if it weren't for football I'd just cut TV altogether and buy DVDs of all the kids shows and the handful of other things we watch...

[DanGarion]

Just to add to my defense of Time Warner Cable. I really think that as employees we here at TWC in Los Angeles do a lot of things to try and help our customers, as long as the customers requests are reasonable. I've done the customer service thing, I did technical support here for 8 years and went above and beyond for many a customer, especially when I know we were in the fault. There were times when we had free time in my old department and we would cruise message boards and look for people having issues and attempt to help them. Heck I still do this sometimes today. In the past year I have contacted Consumerist to get a hold of a customer in our area that had posted a complaint and I got him in touch with the appropriate department to resolve his issue, I stayed in touch with him through the process to make sure it was fully resolved. On another occasion the guy that writes for 6-4-2 which is a Dodgers/Angels blog was complaining about TWC and I contacted him and work with our Office of the President to answer his questions and try and resolve those problems that we had control over. Even though I'm not in the "customer service" field at my company any more, I do look at helping customers that I see that had a real problem and trying to get it solved. This is because I take pride in my job and I have pride in what my fellow employees do for our customers and for our community (such as offered countless hours of assistance after major emergencies in our communities, as well as volunteering for numerous charity organizations. So if I'm going to come off as some quasi paid ra ra guy for my company so be it. I've seen it from the front lines what we do here.

[Crapshoot]

Originally Posted by Kodos

I'd just like to say that Comcast sucks.

Is there anyone who disagrees with that?

[Crapshoot]

Originally Posted by JonInMiddleGA

Sorry Dan, but as long as the exclusive franchise agreements exist, it's a monopoly. The greed of local governments isn't necessarily the fault of the cable companies but it exists nonetheless.

yup.